Court of Appeal (WA)|2003-09-25|Before: Malcolm CJ

Jones v Wesfarmers Ltd [2003] WASCA 225 (25 September 2003)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : JONES -v- WESFARMERS LTD [2003] WASCA 225

District Court appeal - Question of the proper interpretation of s 175 of the Workers' Compensation and Rehabilitation Act 1981 (WA) - Whether s 175 did or did not deem the appellant to be an employee of the respondent - Definition of "in respect of premises" to include a chattel

Workers' Compensation and Rehabilitation Act 1981 (WA), s 175

Bobbey v W M Crosbie & Co Ltd (1915) 114 LT 244

Hayes v S J Thompson & Co (1913) 6 BWCC 130

Hockley v West London Timber and Joinery Co (1914) 3 KB 1013

Skate v Jones & Co (1910) 2 KB 903

1 MALCOLM CJ: This appeal involves a question of the proper interpretation and application of s 175 of the Workers' Compensation and Rehabilitation Act 1981 (WA) ("the Act") which provides that:

"175. Principal contractor and sub-contractor deemed employers

(1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act.

(2) The principal is entitled to indemnity from the contractor for the principal's liability under this section.

(3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal.

(4) Where the principal and the contractor are jointly and severally liable under this section, a judgment obtained against one is not a bar to proceedings against the other except to the extent that the judgment has been satisfied.

(5) Where compensation is claimed from or proceedings are taken against the principal, in the application of this Act a reference to the employer shall be read as a reference to the principal except where, for the purpose of calculating the amount of compensation, a reference is made to the earnings of a worker, the reference shall be read as a reference to the earnings of the worker under the contractor.

(6) For the purposes of this section, where sub-contracts are made 

(a) 'principal' includes the original principal for whom the work is being done and each contractor who constitutes himself a principal with respect to a sub-contractor by contracting with him for the execution by him of the whole or any part of the work;

(b) 'contractor' includes the original contractor and each sub-contractor; and

(c) a principal's right to indemnity is a right against each contractor standing between the principal and the worker.

(7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply."

2 The question arises against a background of agreed facts. The appellant is an automotive electrician who on 25 November 1998 ("the material date") was employed by Seeley Auto Electrical Pty Ltd, the First Third Party ("Seeley"). The first defendant in the proceedings was SNF (Australia) Pty Ltd ("SNF"). At all material times, SNF was engaged in the performance of a contract to supply and deliver flocculant to the Bulong Nickel Project situated 35 km away from Kalgoorlie. The flocculant was required for the purposes of industrial waste water treatment. It was manufactured by SNF in dry powder form. It was vital for the viability of the flocculant that it was not contaminated by any other materials and, in particular, by any liquids. As a consequence, it was necessary that the flocculant be delivered in a pressurised bulk transport trailer. Without the pressurisation, the flocculant could not be unloaded from the tanker.

3 In or about July 1997, SNF purchased a bulk transport trailer registered 8WI 696 ("the tanker"). The tanker was fitted with its own compressor and compressor motor which pressurised the tanker.

4 The respondent, Wesfarmers Ltd ("Wesfarmers"), which was the second defendant in the proceedings, carried on the business of a transport contractor. Wesfarmers operated part of its transport business from a depot situated at Hopkins Street in Boulder. From that depot, it operated a fleet of trucks and trailers. For the purpose of maintaining its fleet, Wesfarmers had a number of employees who carried out mechanical work. These employees had limited skills. When specialist work was required, Wesfarmers would contract with specialist businesses for the purpose of having them effect certain repairs and maintenance.

5 One of the specialist businesses was conducted by Seeley, which carried on an automotive electrical business and was the third party in the proceedings. In the six months prior to the material date, Seeley had performed automotive electrical works in respect of various vehicles in Wesfarmers' fleet on an average of twice per week.

6 On or about 31 June 1998, SNF and Wesfarmers entered into a contract by which Wesfarmers agreed to transport and store shipments of flocculant using the tanker for and on behalf of SNF. For the purpose of making the delivery of flocculant using the tanker, Wesfarmers connected one of its prime movers to the tanker. The transport contract between SNF and Wesfarmers required Wesfarmers to service and maintain the tanker as required.

7 It was common ground that the contract was partly written and partly oral made between Mr Craven on the part of SNF and Mr Beresford on the part of Wesfarmers. Insofar as it was evidenced in writing, the contract was contained in the following documents, namely:

(a) a letter of submission of Wesfarmers to SNF dated 9 April 1998 (document No 05);

(b) a memorandum from Mr Beresford to employees of Wesfarmers dated 9 June 1998 (document No 07);

8 On 17 November 1998, a Mr Craven, an engineer employed by SNF attended at Wesfarmers' depot in Hopkins Street, Boulder where the tanker was parked. Craven inspected the tanker. The inspection revealed it had not been cleaned out adequately by Wesfarmers and that a quantity of cementlike material remained inside it. Mr Craven pointed this out to Wesfarmers' yard manager, Juan Agius, and informed him that the transport contract required the tanker to be clean prior to accepting delivery of the flocculant from SNF.

