Frauenfelder v Reid

Sub-paragraph (c) of sub-s. (3) of s. 6 provides that nothing in the sub-section should prevent a worker recovering compensation under the Act from the person in the position of Baldwin instead of the person in the position of A. C. and D. C. Reid. It was no doubt in view of the words "instead of" that joint liability was not imposed on the respondent Baldwin with the respondents A. C. and D. C. Reid.

The respondents A. C. and D. C. Reid are the owners of a station called Morocco East Station on which they graze sheep and cattle. They do not, however, cultivate the land. Owing to a bush fire it became necessary for them to replace a great deal of subdivisional fencing. In fact about fifty miles of fencing was burnt. Among other things they let a contract to the respondent Baldwin for the erection of about eight miles of fencing at thirty-two shillings and sixpence a chain. He provided a posthole digger and tools, that is, shovels and wire cutters. The Reids supplied the timber and the wire and cut the posts, placing the material along the line of the fence. The applicant, that is to say, Frauenfelder the appellant, was employed by Baldwin as a worker constructing the fence. On the day the applicant Frauenfelder was injured, or on the following day, Baldwin came to see Mr. A. C. Reid and told him that one of his men had been injured and he did not think he had him covered by compensation and could he do anything for him. Mr. Reid said he would write to the insurance company and see what he could do and this he did.

Section 6 (3) of the Workers' Compensation Act, 1926 N.S.W. as amended, is of long standing. But difficulties of construction not altogether settled by judicial decision apparently remain. It relates to the liability of a person employing a contractor to pay workers' compensation to the contractor's employees if they are injured in the course of the work. The liability depends upon certain conditions which are not well defined. In the first place, the contract must be made by the principal in the course of or for the purpose of his trade or business. In the present case it may be taken for granted that the Reids did contract with Baldwin for the purpose of their trade or business of graziers. The words "trade or business" are wide and I see no reason why the operations of a grazier should not fall within them. It is obvious that subdivisional fencing is essential for carrying on the operations of a grazier. The contract was therefore made for the purpose of the trade or business. In the next place, the provision requires that he must contract with another person, the contractor, "for the execution by or under the contractor of the whole or any part of any work undertaken by the principal". Great difficulty has always been felt about the words "work undertaken by the principal". The phrase seems to suggest or imply that the principal must undertake with someone or other to do the work, yet that obviously is not the meaning. The question has been dealt with in England, where the provision originated, and in Australia. This Court had occasion to discuss it in Moir v. Schrader [1] , where some of the English authorities are collected. There is obviously a question in this case whether A. C. and D. C. Reid can be considered as having "undertaken" the work of subdivisionally fencing their property after the devastation of the bush fire. It is of course work undertaken not for the benefit of strangers but for the benefit of their own business. In Skates v. Jones & Co. [2] , Farwell L.J. says: "The man of business or tradesman is not made a principal because he is in business or in trade, but because the particular work in question is his own trade or business [3] ." This means that he is regarded as having undertaken to execute or have executed the particular class of work because it is essential to the trade or business he has assumed to conduct. The form of the section suggests that something went wrong in the drafting in the manner in which it is expressed, but the courts have adopted an interpretation which appears to cover cases where the necessary conduct of the business involves the performance of particular work. If that be so the owner of the business is regarded as having "undertaken" it for the purposes of the section. At all events, in the present case the view seems open that A. C. and D. C. Reid should be treated as having "undertaken" the subdivisional fencing of their property. From this view in the Supreme Court Hardie J. dissented on the ground that the work of fencing could not be considered a component part of the operations involved in conducting the grazing property as a business or trade; it had no direct connexion with the relations of the proprietors to outsiders. Having regard to the construction which has been given to the provision judicially, I think the view should be adopted that it is capable of embracing work done on a station which forms a recognized or necessary incident of conducting a station, although it is not work which does directly relate to or affect outsiders or the relations of the station owners with outsiders.

1. (1936) 56 C.L.R. 310. 2. [1910] 2 K.B. 903. 3. [1910] 2 K.B., at p. 910.

