Jim Fileris, trading as Stretch (Australia) Pty Limited v Sims Metal Limited

JURISDICTION 11The jurisdiction to provide a remedy for a contract driver - reinstatement or monetary compensation - has been confirmed in precedents such as Re Transport Industry (General Carriers) Contract Determination - Appeal by the Transport Workers' Union of New South Wales (1993) 46 IR 154, Deltec International Courier Pty Limited v Transport Workers' Union of New South Wales (1993) 50 IR 341 and Cherry v Allied Express Transport (1997) 73 IR 305. But to fall within jurisdiction under Chapter 6 the contract driver must, in terms of s.310(1) be a principal contractor, ie: "...the person for whom the carrier under a contract of carriage agrees to transport goods to which the contract relates..." 12And a contract of carriage is defined in s.309(1) in the following terms: "For the purposes of this Chapter, a contract of carriage is a contract (whether written or oral or partly written and partly oral) for the transportation of goods by means of a motor vehicle or bicycle in the course of a business of transporting goods of that kind by motor vehicle or bicycle, but only: (a) where the carrier is not a partnership or body corporate - if no person except the carrier is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the carrier or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business, or (b) where the carrier is a partnership - if no other than a partner is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the partnership or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business, or (c) where the carrier is a body corporate - if no person is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the body corporate or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business unless the person is: (i) a director of the body corporate or a member of the family of a director of the body corporate, or (ii) a person who, together with the member of his or her family, has a controlling interest in the body corporate, or (iii) a member of the family of a person who, together with the members of his or her family, has a controlling interest in the body corporate." 13Moreover, there is some scope in s.309(3) to extend the jurisdiction further, viz: "A contract of carriage includes any contract that the Commission declares, after inquiry, to be such a contract. The Commission may make such a declaration if, in its opinion: (a) the contract was entered into for the purpose of defeating, evading or avoiding the provisions of this Act relating to contracts of carriage, and (b) but for being entered into for that purpose, the contract would have been a contract of carriage." 14The provisions of s.309(3) have not been explored by the parties in this hearing. 15The essential issue before me turns entirely on whether or not Mr Fileris worked as a common carrier, because he would be excluded from jurisdiction under Chapter 6 if he were so categorised. In that respect s.309(4) exempts a range of contract drivers, including common carriers from the operation of Chapter 6, viz: "A contract of carriage does not include a contract: (a) that is, if the carrier is a common carrier, made in the ordinary course of the business of the carrier as a common carrier, or (b) that is made in the ordinary course of business for the carriage of packaged goods for different principal contractors by the use of the same motor vehicle or bicycle, or (c) for the carriage of mail by or on behalf of Australia Post, or (d) for the carriage of bread, milk or cream for the sale or delivery for sale, or (e) for the carriage of goods that are to be sold pursuant to orders solicited during the carriage of the goods, or (f) for the carriage of livestock, or (g) if the principal contractor is a primary producer or a member of the family of a primary producer and the contract is for the transport of primary produce (other than timber), or (h) for the transportation of primary produce (other than timber) from or to land used for primary production, or (i) for the delivery of meals by couriers to homes or other premises for consumption." 16There is no definition of a common carrier contained in Chapter 6. I believe that the reason that no definition is provided in Chapter 6 for a common carrier flows from what was actually said about common carriers in the report following the inquiry conducted by the Full Bench of the former State Industrial Commission (Beattie J - President, Sheehy and Sheldon JJ) in 1970 - the so-called Beattie Report - from which Chapter 6 ultimately evolved (and to which I will refer in more detail later in this decision). 17It is therefore necessary to rely on what is generally understood by that term common carrier as a legal concept. That having been said, what distinguishes a common carrier is that he offers his services in the transportation of goods (or passengers) to the general public and he becomes responsible for any loss or damage to goods during the transport [ Frankhauser v Mark Dykes (1960) VR 376]. By comparison, a contract carrier transports goods for only one identified client - exclusive hire. However, as I understand the position, it is not uncommon for contract carriers to also perform work for other clients from time to time without losing their status as contract carriers, provided that arrangement is acknowledged and accepted by the principal contractor and provided they remain primarily under the engagement of the principal contractor. 