Jones v SNF

Jones v SNF - [1936] HCA 69 - HCA 1936 case summary — Zoe

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The respondents purchased 416 acres of land at Castle Hill by way of speculation, their ultimate purpose being to subdivide it into farmlets and then sell the farmlets to the public. The land was fairly heavily timbered, and in connection with the clearing of it, preparatory to subdivision, they decided to cut up the small trees into firewood blocks and sell them as such to the public, and to endeavour to sell the remaining big timber 7m situ for milling purposes. The conversion of the small trees into firewood necessitated the purchase by the respondents of tree-felling tools, the erection of a shed, and the installation of sawing machinery on the Castle Hill property. On 2nd January 1935-the respondents by their agent, one T. B. Phillips, entered into a contract with Harry Sutley Sullivan, a carrier, and R. Adams, an engineer, which was in the following terms, and duly stamped : - "In consideration of your erecting shed over engine and saw-bench and portion of slides as per plan handed to you by Mr. Phillips with any modifications he may suggest, you to employ 4 men, 2 working on the forest devil and snigging, the other two erecting the shed I undertake to pay you the sum of £24 payable as the building proceeds, you to line engine and adjust same to saw-bench and do all things necessary to put engine, saw-bench and slide in working operation. It is agreed that £5 of this money be retained until such time as the engine has worked at full cutting for two days and on the saw operating it is understood that your contract of 3s. per ton starts, and that no future wages be paid to you, the payment of 3s. per ton to include the wood that was cut into 9" blocks the two days above-mentioned. Yours faithfully, T. B. Phillips. Agreed to, H. s. Sullivan, R. Adams." The agent had interviewed Sullivan early in December 1934, was present when Sullivan subsequently interviewed the respondents in Schrader's office, and from time to time on behalf of the respondents inspected and passed the work carried out by the contractors on the Castle Hill property and paid them. About.

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the time the contract of 2nd January 1935 was entered into Adams asked the applicant " if he would like a job wood cutting " at the living wage. The applicant agreed, and on 7th January he commenced work with Sullivan and Adams on the respondents' Castle Hill property and was paid £3 12s. 6d. per week. On 11th January the respondents, by their agent, paid the contractors the sum of £14 "on account contract re-erection of shed for engine staging and slide," and on 17th January the agent made payment of £5 to the contractors, the receipt therefor being in the following terms : - "Received from Mr. Phillips on behalf of Messrs. Shannon and Schrader the sum of £19, being Ist payment on 11th Jany. of £14 and 2nd payment of £5 Os. 0d. on this date making in all £19 Os. Od., balance due on completion £5 0s. 0d. H. S. Sullivan, R. Adams." The contractors had made an atrangement that Sullivan, and three assistants, were to fell trees and haul logs to the saw-bench to be cut up for firewood, and that Adams and the applicant were to work on the engine and saw-bench. On 17th January Adams and the applicant were working on the saw-bench, and, after fitting the belt on the 18 inch circular saw, tested the saw. In the presence of the contractors, the agent mentioned that a space left between the top of the bench on the left side and the saw constituted adanger. Later in the afternoon the contractors worked the engine and used the saw; they commenced cutting up logs into firewood blocks not more than 9" in length and 9" in diameter. Adams cut up one log, Sullivan cut another, and the applicant cut a third log. It was then about 4.45 o'clock p.m. and they decided to put another log through the machine before finishing work for the day. The applicant put another log on the machine and commenced cutting it. He stood facing the saw, holding the piece which was about 4" in diameter, and at the moment in question 2' 9" in length. He had nearly severed a 9" length when the saw jammed. The applicant eased the log away from the saw and allowed it to gather speed. He then pushed the piece against the saw but the piece rolled instead of sliding and as a consequence it broke where previously cut, both the 9" and the remaining 2' pieces falling from the saw. In the effort to save himself from falling on the saw, the applicant's left hand came in contact with