The provision of sub-s. (3) goes on to provide that in such a case the principal shall be liable to pay any worker employed in the execution of the work any compensation under the Act which he would have been liable to pay if that worker had been immediately employed by him. If the provision stood at this point it is clear enough that, on the view I have expressed, Messrs. A. C. and D. C. Reid would have been liable to the applicant Frauenfelder. There is, however, a proviso to the particular paragraph of the sub-section. It was added in 1927 by s. 2 (b) of Act No. 32. The proviso says that where the contract relates to threshing, chaff-cutting, ploughing, or other agricultural work, and the contractor provides and uses machinery driven by mechanical power for the purposes of such work, he and he alone shall be liable under the Act to pay compensation to any worker employed by him on such work. Now it is clear that Baldwin did provide machinery, viz. a posthole digger, for the purpose of the work and that it was driven by mechanical power. Of course the fencing did not relate to threshing, chaff-cutting or ploughing. Can it be said to relate to other agricultural work? I answer the question that it cannot. I do not think in Australia that grazing or depasturing sheep or cattle can be described as agricultural work. No doubt a great deal of mixed farming is done in Australia which combines a use of sheep, cattle, agriculture and perhaps includes almost any pursuit which can be described as rural. But the distinction between the pastoral industry and agricultural work is clear and traditional. If the legislature had meant to include pastoral pursuits or work the expression "agricultural work" would not have been used, so it appears to me. Threshing and chaff-cutting no doubt in 1927 were very much associated with agricultural work, although perhaps at an earlier date chaff-cutting might have been considered more associated with the mere keeping of horses for any purpose. All rural pursuits are not agricultural and I do not think that the respondents, Messrs. A. C. and D. C. Reid, were involved in agricultural operations or pursuits. The question is one involving only the use of terms and it is the use of terms in this country. One can do nothing but rely upon his familiarity with the terms and the use habitually made of them. No context or supposed policy requires that they should be given any secondary or expanded meaning.

The rule or order of the Full Court of the Supreme Court of New South Wales should be set aside and in lieu thereof the appeal to that Court from the Workers' Compensation Commission should be dismissed.

The respondents A. C. Reid and D. C. Reid are station owners, carrying on a grazing business on their property, Morocco East, near Tocumwal. In 1958 they entered into a contract with the respondent, A. R. Baldwin, for the erection by him of about ten miles of fencing upon the property, to replace a fence that had been burnt in a fire. The Reids provided the material, posts and wire, for the new fence and delivered it to the line where needed. Baldwin's task was to erect the fence. He was an independent contractor, not a servant of the Reids. He was paid by the chain as the work progressed. He employed the appellant, W. S. Frauenfelder, as a labourer in the execution of the work. While using a mechanical, power-driven post-hole digger provided by Baldwin for the purposes of the work Frauenfelder was injured. He made an application under the Workers' Compensation Act, 1926-1957 N.S.W., claiming that the Reids and Baldwin were both liable, the Reids by reason of s. 6 (3) of the Act. The matter came on for determination before the Workers' Compensation Commission and an award was made in favour of the applicant. The Reids disputed the correctness of this decision, and the matter was carried to the Supreme Court on a case stated.

In the Supreme Court two questions were argued: first, whether the facts brought, or could bring, the matter within s. 6 (3), so as to make the Reids liable: secondly, if so, whether they were relieved of liability on the ground that the contract which they made with Baldwin related to agricultural work within the meaning of the proviso to s. 6 (3) (a). The Supreme Court found in favour of the Reids, the appellants there. Two of their Honours (Herron J., as he then was, and Maguire J.) thought that, although the transaction fell otherwise within s. 6 (3) (a), the Reids were relieved from liability by the proviso. Hardie J. considered that the case was altogether outside s. 6 (3) (a), so that he did not find it necessary to decide the second question.

The case coming on appeal to this Court, the same questions were argued as in the Supreme Court. It is perhaps as well to observe, because of the time that has elapsed, that, although if the matter had arisen after 11th September 1959 (the date of the proclamation enlarging the operation of s. 6 (5)) the effect of that sub-section might have had to be considered, it is irrelevant to this case, which depends entirely on the application to the simple facts that I have set out of the far from simple provisions of s. 6 (3) (a).