9 On 18 November 1998, Mr Craven returned to the Wesfarmers' depot to check the tanker and found that it had been washed out and left to dry with the aid of fans inside the tanker cavity. On 19 November 1998, Wesfarmers undertook a delivery of flocculant to Bulong where Mr Craven observed one side of the tanker being emptied. When it came time to empty the second side of the tanker, the necessary control valves were operated, but it was not possible to discharge the balance of the flocculant as water had got into it, which caused it to swell up and block the discharge tube. As a consequence, the delivery was stopped and the tanker returned to Wesfarmers' depot.

10 On 20 November 1998, Mr Craven attended at the Wesfarmers' depot and requested that the remaining flocculant be removed from the tanker and all associated pipework be removed and cleaned. Mr Craven also requested all control valves and the connecting rubber hoses be replaced, the tanker fully inspected and tested so that a further delivery could take place without incident.

11 On 25 November 1998, in the course of servicing and maintaining the tanker, Wesfarmers discovered that the starter motor fitted to the tanker's compressor motor appeared to have starting problems. As a result, Wesfarmers telephoned Mr Seeley and requested that Seeley provide the services of an auto electrician. Pursuant to that request, the appellant attended at Wesfarmers' depot and investigated faults with the starter motor on the tanker. He then returned to Seeley's premises and brought back to Wesfarmers' premises an exchange starter motor unit. He then fitted the unit to the air compressor motor. In the course of operating the engine on the tanker, the appellant suffered a "disability" as defined in s 5 of the Act when he was struck on the head by a steel air pressure pipe causing a fractured skull and associated injuries.

12 It was common ground that in accordance with the transport contract relating to the tanker, Wesfarmers was permitted by SNF to engage the services of third parties to effect necessary repairs as required, which were outside the experience and competence of its own employees. At the material time, Wesfarmers had no employees with suitable experience or competence to investigate an apparent fault in the starter motor.

13 It was also common ground that it was a term of the transport contract that SNF would pay any costs incurred by Wesfarmers which related to the maintenance, service and repair of the tanker.

14 Seeley issued an invoice in respect of the auto electrical work carried out by the appellant on 25 November 1998 to Wesfarmers in the sum of $385. On 18 December 1998, Wesfarmers issued an invoice, KA 0051, to SNF for the sum of $423.50 being an amount of $385 plus a 10 per cent administration charge totalling $423.50 for payment to Wesfarmers by SNF. SNF paid that amount to Wesfarmers.

15 For the purposes of the proceedings, it was an agreed fact that there had been no degree of permanent disability determined or agreed between the appellant and Seeley or Wesfarmers in accordance with s 93D of the Act. Neither Seeley nor Wesfarmers had been served with a form 23 Notice of Referral on a question of degree or disability by the appellant.

16 By an agreement between the appellant and Seeley, the appellant redeemed his workers' compensation claim pursuant to s 67(2) of the Act. There was a form 15D statement of the consequences of the recording of a memorandum of agreement signed by the appellant and dated 16 August 2000, together with a form 15B notice recording a memorandum of agreement under the Act which was issued dated 1 September 2000.

17 In the action in the District Court, the appellant claimed damages against SNF and Wesfarmers for the injuries suffered in the accident on 25 November 1998. Each of SNF and Wesfarmers contended that the appellant was precluded from pursuing the action on the ground that each of them was deemed to be his employer by virtue of s 175 of the Act.

18 On 24 July 2002, Viol DCJ ordered that the following questions be tried as preliminary questions before the trial of the action:

(1) whether SNF is deemed to be the appellant's employer for the purposes of division 2 of Part IV of the Act; and

(2) whether by reason of the operation of s 93E(13) of the Act, Mr Jones was precluded from obtaining an award of damages from SNF.

19 Viol DCJ ordered that the same questions be tried in respect of Wesfarmers.

20 Part IV Div 2 of the Act is headed "Constraints on awards of common law damages". By s 93B(1) , the division applies to the awarding of damages against a worker's employer independently of the Act in respect of a disability suffered by a worker if the disability was caused by the negligence or other tort of the worker's employer and compensation has been paid or is payable in respect of the disability under the Act, or would have been payable but for s 22. Section 22 of the Act disentitles the worker from an award of compensation in certain circumstances which have no application in the present case. Section 93B(4) provides that:

"A reference in this section to the worker's employer includes a reference to a person for whose acts the employer is vicariously liable."

"If the liability for an incapacity resulting from the disability has been redeemed under s 67, damages are not to be awarded in respect of the disability."