18In that respect Mr Ludeke drew my attention to an unreported 1939 judgment of the High Court (Dixon J) in James v Commonwealth [BC390033]. His Honour had this to say (at p.6): "....The holding out or profession of the character of common carrier may be expressed, or it may be, and usually is, implied by a course of business or other conduct. It is in every case a question of fact whether the character of a common carrier has been assumed. In considering that question an important matter is whether the carrier holds himself out as ready without discrimination to carry the goods of all persons who may choose to employ him or send him goods to be carried. If, instead of inviting all persons without discrimination to use his ships or vehicles, he reserves the right of choosing among them, independently of the suitability of their goods for his means of transportation and without regard to the room or space he has available, then he is not a common carrier..." 19So the issue is essentially to determine whether or not Mr Fileris works for Sims Metal either exclusively or in such a manner that the other work he performs complies with the contract of carriage under which he works for it or whether he holds himself out to work for the general public, which also includes Sims Metal. 20As I indicated earlier in this decision, I believe that the exclusion of common carriers from the operation of Chapter 6 is actually a reflection of the views expressed in the Beattie Report. It commented (at para.30.36) that there was, in fact, a good deal of common ground between the parties in the inquiry on a range of issues, and in particular: "....all agreed that common carriers should not be included and it is only the trade unions which do not specifically exclude the general carrier who, though not a common carrier, is closely analogous to one but their counsel said that, in the light of the practicalities, he found it difficult to press for a recommendation that such a carrier should be covered..." 21And later (at para.30.51) the report has this to say: "....Common carriers are at present excluded from s.88E(1)(c) (of the Industrial Relations Act, 1940 , a provision which dealt with persons deemed to be employees) and we again agree with the parties that they are a class inappropriate for industrial regulation... It follows...that the term 'common carrier', being a purely legal concept, is too narrow in its meaning to embrace the whole class of carriers really of the same genus which should be excluded from industrial regulation. We...indicated that, though not in law common carriers, there is a class of private carrier of the same type where there is equally no analogy with employment but, on the contrary, all the features of true contracting and this is whether one or more vehicles are being used. We forecast...that the real problem here is not in knowing broadly the carriers who should be excluded on this basis (they can be recognised almost instinctively) but in drafting an appropriate definition. Our fears as to drafting difficulties were realized... We have, however, reached the conclusion that the reason why the expression 'common carrier' is too narrow for this purpose is merely that it is confined to one who holds himself out as willing '...to carry for hire as long as he has room for the goods of all persons indifferently...' and what we wish to do is to cover in the exclusion of a carrier who in fact does this, even though he does not hold himself out to do so. We would therefore recommend for exclusion common carriers by land and carriers (although not common carriers) who carry on the business of transporting for the public generally freight such as parcels, packages, cases, cartons, drums and the like. The freight we have specified should make it clear (and in any event it is our intention) that the cartage of bulk commodities such as sand, blue metal and gravel, excavation and muck, ready-mixed concrete, etc should not be excluded from regulation, irrespective of the nature of the carrier's business..." 22No doubt scrap metal may indeed fall under the type of product which the report actually recommended as appropriate for consideration for regulation, ie it would likely be a bulk commodity, similar to the type of product referred to in the report. But that not been picked up by the State legislature. No distinction is now made along those lines in Chapter 6. THE EVIDENCE 23Sims Metal trades by buying and selling ferrous and non-ferrous scrap metal products for both the domestic and international markets. It is primarily involved in processing scrap metal products. Mr Commons indicated in the written statement he provided as the basis of his evidence that: "as such the company considers itself to be a purchaser, manufacturer and processor of scrap metal. Sims has approximately 30 carriers supplying over 200 vehicles for it in New South Wales at any particular time, collecting recyclable materials and moving such materials between Sims' facilities..." 