Anyone reading s. 6 (3) (a) for the first time, in ignorance of the decisions of Courts and misled by the side note, might think that it was concerned only with cases in which a person (called the principal), whose business it was to do work for others, let a contract for the performance by a person (called the contractor) of the whole or part of some work that he, the principal had undertaken to do. But a further reading would quickly show that this construction is too simple. Sidenotes, as Lord Reid has quite recently said in Chandler v. Director of Public Prosecutions [1] , ought not to be used as an aid to construction; and the cases that have arisen under the sub-section and under the English provision from which it is derived reveal the uncertainties that lie in it, and illustrate how debatable is its scope and application. Without attempting an exhaustive definition it must, I think, be accepted that the expression "work undertaken by the principal" is not limited to work that the principal has contracted to do for someone else, but covers also any work the doing of which is part and parcel of the business undertaking of the principal. Whether or not some particular work falls within the enactment then becomes ultimately a question of fact.

It goes without saying that fencing the run into paddocks is part of the ordinary development and management of an Australian grazing property. It is to-day essential for the efficient conduct of any pastoral undertaking. And the maintenance of the fences in good repair is an ordinary part of station management. Repairs may be done by boundary riders or station hands employed by the pastoralist. The construction of fences of any length is often done by independent contractors. However it be accomplished, fencing work of all kinds on a station can be regarded, I think, as part and parcel of the station owner's undertaking. It was open to the Commission to find that it was so in this case. Therefore the Reids are, by reason of s. 6 (3) (a), liable to pay the appellant the compensation to which he is entitled recouping themselves, if they can, from Baldwin pursuant to s. 6 (3) (b) - unless they be relieved of liability, and Baldwin alone made liable, by the proviso to s. 6 (3) (a).

I turn therefore to the operation of the proviso, which is as follows: "Provided that, where the contract relates to threshing, chaff-cutting, ploughing or other agricultural work, and the contractor provides and uses machinery driven by mechanical power for the purposes of such work, he and he alone shall be liable under this Act to pay compensation to any worker employed by him on such work".

The policy and purpose of this proviso, derived originally from the English Workmen's Compensation Act, 1900, appear to be that, because a worker employed by a contractor who uses power-driven agricultural machinery, is thereby perhaps subjected to risks beyond those incidental to the use for the same purpose of manual or horse-drawn implements, he shall, if injured, look for compensation only to the contractor who employed him and who provided the machinery. To bring the proviso into operation it is not necessary, it seems, that the worker be injured by the machinery or while actually using machinery. It is apparently enough that it was provided and used by the contractor for the purpose of a contract relating to agricultural work, and that the worker was employed in the execution of such work. However that may be, the appellant here was in fact injured while using the post-hole digger. The question is, therefore, whether it can be said that the contract that the Reids made with Baldwin for the erection by him of the fence was a contract that "relates to threshing, chaff-cutting, ploughing, or other agricultural work" within the meaning of that phrase in the proviso. Unless that contract falls within that description the worker is not to be deprived of the alternative right that the Act gives him; for the proviso, it is to be noted, creates a special exception, disadvantageous to the worker, to the general provisions of s. 6 (3) of the Act.

The Workers' Compensation Commission decided in an earlier case that fencing on a grazing property was "other agricultural work" within the meaning of the proviso: Holland v. Boland [1] . And, as I have said, the two learned judges who dealt with this aspect in the Supreme Court were also of that opinion. Before us, counsel for the appellant attacked this on two main grounds. He said first that, having regard to the common usage of words in Australia, there is a distinction between agricultural work and pastoral work, and between farmers and graziers, and that erecting a fence on a pastoral property is not agricultural work or related to agricultural work. Secondly he said that, even if erecting a fence on a sheep or cattle station can properly be called agricultural work, the denotation of the words "other agricultural work" in the proviso is limited by their context, and that the erection of fences is not included.

The first of these propositions has an etymological attractiveness. In the eighteenth century Doctor Johnson would have lent his support to the argument, for his definition of agriculture was: "The art of cultivating the ground; tillage; husbandry, as distinct from pasturage". But it is not insignificant that, having thus equated agriculture and husbandry to the exclusion of pasturage, and having defined husbandry as "tillage; manner of cultivating land", he yet quoted in illustration a sentence of Sir William Temple which included the words "the several trades of husbandry, tillage and pasturage". And long before the eighteenth century writers on husbandry had not overlooked the sheep in the sheep folds or the horses and cattle in farmyard and field. They were important in agriculture if only for the purpose of manuring the ground. This may be seen in Fitzherbert's Boke of Husbandrye published in 1523, a book that has some claim on the attention of lawyers, for it was written either by the author of the Abridgment and the New Natura Brevium or by his brother. Whoever wrote it said: "An husbande cannot well thrive by his corne without he have cattel, or by his cattel without corne".