22 It was common ground before Martino DCJ that the answer to the first question determined the answer to the second question. Counsel for the appellant accepted that if a defendant was deemed to be the appellant's employer by s 175 of the Act, then, by reason of the decision of the Full Court in Hewitt v Benale Pty Ltd [2002] WASCA 163, the appellant would be precluded from pursuing his claim for damages against that defendant. It was agreed by counsel for both SNF and Wesfarmers before Martino DCJ that s 93E(13) of the Act would only preclude the appellant from obtaining an award of damages from a defendant if that defendant was the appellant's employer for the purposes of the Act.

23 The learned Judge held that in respect of each of SNF and Wesfarmers, the provisions of s 175(1) of the Act were satisfied. In the case of SNF, they were satisfied by the extension to the meaning of the words "principal" and "contractor" contained in s 175(6). The area of dispute for both SNF and Wesfarmers was whether they were deemed to be the appellant's employer having regard to the provisions of s 175(3) and s 175(7). In this respect, the learned Judge said:

"Section 175(3) requires that the work on which the worker was employed at the time of the occurrence of the disability was 'directly a part or process in the trade or business of the principal'. Counsel for the parties referred extensively to English authorities and to the decisions of the High Court in Moir v Schrader [1936] HCA 69; (1936) 56 CLR 310 and Frauenfelder v Reid & Ors [1963] HCA 3; (1963) 109 CLR 42. However there is a significant difference between the legislation considered in those cases and s 175(3) of the Workers' Compensation and Rehabilitation Act. In both the English legislation and the New South Wales legislation considered by the High Court, the work agreed to be carried out by the contractor was required to be 'in the course of or for the purposes of [the principal's] trade or business'. In my view, the words 'directly a part or process in the trade or business of the principal' import a closer connection between the work on which the worker was employed at the time of the occurrence [of the disability] and the principal's trade or business than that considered in the English cases and the High Court cases to which I was referred: Textron Pacific Ltd v Collector of Customs (Qld) (1987) 78 ALR 547; State Government Insurance Commission v Sinfein Pty Ltd (1996) 15 WAR 434; Container Handlers Pty Ltd v Insurance Commission of Western Australia [2001] WASCA 304; (2001) 25 WAR 42."

24 His Honour concluded that the maintenance and repair of the trailer used to deliver the flocculant was directly a part or process in the trade or business of both SNF, which agreed to supply and deliver flocculant to the project, and of Wesfarmers, which agreed to transport the flocculant to the project. For these reasons, his Honour concluded that the provisions of s 175(3) were satisfied in respect of both SNF and Wesfarmers.

25 The learned Judge also noted that the language of s 175(7) of the Act differed from the corresponding provisions in the English legislation. That legislation required that the accident occur "on, or in, or about premises on which the principal has undertaken to execute the work or which are otherwise under his control or management": see Andrews v Andrews (1908) 2 KB 567. The corresponding provision in the previous workers' compensation legislation in this State was similar to the English legislation: see s 16(7) of the Workers' Compensation and Rehabilitation Act 1912 (WA).

26 Section 175(7) of the present Act requires that the disability occurs "in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management". His Honour went on to say that the words "in respect of" had a wide meaning of connection "in relation between the two matters to which the words refer": Trustees Executors & Agency Co Ltd v Reilly [1941] VicLawRp 22; [1941] VLR 110; and Powers v Maher [1959] HCA 52; (1959) 103 CLR 478. His Honour concluded, therefore, that the words "in respect of" had a wider meaning than the words "on, or in, or about premises".

27 His Honour noted that the word "premises" was not defined in the Act, but pointed out that it is a word that had been used in worker's compensation legislation from the earliest times. The learned Judge went on to say:

"It has been held that a shipping vessel may be premises for the purposes of the legislation: Dittmar v Owners of Ship V593 [1909] 1 KB 389. The dictionary meaning of the word is a house or building with its grounds, or other appurtenances - Oxford English Dictionary. Counsel for SNF submitted that the trailer was premises for the purposes of the Workers' Compensation and Rehabilitation Act. However, I can see no basis on which the premises could extend to include the trailer. Counsel for SNF referred to the definition of premises in [the] Occupiers Liability Act 1985 which includes 'any vessel, vehicle or aircraft'. However, that definition does not apply to the Workers' Compensation and Rehabilitation Act and in my view the fact that the drafter of the Occupiers Liability Act found it necessary to extend the meaning of the word in that definition tends to support my conclusion that a trailer is not premises within the ordinary meaning of that word.

I concluded therefore that premises in the context of this accident means Wesfarmers' depot at Boulder. That depot was under Wesfarmers' control and management. Mr Jones' injuries were caused while he was working on those premises and in my view there is sufficient connection between the premises and the accident for Mr Jones' injuries to be in respect of those premises. I conclude therefore that s 175(7) applies to [Wesfarmers].