24Mr Fileris had carried materials for Sims Metal since the middle of 2006. It appears from the evidence before me that Mr Fileris actually conducts several transport businesses under his own name and different business names, some apparently incorporated and some not - Stretch Express, Stretch Express Tpt, Stretch Australia Pty Limited [ABN 73 138 158 175], Stretch Express Transport , ABNLookup [ABN 78 310 833 657] and Malilis Pty Limited [ABN 63 109 725 073]. In particular, Stretch Express trades with CMC Recycling and All Metal Recyclers International, which I understand from Mr Commons' evidence to be related businesses and both competitors and customers of Sims Metal. Mr Fileris owns a farm but asserts that he runs it not as a business. He also provides a volunteer animal rescue service transporting injured or neglected animals. 25There is much interaction between the separate entities under which Mr Fileris trades and also his personal interests. Indeed, Mr Ludeke described Mr Fileris's financial records as "unusual". And that is true. The truck which Mr Fileris drives for the work he performed for Sims Metal [A semi trailer Kenworth tipper] is registered in the name of Malilis but he trades with it under Stretch Australia. Mr Fileris finances his transport business from time to time with personal loans. He conceded in the written statement which formed the basis of his evidence in this hearing that he was "...computer illiterate..." and a poor record keeper, relying on his wife in that respect. It may be in Mr Fileris's interests to regularise his casual financial record keeping. 26But for the purposes of this hearing, it is clear to me that Mr Fileris did not exclusively work for Sims Metal, although Mr Fileris claimed in a written statement which formed the basis of his evidence in this hearing that he originally did so, at least before he took on work for CMC. He wrote: "....I considered that I was obligated to work principally for the company. Up until when I started doing some work for CMC in 2009, my relationship with the company was one of exclusive hire. Thereafter I still did most of my work for the company and any direction from the company took priority over work for CMC. I never refused work from the company in order to do work for CMC. I only did the CMC work after I had finished all my work for the company or if there was no work available from the company. I believe and only did additional work for CMC because I thought that the company had given permission for me to do this additional work. Some of the CMC loads were taken to the company's facility at St Mary's for processing and the company must have been aware that I was doing this additional work. When I commenced doing work for CMC I made it very clear that I would only do this work if I had permission from the company to do this work as I did not want to jeopardize my relationship with the company..." 27Mr Commons indicated in his evidence that Mr Fileris and the other drivers he engaged from time to time were offered work on an ad hoc basis and were free to accept or reject that work offered to them. Sims Metal had a range of drivers who would be offered that work, depending on the nature of the work in question, the size of the truck available for use and the location of the job. The fact that Mr Fileris performed work for others presented no problem to Mr Commons. In fact, he did not wish the drivers he hired to be confined to work for Sims Metal alone. He indicated in the written statement he provided as the basis of his evidence: "....I was aware that Mr Fileris carried for other companies in addition to Sims. In fact, he was encouraged to do so by Sims. Because of the nature of Sim's business, Sims recommended to Mr Fileris and other carriers that they are free to pursue other avenues of work. This was because Sims would not be able to offer consistent work as Sims has no guarantee of customer-related volumes..." 28Mr Commons also asserts that he had discussions with Mr Fileris late in 2007, which he recounted in his evidence. Mr Commons asked Mr Fileris where he had been over the previous three months and Mr Fileris informed him that he had been in Greece on holidays. Mr Commons said either in jest (according to him) or with sarcasm (according to Mr Fileris): "Greece is a lovely place. I was there in September, 2006. You must be making a fortune if you can afford to park your truck for so long." 29Mr Fileris responded in the same vein - with sarcasm or as a joke, he claimed: "I own more than one truck. I have a couple working at Toll doing container work." 30But Mr Fileris indicated in his evidence that he had no such additional work from that particular transport business. However, Mr Ludeke has suggested in his cross-examination of Mr Fileris and in his subsequent submissions that Mr Fileris actually earns an income from many sources, including Toll Transport, for the transport of goods. For instance, he did receive payment from something recorded in his bank statement as PGS. Also there are some gaps in the financial records which Mr Fileris supplied which suggested to Mr Ludeke that he has not produced all of his earnings from his transporting activities for consideration in this hearing. 