The word agriculture is to-day admittedly sometimes used in its primary, specific and restricted meaning of cultivation of the soil, tillage. But it commonly has now an ampler meaning. The Oxford Dictionary says that it means "the science and art of cultivating the soil; including the gathering of the crops and the rearing of livestock; farming (in the widest sense)". When the word is used undefined, and unrestricted by its context, courts have often rejected arguments that its denotation does not extend to the keeping of livestock. To take some examples: Branson J. once spoke of the feeding and tending of pigs and cattle as something "which would obviously be regarded by everybody, so long as it is done in the ordinary way upon a farm, as an agricultural pursuit": In Re The Unemployment Insurance Act and Stephens [1] . And recently Lord Denning M.R. referred to what he called "the ordinary operation of ploughing, sowing, grazing of animals and the like" as "agricultural operations": Gilmore v. Baker-Carr [2] . Other assertions that grazing animals is a form of agriculture may be found in Assessor for Lanarkshire v. Smith [3] and Walters v. Wright [4] . Hides and wool are "agricultural products" just as wheat is: Scarr v. Wurzal [5] . And land used for grazing sheep is, it may be noted, used for a "purpose of husbandry": Keir v. Gillcspie [1] . In Re Vellacott [2] , Roche J. held that a dairymaid was a person employed in agriculture. She would at an earlier date have been equally well called a servant in husbandry: Ex parte Hughes [3] .

1. [1938] 2 K.B. 675, at p. 682. 2. [1962] 1 W.L.R. 1165, at p. 1173. 3. [1933] S.C. 366. 4. (1938) 55 T.L.R. 31. 5. [1951] 1 All E.R. 1014. 6. [1920] S.C. 67. 7. [1922] 1 K.B. 466. 8. (1854) 23 L.J. (M.C.) 138.

Such decisions upon words in other Acts, passed in England, can, of course, have little direct bearing on the interpretation of the New South Wales Act with which we are concerned. But they do show that, in the ordinary use of the English language, the word "agriculture" has not now the restricted meaning that its etymology would suggest. And, although a distinction is often made in Australia between agricultural and pastoral occupations, it cannot be said to be for legal purposes at all precise. Here, as in England, the words agriculture and agricultural often have a wide and generic meaning. Williams J. in this Court once said: "I feel no doubt that in ordinary parlance butter is an agricultural product": Producers' Co-operative Distributing Society Ltd. v. Commissioner of Taxation (N.S.W.) [4] . And that seemed to be the view too of the Privy Council when the case went on appeal, for their Lordships spoke of butter as "falling according to common conception within the genus agricultural produce": [5] .

1. (1944) 69 C.L.R. 523, at p. 538. 2. [1948] A.C., at pp. 213, 214; (1947) 75 C.L.R., at p. 138.

In short, I consider, that if the phrase "agricultural work" stood alone, it would not necessarily be read as excluding the work of tending and managing flocks and herds. But it does not stand alone. And it is the context in which it stands that narrows its meaning. "Threshing, chaff-cutting, ploughing, or other agricultural work" - surely other agricultural work is here noscitur a sociis? It comprehends, it seems to me, any work that is agricultural in the sense that ploughing, threshing, chaff-cutting are - that is to say any of the ordinary operations of tilling the soil, sowing, harvesting and the treatment on the farm of the crops.

It is important to bear in mind that the proviso is not concerned with the character of the business undertaking of the principal (here the landowner). That is the important consideration in determining whether the contract brings the subsection into operation. The critical consideration in determining whether the principal is nevertheless relieved from the consequences of its operation by the proviso is simply the character of the work to which the contract he made relates. This, I think, answers one argument advanced for the respondent and mentioned by Herron J. in his judgment as significant. His Honour referred to such operations as the spreading of fertilizer on grazing paddocks to improve the pasture, and to the ploughing of the corn paddocks of a dairy farm; and he asked why a contract for such work done by using power-driven machinery should have different legal consequences from a contract for ploughing or threshing on a wheat farm. But to my mind the consequences are exactly the same. Ploughing on a dairy farm is no less an agricultural operation than is ploughing on a wheat farm. Spreading superphosphate is cultivating the soil. It is immaterial whether the crop to be grown is improved pasture for grazing stock, fodder for silage to be fed to cattle, or grain or potatoes for human consumption. There is, I have no doubt, a distinction between agricultural work to which the proviso refers and tasks of animal husbandry which in other contexts might appropriately be called forms of agricultural work - mustering, branding, shearing, crutching, dipping, feeding, milking by hand or machinery, and so forth. But it is the nature of the work to which the contract relates, not whether the business conducted at the place where the work is done would be described as grazing, agriculture or dairying, that is important.