Having concluded that the trailer was not premises, I conclude that Mr Jones' injuries did not occur in respect of any premises of SNF."

28 His Honour concluded that the questions to be tried as preliminary issues should be answered as follows:

"(1) SNF is not deemed to be [the appellant's] employer for the purposes of Division 2 of Part IV of the Act;

(2) [The appellant] is not precluded by reason of the operation of s 93E(13) of the Workers' Compensation and Rehabilitation Act from obtaining an award of damages from SNF;

(3) Wesfarmers is deemed to be [the appellant's] employer for the purposes of Division 2 of Part IV of [the] Workers' Compensation and Rehabilitation Act;

(4) [The appellant] is precluded from obtaining an award of damages from Wesfarmers by the operation of s 93E(13) of the Workers' Compensation and Rehabilitation Act."

29 The appellant appeals against that decision on the single ground that the trial Judge erred in fact and law in holding that the appellant was a deemed employee of Wesfarmers and was precluded from obtaining an award of damages against it and should have found that:

(a) the electrical repairwork being carried out by the appellant was not directly a part or process of the trade or business of Wesfarmers; and

(b) in any event, there was no sufficient connection between the injury and Wesfarmers' premises so that it could be said that the disability suffered by the appellant occurred in respect of the premises on which Wesfarmers had undertaken to execute the electrical repairwork, with the result that the appellant was not a deemed employee of Wesfarmers and was not precluded from obtaining an award of damages against it.

30 It was submitted on behalf of the appellant that Wesfarmers would be deemed to be an employer of the appellant under s 175 if:

(a) it contracted with Seeley for the execution of the work which was carried out by the appellant as an employee of Seeley;

(b) the execution of the work caused a disability to the appellant in respect of premises on which Wesfarmers had undertaken to execute the work or were otherwise under its control of management; and

(c) the execution of the work carried out by the appellant at the time of the occurrence of the disability was directly a part or process in the trade or business of Wesfarmers.

31 So far as Wesfarmers is concerned, it was submitted on behalf of the appellant that while (a) may be satisfied, (b) and (c) would not be satisfied because in relation to (b) the words "in respect of premises" appearing in s 175(7) connote a connection between the disability and the premises which was not present on the facts in this case. Acceptance of this submission involves acceptance of the proposition that a disability that occurs on the premises by reason of something which happens on the premises is not a disability "in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management".

32 The ultimate question is whether, in the present circumstances, s 175 did or did not deem the appellant to be an employee of Wesfarmers. In my opinion, a liability "in respect of premises" includes a liability which arises in respect of something which happens on the premises, or arises otherwise in respect of the premises. A chattel may be "premises". Thus, a ship, which is a chattel constitutes premises: Dittmar v Owners of Ship V593 (1909) 1 KB 389. At all material times, the trailer was on Wesfarmers' premises. The accident occurred on SNF's trailer while it was on Wesfarmers' premises and under its control and management for the purposes of repair.

33 Counsel for the appellant accepted that Wesfarmers had contracted with Seeley for execution of the work carried out by the appellant as an employee of Seeley. It was submitted, however, that the execution of the work did not cause the appellant a disability "in respect of premises" on which Wesfarmers had undertaken to execute the work, or were otherwise under its control and management. This was said to be so because the words "in respect of premises" in s 175(7) require a causal connection between the disability and the premises, which was not present on the facts of this case. In other words, it was being submitted that there must be some causal connection between the disability and the state of the premises. It was also submitted that the execution of the work carried out by the applicant at the time of the occurrence of the disability was required to be directly a part of a process in the trade or business of Wesfarmers. To put it another way, there had to be some causal connection between the disability suffered by the worker and the premises, which required something more than that the disability was merely suffered on the premises of Wesfarmers.

34 It was submitted on behalf of the appellant that the words "in respect of" in s 175(7) connoted a relationship between the disability or injury and the premises at which the injury occurred which was more than just a temporal and spatial relationship. While it was conceded that the disability occurred at a location which was managed or controlled by Wesfarmers, the words "in respect of" connoted more than that. It was submitted that while the words were difficult to define, they had the widest possible meaning of any expression intended to convey some connection or relation between the two subject matters to which the words referred: The Trustees Executors & Agency Co Ltd v Reilly (supra) at 111 per Mann CJ; approved by Kitto J in Powers v Maher [1959] HCA 52; (1959) 103 CLR 478 at 485.