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your contract of 3s. per ton starts, and no future wages be paid to you, the payment of 3s. per ton to include the wood that was cut into 9" blocks the two days above mentioned." Sullivan and Adams proceeded with the erection of the shed, and the installation of the plant, and they employed the appellant Moir on this work. Accord- ing to the evidence attached to and forming part of the case, Moir met with an accident before the installation of the plant was com- pleted, or at all events before the engine had worked at full cutting for two days. A test was being made of the sawing machine, some five logs had been cut, and the appellant was cutting the sixth into firewood lengths, when the saw jammed and the accident happened, resulting in the appellant losing the tops of two fingers on his left hand. He made a claim against the respondents, based upon the provisions of sec. 6 (3) (a) of the Workers' Compensation Act 1926- 1929, which is as follows: " Where any person (in this sub-section 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 the 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; and where compensation is claimed from or proceedings are taken against the principal, then, in the application of this Act, reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the worker under the employer by whom he is immediately employed." The Workers' Compensation Commission awarded the appellant compensation, but the Supreme Court, upon the case stated, determined that the commission erred in law in making its award. The commission made the following finding : "' The respon- dents were ' principals' within the meaning of sec. 6 (3) (a) of the Workers' Compensation Act 1926-1929, and in the course of and for the purposes of their firewood business contracted with Messrs. Sullivan and Adams for the execution by or under them of part of the work undertaken by the principals, and that the principals are

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Kennedy L.J. says that the words "work undertaken by the principal" include, besides a contractual undertaking, the perform- ance of work which the principal may be said to " undertake" because he has adopted it as his particular trade or business. The application of this view of the provision is illustrated by the decision in the case. A syndicate formed for the purpose of conduct- ing a skating rink purchased an existing structure for removal to the site chosen. They let a contract for the removal and re-erection of the building and, in the course of that work, one of the contractor's men was injured. Although the contract may have been for the purpose of the business of a skating-rink proprietor, it was held not to be for work undertaken by the principals who had adopted that business. The Court of Appeal cited with approval an earlier case which further illustrates the limitation. It is Spiers v. Elderslie Steamship Co. Ltd. (1), in which the Court of Session decided that, although the business of shipowning involved maintaining ships' boilers in good condition, the operation of cleaning them was not one which the shipowner undertook as part of his business. On the other hand, coal merchants who in the course of that trade acted as lightermen were considered to "' undertake" work which included the navigation of a lighter from the place where it was taken over by them from the shipbuilders to the depot where it was to be employed in the coal trade. Accordingly they were held liable to a member of the crew injured upon the voyage, notwithstanding that he was employed by an independent contractor to whom the owners had delegated the work of taking the vessel out to the depot (Dittmar v. Owners of Ship V593 (2) ). The coal merchants in the course of their trade or business contracted for the execution of part of the work proper to their undertaking and in that sense undertaken by them (per Cozens-Hardy M.R. (3)). This means that the work of navigating the vessel which they had delegated was regarded as a component part of the work which the coal merchants had assumed to perform as traders. In this it differed from boiler-clean- ing and from the operation of overhauling barges which, in Hayes v. S. J. Thompson & Co. (4), was held to be not part of the trade

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or business of barge owners but only work which arose out of it. The fact that boiler cleaning or scaling is never done for himself by a particular shipowner but is always entrusted to contractors may show that the work "undertaken" by that shipowner does not embrace such operations (Luckwill v. Auchen Steamship Co. Ltd, (1) ). This accords with the view taken in Bush v. Hawes (2). It was there held that, to determine whether a thing was in the usual course of or for the purpose of a trader's business, it was necessary to consider not how such a business was generally conducted by others but what was the nature of the work done by the particular trader. In two further cases the Court of Appeal-has applied the same interpretation of the word "undertaken." In Hockley v. West London Timber and Joinery Co. (3) a manufacturer of mouldings used timber purchased from abroad. The manufacturer, acting in accordance with the general practice of the trade, did not employ his own servants to take delivery of the timber from the ships by which it wasimported. Contracts were made with several contractors for the successive operations of receiving the timber into barges, carting it from the wharves upon which it was discharged from the barges and unloading the timber from the carts and stacking it in the yards where it would season. It was held that the operation of stacking was not part of the work " undertaken " by the manufac- turers of mouldings. Pickford L.J. said : - '' In order to do their business of moulding manufacturers they must have timber, and they must have seasoned timber. Therefore the timber is stacked, and it is stacked for the purpose of being seasoned, but the stacking and seasoning are not parts of the actual operation of moulding manufacture, and it is a thing that has been always done by this firm, and by other firms in the same business, by means of contractors, and not by means of their own men or by themselves at al]. The authorities make it quite clear that it is not enough that the work that is being done should be incidental to, or even necessary for, the preparation for the work which is actually done by the principal" (4). In Bobbey v. W. M. Crosbie & Co. Ltd. (5) the Court of Appeal applied this

