Misleading or inaccurate
68 The relevant passage in the Tribunal's reasons at [128] - [131] is set out above. The statements in question were that Mr Ruthenberg did 'not work for' Australia Go and that he 'was not employed at all'. Mr Hartnett asserted that he had used the word "work" in the sense in which it is defined in the Regulations. Regulation 1.03 provides:
'… work means an activity that, in Australia, normally attracts remuneration.'
69 The Tribunal rejected Mr Hartnett's assertion, saying at [129]:
'… the letter did not have the status of a legal opinion. It was a letter to be signed by someone employed by the Academy. The letter does not suggest that the term "work" is being used other than in its normal sense.'
70 In the third paragraph on p 2 of the letter, the following passage appears:
'I believe that Alain has made huge personal sacrifices to come to Australia and pursue his tertiary studies. It would be most unfortunate if Alain's attendance at AOST with Elisa and Nicole was wrongly considered as work and activity that would normally attract remuneration. … This role of accompanying a new student as a friend can not be replaced by a paid worker for example.'
71 The words 'work and activity that would normally attract remuneration' appear to us to be a clear reference to the definition of the term "work" in the Regulations. In those circumstances we doubt whether the Tribunal was correct in observing that, '[t]he letter does not suggest that the term "work" is being used other than in its normal sense'.
72 The statement that Mr Ruthenberg did 'not work for the company' describes the relationship between him and his company. It may be that at some places in the evidence and perhaps in the Tribunal's reasons, it was not thought necessary to distinguish between Mr Ruthenberg and the company. In particular, although it seems to have accepted that the student recruitment business was being conducted by the company, such activities are often referred to as if they were the activities of Mr Ruthenberg. Similarly, it seems probable that income derived from these activities was derived by the company. Nonetheless, on occasions, such income is referred to as if it belonged to Mr Ruthenberg. Obviously, in considering whether or not Mr Ruthenberg was working for Australia Go, it was necessary to consider both the nature of the company's activities and the nature of the activities undertaken by him in connection with its operation. It was also necessary to look at any legal relationship between him and the company.
73 The statement that Mr Ruthenberg did 'not work for the company' was capable of at least two interpretations. If the definition of "work" in the Regulations were adopted, then the question was whether or not Mr Ruthenberg was performing work which, in Australia, would normally attract remuneration. He was managing director of the company, although there is no evidence as to the means by which he was appointed or his duties. It seems that he "managed" the company, but we were referred to very little evidence as to what he actually did. Mr Ruthenberg gave evidence concerning his activities, but the extent to which the Tribunal accepted it is unclear.
74 At [60] the Tribunal observed:
'Between the time of incorporation of Australia Go and the [Notice of Intention to Cancel][Mr Ruthenberg] had performed a little work, helping students enrol and advising them what documents they required. [Mr Ruthenberg] spent one to two hours per day "that was work, but not work". [Mr Ruthenberg] had regularly advised [Mr Hartnett] of the nature of [Mr Ruthenberg's] business activities and [Mr Hartnett] knew that [Mr Ruthenberg] was involved in establishing a network of agents.'
75 Presumably the Tribunal accepted at least those aspects of Mr Ruthenberg's evidence. In a statement provided to the Tribunal, he estimated that between 14 June 2000 and the end of August in that year, he worked for about ten hours. The work which he there described was similar to conduct described in Mr Hartnett's submissions on his behalf. However Mr Hartnett stressed the occasional and limited nature of such activities, suggesting that it was social rather than commercial. The Tribunal concluded only that Mr Ruthenberg's activities '… might be construed as work'. It gave no reasons for concluding that it was work (if it in fact reached that conclusion) nor for rejecting the characterization adopted by Mr Hartnett in his submissions to the Department. Given the limited amount of time devoted by Mr Ruthenberg to those activities, Mr Hartnett's suggestion that they were social rather than commercial was not inherently improbable.
76 If we were dealing with a large public company, there would be no difficulty in inferring that the work performed by its managing director would normally be remunerated in Australia. This may not be so in the case of the managing director of a new and very small, proprietary company. Certainly it would be by no means uncommon, in those circumstances, for a director to perform duties on a gratuitous basis. It may be less common for a person who actually performs the usual functions of a managing director to do so, but in the absence of any substantial evidence as to Mr Ruthenberg's duties, it is difficult to draw the inferences necessary to justify the conclusion that he was doing work which would normally be remunerated.
77 As we have said, there are two ways of construing the expression 'does not work for the company'. The words "work for" not infrequently describe the relationship of employer and employee without necessarily saying anything about the work actually performed. In other words the expression "work for" may well mean "employed by". The accepted view concerning the status of a director is set out at par 27.2.4 of Gore-Browne on Companies (Boyle & Sykes), where the learned authors observe:
'The cases also contain some discussion as to whether a director of a company is, or can be, an 'employee' of the company. The answer to this question depends very much on the particular context for which it is required; a particular director may, for instance, be an 'employee' for the sake of a statutory provision referring to employees, but not for the sake of an employees' pension scheme. Thus, in the last resort, the question may chiefly be one of construction of the word 'employee' in its immediate context. Subject to this warning, it may be suggested that usually a director who performs no more than the tasks of a director pure and simple (attending board meetings, and the like) will not be considered an employee of the company, whereas if he is appointed to some executive post such as managing director, or if he works full-time or part-time for the company so as to be part of its 'labour force', these activities may make him an 'employee' even though he is also a director.'
See also Palmer's Company Law (24th ed) at par 60-02.
78 As far as we can see, no attempt was made to identify with precision the duties actually performed by Mr Ruthenberg on behalf of the company, to ascertain the legal nature of his relationship with it or to identify the circumstances which led to his being described as "managing director". Again, in the absence of such evidence, any inference would be little more than speculation.
79 As to the expression 'is not employed at all', we understand MARA's assertion to be only that Mr Ruthenberg was employed by Australia Go. For the reasons which we have already given, there are considerable difficulties in reaching that conclusion. Although it is not necessary for us finally to determine this aspect of the matter, out of fairness to Mr Hartnett we record that we are far from persuaded that the Tribunal gave appropriate attention to it.