35 In Technical Products Pty Ltd v State Government Insurance Office (Qld) [1989] HCA 24; (1989) 167 CLR 45, s 3(1) of the Motor Vehicle Insurance Act 1936 (Qld) required the owner of a vehicle, while registered, to insure with the State Government Insurance Office against liability by way of damages "in respect of such motor vehicle" for accidental bodily injury to any person within Australia. It was held by the majority (Toohey J dissenting), that "in respect of such motor vehicle" added to the requirement that the injury be caused by, through or in connection with the motor vehicle. The further requirement that the circumstances giving rise to the legal liability for damages for the injury show a discernible and rational link between the liability and the particular motor vehicle.

36 In that case, the negligence of the employer in failing to provide a safe system of work was not a liability "in respect of" the trailer for the purposes of s 3(1). The trailer's only involvement in the employer's accident was that it was present passively as a receptacle. Brennan, Deane and Dawson JJ at 393 referred to Boath v Central Qld Meat Export Co Pty Ltd [1986] 1 Qd R 139 and said:

"The requirement that liability for an injury be 'in respect of' a motor vehicle is different from a requirement that the injury be 'caused by, through or in connection with the motor vehicle'. The first focuses upon the relationship between the relevant liability in damages and the vehicle. The second looks only to the relationship between the injury and the vehicle. The point is well made in the judgment of Connolly J (with whom Andrews CJ and Thomas J concurred) in the Full Court of the Supreme Court in the present case:

'If the liability of the respondent in this case is to be described as being in respect of the trailer, there must, in my opinion, be more than the mere presence of the trailer at the scene. As McPherson J observed in Tonga v John Holland (Construction) Pty Ltd & Ors ((Appeal No 16 of 1987) 3 July 1987, unreported), Stevens v Nudd [1978] Qd R 96 and Boath v Central Qld Meat Export Co Pty Ltd [1986] 1 Qd R 139 may be taken as establishing that it is not sufficient, in order to satisfy the requirement that the person be entitled to the benefit of the cover be 'legally liable ... in respect of such motor vehicle', that there be no more than a connection or relation in time or sequence between the motor vehicle and the events which in law give rise to the liability. What is required is that there be a relationship between the motor vehicle and the very act or omission which gives rise to that liability.'

Thus, the requisite relationship between liability and the particular motor vehicle will ordinarily not exist where the liability is that of a person who is unconnected with that vehicle. The point can be illustrated by example. If, for example, a passenger in a motor vehicle is injured when the driver of the vehicle brakes suddenly to avoid another vehicle whose brakes have failed because of a mechanic's negligence in servicing them, the passenger's injuries can properly be seen as caused 'in connection with' each of the two vehicles involved. Any liability of the mechanic in damages for the passenger's injuries would be a liability 'in respect of' the second vehicle whose brakes he had negligently serviced. The mechanic's liability could not, however, rationally be seen as a liability 'in respect of' the first vehicle with which he had no connection at all.

It follows that the appellant's primary argument should in our view be rejected. The effect of the words 'in respect of such motor vehicle' in s 3(1) is to add to the requirement that the relevant accidental bodily injury be 'caused by, through, or in connection with' the motor vehicle, the further requirement that the circumstances giving rise to the relevant legal liability by way of damages for that injury show a discernible and rational link between the liability and the particular vehicle. In most cases where the injury itself was 'caused by, through or in connection with' the relevant vehicle, that further requirement will, no doubt, be satisfied. There will, however, be cases in which the superimposed requirement will be critical in the sense that notwithstanding that the injury was 'caused by, through or in connection with' the insured motor vehicle, there is no discernible rational relationship between the relevant legal liability for the injury and that vehicle."

37 Their Honours concluded that there was nothing in that case which would justify a conclusion that the trailer and container had any involvement in the accident beyond their passive presence as the receptacle into which bags were being loaded. There was no permanent relationship between trailer and forklift of a type which could lead to the conclusion that the trailer and forklift were elements of a single unit of integrated equipment. The submission on behalf of Wesfarmers was that the relevant deeming provisions in s 175(3) applied where the work carried out by the appellant was directly a part or process in the trade or business of Wesfarmers as the principal. The relevant provisions applied not only where the work was carried out in the course of, or for the purposes of, the trade or business of the principal, but also when the work was of the particular type of work or activity undertaken by the trade or business: Moir v Schrader [1936] HCA 69; (1936) 56 CLR 310. In the same case, there was a distinction made between activities that constitute an integral, essential or component part of the particular business and those, although carried out for the purposes of the particular business, were ancillary or incidental or collateral to the main or central feature of the business. This was in contrast to the broader interpretation given to the equivalent deeming provisions in the case of the trade or business of a principal exemplified in Frauenfelder v Reed [1963] HCA 3; (1963) 109 CLR 42 and, in particular, the principle that the term "work undertaken by the principal" extends to any work the doing of which is part and parcel of the business undertaken by the principal.

38 Dawson J said at 178 that the words "in respect of" had a wide meaning, but required a relationship between the motor vehicle and the very act or omission which gives rise to the relevant liability.