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to them and to place the goods in their store. But they did so by paying a lump sum to a wharf labourer who collected a gang to do the work and divided the payment amongst the members of the gang; and the House of Lords reversed the decision of the Court of Appeal on the ground that under this arrangement the members of the gang were directly employed by the manufacturers and there was no contractor intervening (1). In the Court of Appeal Lord Cozens-Hardy M.R. said that the work of unloading a bulk cargo was not work undertaken by the principals. '"' They deliberately abandoned such work, one experiment having satisfied them that their own men were not suitable for such work, and they employed gangers or similar men to do the work" (2). In Northern Ireland the actual decision in Hockley's Case (3) has met with disapproval (Cole v. Calvert and Harpur (4) ). The facts of the latter case do not appear to me to involve the principle upon which Hockley's Case (3) was decided. But, in any event, that principle, or inter- pretation of the section, is well settled in England and the question whether it was correctly applied to the facts of the particular case seems unimportant. It is unnecessary to say that as the legislation has been almost literally transcribed we should apply the interpreta- tion adopted by the English Court of Appeal. Unfortunately the principle which that interpretation of the words " any work under- taken " ascribes to the legislation is not susceptible of exact definition and of completely certain application. It is 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. What he has thus adopted as his proper operations, he may accomplish by means of direct employees, or by means of contracts which remove him from the relation of employer with the workmen who do the work. Whichever be his method, he is to be responsible for the workers' compensation payable to those injured in the course

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rink was to be conducted by the respondents was not work undertaken by them within the meaning of the section. The Master of the Rolls, distinguishing between work " required" by a business man for the purpose of the business and work " undertaken" by him, rejected the former characteristic as a criterion of liability under the section. In illustrating the section the Master of the Rolls said that a cotton spinner would not be made liable as a principal should he contract with a boiler-maker to replace a boiler. The reason assigned was that "he never held himself out as a boiler-maker. It was not part of his trade or business to erect boilers" (1). Farwell L.J. said in the same case: " We are not entitled to use the marginal note as a guide to construction, and I do not rely on it: but the section appears to me to have been originally intended to apply to the contractor who sub-lets part of his contract and then to have been developed on the basis that a contractor who does work for another on contract is in the same position towards the workman as the contractor who does the same class of work in the usual way of business for himself and sub-lets part of it, and this explains the words 'undertaken by the principal' as including the man who undertakes in the usual course of his business to do the work, whether for himself or for another " (2). He concluded his observations on the section by saying: " The man of business or tradesman is not made a principal because he is in business or trade, but because the particular work in question is his own trade or business; and this is the true construction of the section in my opinion" (3). Kennedy L.J., the third member of the court said: "Besides that which I should call the natural sense of a contractual undertaking, these words include the performance of work which the principal may be said to "undertake ' because he has adopted it as his particular trade or business" (4). In Hockley's Case (5) the Court of Appeal decided that the work of stacking wood was not part of the work undertaken by the respondents, who were manufacturers of wood mouldings. There the Master of the Rolls again denied that everything that was reasonably necessary to be done for the purpose of a business or incidental to it is " work undertaken by " the person carrying on

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Judgment (97 paragraphs)

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