The erection of the fence in question in this case was, it is not disputed, for the purpose of dividing a grazing property into paddocks. So far as appears it was not associated with any purpose of the cultivation of the soil. On this ground alone therefore, I consider the proviso has no application in this case.

But I go further and reach the same conclusion on a broader ground. For it would, in my view, have made no difference if the fence were being built, not on a grazing property, but on a farm. It would have made no difference if its purpose had been, not to enclose a paddock to keep stock in, but to protect a crop by keeping stock out. Whether the area to be fenced was to be used as pasture, or as arable land where "agricultural work" would be done, seems to me to make no difference. The proviso is not concerned with work done for an agricultural purpose, but with a contract that relates to agricultural work. It is apparent from the context that this means some specific form of agricultural work, some particular agricultural pursuit or operation of agriculture. What is the specific agricultural work to which a contract to erect fencing on a farm relates? Threshing, chaff-cutting and ploughing are in their nature agricultural operations or pursuits, although they may on occasions be done for some non-agricultural purpose, thereupon ceasing to be agricultural work. But fencing is not of itself an agricultural pursuit. Fences are erected in towns and suburbs as well as in the country. As I read the proviso it is a misconstruction of it to suppose that because a fence - or a shed, or a water supply, or cow-bails or a silo - is needed for the effective conduct of a farm that a contract for its construction relates to a form of agricultural work in any relevant sense; although having it constructed may often be part and parcel of the business undertaking of the farmer.

It does not, it has been held, follow when a man is employed by an agriculturist in work connected with the business of the agriculturist, that he is himself employed in agriculture: Re Vellacott [1] . And with this I agree. Furthermore every task that a farm worker performs in the course of his duties on the farm is not, I think, agricultural work, although he may properly be said to be employed in agriculture: see Smith v. Coles [2] .

For the above reasons, I think that the decision of the Workers' Compensation Commission in this case was correct, and the decision of the Supreme Court erroneous, and that the reasoning on which the earlier decision of the Commission, Holland v. Boland [3] , was based was mistaken and ought not to be followed. It follows therefore that A. C. Reid and D. C. Reid were not relieved by the proviso to s. 6 (3) (a) of the liability that the sub-section imposed, and that this appeal should be allowed. The questions asked in the stated case should be answered (a) No, (b) Yes. The respondents A. C. and D. C. Reid should, I consider, pay the costs in this Court and in the Supreme Court of the appellant Frauenfelder; and the order of the Supreme Court as to the costs in that Court of the respondent Baldwin should be set aside and otherwise no order made as to his costs.

The appellant Frauenfelder was employed by the respondent Baldwin to assist in the erection of a subdivisional fence which Baldwin had contracted with the respondents, A. C. and D. C. Reid, to erect on a grazing property owned by them. The fence, some miles in length, was to replace one which had earlier been burnt down and, under the contract, the Reids were to supply all the materials, Baldwin and his employees providing the labour. While working on the fence and using a post-hole digger driven by mechanical power and provided by Baldwin, the appellant was injured. He took proceedings before the Workers' Compensation Commission joining the Reids and Baldwin as respondents and obtained an award of compensation against the Reids which was based upon s. 6 (3) (a) of the Workers' Compensation Act N.S.W.. That sub-section provides that "Where any person (in this subsection referred to as the principal) in the course of or for the purposes of his trade or business, contracts with any other person (in this section referred to as the contractor) for the execution by or under the contractor of the whole or any part of any work undertaken by the principal, the principal shall be liable to pay to any worker employed in the execution of the work any compensation under this Act which he would have been liable to pay if that worker had been immediately employed by him; Provided that, where the contract relates to threshing, chaff-cutting, ploughing, or other agricultural work, and the contractor provides and uses machinery driven by mechanical power for the purposes of such work, he and he alone shall be liable under this Act to pay compensation to any worker employed by him on such work."