39 The application of the same approach in the present context would require that there was a discernible or rational link between the liability and the premises of Wesfarmers. The trailer was literally on the premises of Wesfarmers. The trailer was in the care, custody and control of Wesfarmers at the relevant time. There is a question whether the trailer was itself premises. If it was, then the accident could be said to have occurred on the premises of SNF.

40 The expression "in respect of premises" is often used in such context as the subject matter of a licence, for example, where the licence is granted "in respect of" named premises: see, for example, Inklo Pty Ltd & Anor v Western Australian Hotels & Hospitality Association [2002] WASCA 5.

41 In Moir v Schrader (supra) at 320, Dixon J (as he then was) considered what his Honour described as "the very difficult provisions governing the liability for workers' compensation which persons who delegate work to independent contractors incur to employees of the latter."

"The provisions in force in New South Wales (sec.6(3) of the Workers' Compensation and Rehabilitation Act (1926-1929)) do not substantially differ from their British prototypes (sec.4) of the Workman's Compensation Act (1906).

An essential condition of the liability which is imposed upon the principal is that in the course of or for the purposes of his trade or business he should contract with the contractor for the execution by or under the contractor of the whole or a part of the work undertaken by the principal. The meaning of the expression 'work undertaken by the principal' has been the subject of much difference of opinion, but in England it appears to be settled that on the one hand it covers more than work which the principal himself has contracted with another party to carry out, and, on the other hand, it does not extend to all work done in the course of or for the purpose of the trade or business of the principal. 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 Johns & Co (1910) 2 KB at 910 per Farwell LJ). In the same case (at 912), Kennedy LJ 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. The application of this view of the provision is illustrated by the decision in the case. A syndicate formed for the purpose of conducting 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."

43 Dixon J also referred to the decision in Spiers v Elderslie Steamship Co Ltd [1909] SC 1259 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 its business. On the other hand, in Dittmar v Owners of Ship V593 (supra), coal merchants who, in the course of their trade, carried coal by 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, 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. The coal merchants had contracted for the execution of part of the work proper to their undertaking and in that sense it was undertaken by them: see per Cozens-Hardy MR at 396. In other words, 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.

"In this it differed from boiler-cleaning and from the operation of overhauling barges which, in Hayes v SJ Thompson & Co (1913) 6 BWCC 130, was held not to be part of the trade or business of barge owners but only work which arose out of it."

45 The relevant English provision in s 4 of the Workman's Compensation Act (1906) made it an essential condition of liability on the part of the principal that in the course of, or for the purposes of his trade or business, he should contract with a contractor for the execution by the contractor of the whole or part of the work undertaken by the principal. The words in s 175(1) of the Act in this State reflect the situation where the principal contracts with a contractor "for the execution of any work by or under the contractor".

46 In my opinion, the legislation is not susceptible of exact definition or of completely certain application for the reasons expressed by Dixon J in Moir v Schrader (supra) at 323 where his Honour said:

"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 of the work for the performance of which he has assumed responsibility, the work which he has 'undertaken'. But 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 and/or ancillary or incidental to them, then the workman must look to his direct employer for compensation."

47 It was submitted on behalf of the appellant that the transport contract between SNF and Wesfarmers made it clear that the business of both was the transportation of flocculant. While the transport contract cast an obligation on Wesfarmers to repair and maintain the tanker, it was submitted that this should be seen as a normal incident of a hire arrangement of this type of plant. The net effect of the arrangement was that SNF, as owner, retained financial responsibility for the maintenance and repair of the tanker in order to fulfil its transport contract. It was then submitted that it was not to be inferred from the terms of the transport contract between SNF and Wesfarmers that Wesfarmers had undertaken the maintenance and repair of the tanker as a part or process in its trade or business. This was said to be so because both SNF and Wesfarmers earned revenue from the transportation of flocculant, that was their trade or business in a direct sense. The maintenance of the plant and equipment necessary to carry out the undertaking was merely an incidental expense in the carrying out of their respective principal trade or businesses. By contrast, it was said that Seeley's trade or business and its income was derived from, among other things, the repair of automotive electrical equipment which was a specialist business. So far as it was contended on behalf of the appellant that the work upon which the appellant had been employed at the time of the occurrence of the disability was not "directly a part or process in the trade or business of the principal" ie, Wesfarmers within the meaning of s 175(3): cf Textron Pacific Ltd v Collector of Customs (Qld) (1987) 17 FCR 305. On this basis, it was submitted that the addition of the word "direct" in s 175(3) of the Act required the employee to be directly involved as a part or process of the trade or business of the principal as exemplified by a worker working under a labour hire contract as were each of the workers in Hewitt v Benale Pty Ltd (supra).