31Mr Commons had told Mr Fileris in late 2007 that he would need to supply him with all of his insurance policies for public liability and workers compensation with respect to the vehicle he used when driving for Sims Metal and that he required him to be incorporated. Mr Bull argued in his submissions that the directions Mr Commons gave in that respect pointed to Sims Metal actually being a principal contractor for Mr Fileris and that therefore Mr Fileris was not a common carrier. 32Early in 2008 Mr Fileris provided details of his insurance coverage - in his own name and the name of Malilis Pty Limited. At that time Mr Fileris was working for Sims Metal under the trading name of Stretch Express. Mr Commons informed Mr Fileris: "The insurances need to be in the name of Stretch Express which is what you are trading as to Sims. So the options are to have Stretch Express added to the insurance policy or change your trading name to Malilis Pty Limited." 33Mr Fileris was apparently tardy in providing that information to Mr Commons and did not do so until late in 2009 when Mr Commons gave him an ultimatum that if he did not provide proof of insurances and incorporation, Sims Metal would discontinue using him. Mr Fileris formed a new corporate identity in Stretch Australia, rather than rely on the existing entity of Malilis. He had his own reasons for having done so. He claimed that it would have cost him over $6,000.00 to transfer the truck he drove from Malilis to Stretch Australia. 34As Mr Bull indicated in his submissions, incorporation does not deprive of a transport business of coverage under Chapter 6. As I outlined earlier in this decision, Chapter 6 applies where the contract carrier is a sole trader [s.309(1)(a)], in a partnership [s.309(1)(b)] or trades as corporate entity [s.309(1)(c)]. And it is common for contract drivers to form themselves into corporations for their business operations. They are not deprived of the protection of Chapter 6 by incorporation of their business. 35Nor, in my opinion, does it necessarily follow that Mr Fileris is denied access to the protections afforded by Chapter 6 by the fact that he was not exclusively engaged by Sims Metal. The protection afforded by Chapter 6 is not denied him by that fact alone. There is no doubts that Mr Fileris performs other transport work and, it appears to me, holds himself out to perform such work. In that respect Mr Bull referred to the 1996 decision of the Contract of Carriage Tribunal of the Commission (chaired by Peterson J) in Rumsey and R Clifford and Son Holdings Pty Limited [1996] NSWIRC 59 where it was held that the fact that carriers did work for another party associated with, but separate from, the purported principal contractor, did not deprive them of being properly categorised as contract carriers. But does that other work that Mr Fileris perform suggest that he would be properly categorised as a common carrier or a contract courier as far as Sims Metal is concerned and was Sims Metal properly regarded as a principal contractor to him? 36Mr Fileris claimed in his evidence that on Wednesday, 15 December, 2011 he was told on the telephone by a representative of Sims Metal: "You no longer have employment here. Go and find yourself new employment. You are no longer employed by Sims Metal." 37Mr Fileris claimed that he made no response to that telephone call. Clearly, Mr Fileris engagement with Sims Metal was not employment . Nor is it appropriate to regard what happened to Mr Fileris as a dismissal . I believe that representative of Sims Metal was doing no more than indicating that Mr Fileris was no longer to be picked up by Sims Metal for work. 38In my opinion, it is not strictly relevant what the relationship between Mr Fileris and any other customer of his transport operations - which Sims Metal accepts that it had no concerns over and did not oppose. But it is the actual relationship between Mr Fileris and Sims Metal at issue and that is dependent in large part upon the nature of the actual contract under which he was engaged with Sims Metal. 39I prefer the evidence of Mr Commons in that respect. I see the relationship between Mr Fileris and Sims Metal as falling outside the terms of Chapter 6. I am satisfied that Mr Fileris was entitled to work for any number of other clients under the range of related entities in which he carried out his transport business. Because of the manner in which he arranged his transport operations, it is inappropriate to confine his claim to the one entity - Stretch Australia - under which he worked for Sims Metal: all of his business interests should be taken into account as the proper assessment of his status. 40As I indicated earlier in this decision, Mr Ludeke suspects that Mr Fileris also presented himself for work for customers other than CMC - not really identified sufficiently in this hearing. The evidence of that is not particularly satisfactory, in my opinion. But that is not really the point. Clearly, as far as Sims Metal was concerned, Mr Fileris was entitled to take on any other work, whether he actually did so or not. To my mind, he was not dependent upon Sims Metal as his exclusive, or even principal, client. He was a common carrier. CONCLUSION 41For that reason I dismiss the TWU application made on his behalf as falling beyond jurisdiction under Chapter 6. P J CONNOR Commissioner DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 October 2011