At the request of the respondents, the Reids, the Workers' Compensation Commission stated a case which raised two questions for the opinion of the Full Supreme Court. One question was whether, on the true construction of the sub-section, the erection of the fence could be regarded as "work undertaken" by the Reids in the course of or for the purposes of their trade or business. The other was whether, assuming the first question to be answered in the affirmative, the contract between the Reids and Baldwin for the erection of the fence related to "other agricultural work" within the meaning of the proviso to the sub-section.

In the Full Supreme Court Herron J. (as he then was) and Maguire J. were of opinion that both questions should be answered "Yes". Hardie J. answered the first question "No" and therefore found it unnecessary to answer the second question. From the decision of the Full Court, this appeal is brought.

The meaning of the words "work undertaken by the principal" has been considered in a number of English cases, which are conveniently collected in the 31st edition of Mr. Willis's work on Workmen's Compensation at pp. 191 et seq. Many of these cases were considered by this Court in Moir v. Schrader [1] and I quote from what was there said by Dixon J. (as he then was): "As I understand the interpretation which the expression has received, the liability of the principal is limited to workmen employed in the execution of work forming part of the operations which constitute the exercise of the principal's trade or business. "The man of business or tradesman is not made a principal because he is in business or in trade, but because the particular work in question is his own trade or business" (Skates v. Jones & Co. [1] , per Farwell L.J.). In the same case [2] , Kennedy L.J. says that the words "work undertaken by the principal" include, besides a contractual undertaking, the performance of work which the principal may be said to "undertake" because he has adopted it as his particular trade or business." [3] . Later, his Honour spoke of this interpretation as being "based upon the view that from the course of the principal's trade or business and the manner in which he conducts it, he will be found to have assumed responsibility for the performance of a class of work, the fulfilment of given functions or the pursuit of a system of activities" [4] , but went on to point out that "when, although the work performed by the injured workman is necessary to enable the principal to carry out the operations the execution of which he has adopted as his trade or business, yet that work does not form a component part of the operations and only contributes or conduces to their performance or is preliminary or ancillary or incidental to them, then the workman must look to his direct employer for compensation" [5] .

1. (1936) 56 C.L.R. 310. 2. [1910] 2 K.B. 903, at p. 910. 3. [1910] 2 K.B. 903, at p. 912. 4. (1936) 56 C.L.R., at pp. 320, 321. 5. (1936) 56 C.L.R., at p. 323. 6. (1936) 56 C.L.R., at p. 324.

It is, of course, common knowledge that the erection and repair of fencing is work necessary to be done to enable a grazing business to be carried on and, although it could not be said in the present case that the Reids' trade or business was that of erecting fences, I think it was open to the learned Commissioner to find, as he did, that the work here in question was a "component part" of the grazing business carried on by them. Accordingly, I agree with Herron and Maguire JJ. that the first question should be answered "Yes". I am unable, however, to take the same view of their Honours' answer to the second question. The words in the proviso "threshing, chaff-cutting, ploughing" relate to the cultivation of the soil and the treatment of its products and the words "or other agricultural work" which follow should, I think, be limited to activities associated with the tillage of the land and the planting, growing, harvesting and treatment of its crops and not construed as including activities which, but for the context in which the words are found, might well be described as "agricultural work".

In the Supreme Court their Honours who dealt with this question were of opinion that an examination of the history of the proviso threw some light on its meaning. The English Workmen's Compensation Act of 1900 made the Act of 1897 applicable to certain classes of agricultural workers. It contained a proviso similar to the one with which this case is concerned and defined "agriculture" to include "horticulture, forestry and the use of land for any purpose of husbandry, inclusive of the keeping or breeding of livestock, poultry or bees and the growth of fruit and vegetables". But in the consolidating English Act of 1906 this definition was omitted and it has never appeared in the New South Wales legislation. In these circumstances no assistance can, I think, be gained from the history of the proviso.

For these reasons I am of opinion that the work in which the appellant was engaged when he sustained his injury was not "other agricultural work" within the meaning of the proviso and to this extent the appeal should be allowed.