48 It was submitted that in this case there was no direct involvement as part of the process of the trade or business of Wesfarmers by Seeley and its employee because the fault in the starter motor was an ad hoc fault, not part of the normal maintenance or servicing of the truck. It was not something which could necessarily have been anticipated as something which Wesfarmers would need to "assume responsibility for" in the sense of incorporating it into their business operations.

49 In this context, Wesfarmers was a corporation in the business of transportation. For relevant purposes, Wesfarmers was required to maintain its fleet of trucks and trailers and from time to time would engage specialists to assist in that work. Seeley was contracted to provide the services of an auto electrician to perform electrical work on the bulk transport tanker. In this connection, Seeley was frequently required to undertake such work. The work carried out by the appellant was directly a part or process in the trade or business of Wesfarmers by reason, among others, that it was necessary for the compressor on the tanker to be operational in order to pressurise the tanker and thereby release the flocculant from the tanker in order to complete the contract for the transport of the flocculant to the site where it was required to be used.

50 So far as ground (a) was concerned, it was contended by the appellant that Wesfarmers' business was that of the transportation of flocculant for SNF. In my opinion, that was too narrow a description of the business. As was submitted on its behalf, Wesfarmers' relevant business was that of a transport contractor in the course of which it operated a fleet of trucks and trailers and a workshop and workforce to maintain them. The relevant vehicle was one of the fleet. The contract between Wesfarmers and SNF was one of a number of contracts entered into by Wesfarmers. It follows that the operation and maintenance of trucks and trailers, including the SNF trailer, was part of the process or trade of Wesfarmers. In my opinion, it follows that ground (a) which contended that the electrical repair work was not directly a part or process of the trade or business of Wesfarmers necessarily fails.

51 That leaves the question raised by ground (b) whether there was any sufficient connection between the injury and Wesfarmers' premises so that it could be said that the disability suffered by the appellant occurred "in respect of" the premises on which Wesfarmers had undertaken to execute

the electrical repair work with the consequence that the appellant was not a deemed employee of Wesfarmers and was not precluded from obtaining an award of damages against it.

52 In my opinion, the requirements of s 175(7) were satisfied because the premises on which the work was carried out were premises under the control or management of Wesfarmers. That was admitted in the agreed statement of facts in par 7. The business of Wesfarmers was the operation and maintenance of a fleet of trucks and trailers. The business was operated from the relevant premises at Boulder. It was while performing maintenance work, at the request of the respondent, and on a trailer under its control that the appellant suffered the relevant disability.

53 In my opinion, the decision of the learned trial Judge was clearly correct. The injuries suffered by the respondent occurred as a result of an accident suffered while fitting the relevant unit to the air compressor motor. He was accidentally struck on the head by a steel air pressure pipe causing him a fractured skull and associated injuries. In my view, it follows that, whether or not the trailer itself was regarded as "premises", the accident occurred on Wesfarmers' premises. The relevant premises were under the control and management of Wesfarmers and the work on which the appellant was engaged was directly a part or process in the trade or business of Wesfarmers. Hence, the appellant was deemed to be an employee of Wesfarmers.

54 For these reasons, I consider that the appeal should be dismissed.

55 PARKER J: I have had the advantage of reading the reasons now published by the Chief Justice with which I am in general agreement. The factual and legal issues have been identified in the reasons of the Chief Justice and I will not repeat them. I would merely wish to add the following observations on the two essential issues raised by this appeal.

56 I respectfully agree with the Chief Justice that the relevant business of Wesfarmers was that of a transport contractor. For the purposes of this business it operated a fleet of trucks and trailers and had workshop facilities and a workforce at its Boulder depot to maintain that fleet. The SNF trailer, although not owned by Wesfarmers, by agreement with SNF, was one of the fleet operated and maintained by Wesfarmers.

57 The evidence shows that it was a necessary attribute of the transport of flocculent for which the trailer was used by Wesfarmers, that it be transported under pressure. The trailer was equipped with a compressor for this reason. In the course of the maintenance of the trailer by

Wesfarmers the need to correct a faulty starter motor for the compressor was identified. While Wesfarmers called an automotive electrician to the depot, as was the practice, to attend to this particular task, it does not appear to me that in these circumstances this item of maintenance was thereby removed from the scope of the maintenance work of Wesfarmers on the fleet. Rather, what is demonstrated, is that in the course of its maintenance work on the fleet Wesfarmers chose to utilise the services of an automotive electrician, under contract, rather than its own workforce. It remained the case that what was being performed was an aspect of the maintenance of its fleet by Wesfarmers.

58 It follows, in my view, that the work being performed by the appellant at the time of the occurrence of the disability he suffered is properly to be seen as directly a part or process in the trade or business of Wesfarmers, within the meaning of s 175(3) of the Act.

59 With respect to the second issue raised by this appeal the phrase "In respect of premises" in s 175(7) is both imprecise and a departure from the words of the equivalent provision in the previous Act. Nothing has been advanced, or is apparent, to explain why the legislature would have intended by this change of language to narrow the scope of this provision. It seems more likely that some limited, but greater, measure of flexibility was intended, so as to lessen the scope for somewhat arbitratory outcomes which was the tendency of the previous provision. Even so, the change of language has not facilitated the task of applying this difficult aspect of the workers compensation legislation, and the imprecision of the phrase "In respect of" will continue to present difficulty.

60 For the purposes of deciding this case it is sufficient, in my view, to regard the relevant premises as the transport depot of Wesfarmers at Boulder, rather than the SNF trailer itself, as was submitted, leaving open the question of the trailer. So viewed, s 175(7) requires that there be a relationship or connection between the depot and the occurrence of the disability. I am not persuaded that to establish such a relationship or connection, the phrase "In respect of" should be construed so narrowly as to require that some attribute of the premises themselves was a causative factor of the disability. While that may well provide a sufficient connection or relationship in the circumstances of a particular case, the phrase "In respect of" suggests that other factors, perhaps different in nature, may be sufficient.

61 In this case there does appear to be a sufficient connection or relationship to satisfy the requirement of "In respect of" in s 175(7).

62 The premises were the transport depot which was under the control and management of Wesfarmers. From these premises Wesfarmers operated its transport business. At these premises Wesfarmers undertook the maintenance of the trucks and trailers it used in the business. Pursuant to a contract between Wesfarmers and his employer, the appellant attended the premises to perform an aspect of the maintenance of one of the trailers operated and maintained by Wesfarmers. While performing that task, on the trailer, at the premises, the appellant suffered the disability. He was injured by a component of the compressor fitted to the trailer.

63 It appears to me that there is demonstrated by these facts, a real connection or relationship between the premises and the disability. The premises were, relevantly, Wesfarmers Maintenance Depot and the appellant was injured at the depot while performing maintenance work for Wesfarmers on one of the fleet operated by Wesfarmers. That appears to me sufficient for the disability to be seen to have occurred in respect of premises under the control or management of Wesfarmers, within the meaning of s 175(7).

64 With these additional observations I respectfully agree, for the reasons given by the Chief Justice, that this appeal should be dismissed.

65 MCKECHNIE J: I agree with the reasons and conclusions of the Chief Justice. I add a comment in relation to the Workers Compensation & Rehabilitation Act s 175(7) and the expression "Where the disability does not occur in respect of premises ..." I would leave open the question of whether the trailer or a vehicle could ever be regarded as "premises".

66 As noted in Technical Products Pty Ltd v State Government Insurance Office [1989] HCA 24; (1989) 167 CLR 45, the words "in respect of" have a very wide meaning and also a chameleon-like quality in that they commonly reflect the context in which they appear. The question whether the disability is in respect of the premises is not entirely answered by a finding, in this case an admitted fact, that the premises are under the control and management of Wesfarmers. In Technical Products, Dawson J said at 394:

"The word 'in respect of' require some material connection between the two matters referred to. Those matters are liability for damages for accidental injury on the one hand and, on the other, a motor vehicle. Having regard to the immediate context of s 3(1), a mere coincidental or extraneous connection between

those two things can hardly be sufficient and the wider context of the Act takes the matter no further".

67 Adapting that reasoning to the present case, there must be a material connection between the disability and the depot. The Judge concluded (at [28]):

"... That depot was under Wesfarmers' control and management. Mr Jones' injuries were caused while he was working on those premises and in my view there is sufficient connection between the premises and the accident for Mr Jones' injuries to be in respect of those premises. ..."

68 In Boath v Central Qld Meat Export Co Pty Ltd [1986] 1 Qd R 139, Campbell CJ at 144 held that the plain meaning of the words "in respect of such motor vehicle" led to them having a significant limiting effect on the otherwise extreme width or ambit of the subsection.

69 If problems had arisen with the starter motor on the road to the Bulong Nickel Mine, then the disability would not have occurred in Wesfarmers' premises. Wesfarmers would therefore have no liability to the appellant under the Act.

70 The purpose of s 175 is to provide an extension of liability for an employee's disability to a principal who would not otherwise be regarded as an employer.

71 Paragraphs 175(3) and (7) provide limitations on the extent to which a principal is a deemed employer and the expression "in respect of premises" should be construed accordingly.

72 There must be a nexus between the premises and the disability. The nexus in the present case is provided by the fact that the trailer was being repaired at the workshop for the reasons given by Parker J.

Compensation and Rehabilitation Act 1981

Vehicle Insurance Act 1936

Compensation and Rehabilitation Act 1912

Jones v Wesfarmers Ltd [2003] WASCA 225

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (106 paragraphs)

Jones v Wesfarmers Ltd [2003] WASCA 225 (25 September 2003)

Parties

Legislation Cited (4)

Cases Cited (8)