Kovacic v Henley Arch Pty Ltd [2009] VSCA 56

2 I agree with Ashley JA that the appeal should be allowed, for the reasons stated by his Honour, and the application remitted for fresh consideration by a County Court judge upon the question whether the appellant sustained injury to his lower back in a lifting incident on or about 25 November 2003.

3 The appellant, Pero Kovacic, made application in the County Court for leave under s 134AB(16)(b) of the Accident Compensation Act 1985 ('the Act') to bring a proceeding for damages in respect of injury to his low back allegedly sustained whilst working for the respondent, Henley Arch Pty Ltd ('Henley') on or about 25 November 2003. His application was heard in November 2007 and February 2008. On 3 April 2008 the learned judge dismissed it. The judge found that the appellant had not established that, at the critical time, he was a 'worker' in the primary sense. He had established, in reliance upon the combined effect of s 8 of the Act and paragraph (b) of the definition of 'worker' in s 5, that he was a 'worker' in the extended sense. But that did not avail him, because he had failed to establish that the serious injury to his back from which he admittedly suffered was caused or materially contributed to by the incident upon which he relied. Specifically, the judge was not satisfied that any such incident had occurred.

4 This appeal, brought without necessity for leave by reason of s 134AC of the

Act, is authorised by s 74 of the County Court Act. It is not, upon the critical questions, an appeal to which s 134AD of the Act applies. That is, the issue is not one of this Court deciding for itself 'whether the injury is a serious injury.' Rather, the appeal concerns antecedent questions - whether the appellant sufficiently established that he was a worker, in the primary or extended sense; and whether he suffered compensable injury as alleged. The appeal is thus governed by s 74(3) of the County Court Act. The nature of an appeal of that kind was briefly addressed by the High Court in Dwyer v Calco Timbers Limited,[1] and extensively by that Court in a line of cases culminating in Fox & Percy[2] and CSR Limited v Della Maddalena.[3]

The appellant was not a worker in the primary sense

5 The following paragraphs in his Honour's reasons set the framework for his determination of the question whether the appellant had established that he was a 'worker' in the primary sense, and also provided most of the material bearing upon the possible application of sections 8 or 9.

1. The defendant is a fifty-year-old bricklayer, having been born on the 24th October 1957, in Croatia. He learnt his trade there, and after completing his army service in 1978, he commenced work in that country as a sub-contracting bricklayer to various builders. The plaintiff and his family became refugees in the civil war that broke out in Yugoslavia in 1991, and in November 2000, he came to this country and commenced English language lessons, which lasted for about three months, but the plaintiff's English is poor and he required an interpreter when giving his evidence. The plaintiff was accompanied to this country by his family, consisting of his wife, three sons (all now in their twenties) and two daughters (who are also in their twenties).
2. The plaintiff's first work in this country was for an entity known as Paul Virag Bricklaying. .... The plaintiff said he worked as part of a bricklaying team with his son, Zoran, as well as his son-in-law, Nenad Ostojic. He said that when he started working for Paul Virag he was told that he would have to register and obtain an ABN number, and he said that as a result of this he registered himself as a business and obtained an ABN number. ... he said that all monies paid to him by Virag were made by reference to his ABN number and business name. He said Zoran and Nenad also had ABN numbers and were paid under their ABN numbers by Virag. He said the money he received from Virag was paid into a bank account which was in the name of himself and his wife ... [T]he plaintiff said that when he was working for Virag, it was on jobs for the defendant, Henley Homes, and he said that whilst doing this work for Virag, neither he nor anyone 'on the team' received payment or allowance for holiday pay, sick leave, superannuation or any other benefits. He said whilst doing this work he did not advertise for work or look for work for other builders, had no business cards for himself (or the team) and never had an entry in the Yellow Pages and had no business or other name on his work vehicle. He said when Virag had no work for him he worked for other people from time to time but this was a very limited amount of his total work activity. He said that whilst doing other work during this period, he did work for an entity known as 'Moonlight Homes'. He said this job was offered to his son, Zoran, because Moonlight Homes had built a home for Zoran and for this job the price of the bricklaying work was paid in one lump sum for the whole team.
3. [T]he plaintiff said that we 'had been working on the Moonlight bricklaying work' and when it rained they took shelter in a house next door which was one built by the defendant. He said whilst sheltering from the rain, he was spoken to by Mr Kim Messenger, who he believed was associated with the defendant, and that Messenger spoke to his other son, Goran, who apparently could speak English better than the others, and Messenger asked if 'we' would like to work for Henley directly rather than for Virag on Henley's houses.' He said we were told that we would earn better money, and after a discussion amongst themselves, 'we agreed to start working as a team for Henley'.' He said at that stage the team consisted of himself, Goran and his son-in-law, Nenad. 'He said Zoran continued to work on for Virag for a few months and then joined 'our team' after that.
4. The plaintiff said ... that the defendant was in the business of designing, advertising, constructing and selling one and two storey houses.' The plaintiff said that his team worked as bricklayers for Henley, who would provide a plan for the house that was to be worked on and a total job price for the bricklaying was marked on the plan.
5. The plaintiff said that the hours worked for Henley were 'normal tradesmen's hours' although on several occasions Henley would tell us that a particular job was urgent and if necessary the team would work longer daily hours and on weekends to finish the particular house.' The plaintiff said that the bricklaying work was carried out to the design specification standard as required by Henley. He said the quality of the team's work was good and they did not need much supervision, but the work was in fact supervised and inspected by Henley's supervisors who would attend the site at times once a day or every two or three days. He said that if the inspector was not satisfied with any particular work, they would be required to rectify it and a 'repair diary' was kept: (see paragraphs 8, 9 and 10 of the plaintiff's said affidavit). ... [T]he plaintiff said that if they were asked to do repair work or 'change work' that had been done by other bricklayers, they were paid at the rate of $30 per hour per bricklayer for the work. Any rectification work required by Henley would be done by the team without charge. He said that apart from this, payment was at a rate of per 1000 bricks laid with a differential for bricks above the upper floor level. For single storey residences, the payment was made when the brickwork was completed, and for two-level residences, payment was made initially on completion of the lower or ground-level work and then a second payment made after completion of the second storey work. He said that Henley required that there be one invoice per construction site for single-level houses and two invoices for double-level houses. He said that Henley did not want individual invoices from each bricklayer and so he put in the invoice for the work, and on occasion they were given a bonus, which was set by Henley. The plaintiff said that 'the team', which consisted of himself, Goran and Nenad, and after a while his other son, Zoran, 'shared the services of a labourer, and occasionally other bricklayers were brought in to assist the team.' He said that the labourer and any other contract bricklayer was paid out from the total sum received on any given invoice. He said the cost of concrete and any other occasional and incidental expenses were deducted from the amount he received from Henley and the balance was divided up between the team members ... The plaintiff said that at no stage was there any written agreement or memorandum between Henley and himself or any of the members of the team.
6. The plaintiff said that during the period from approximately July 2002 until approximately July 2004, the team made itself available for Henley's work as and when Henley wanted the work done, and at all times Henley provided the major amount of work for the plaintiff and his team. ... [T]he plaintiff said 'myself and the team would do work for other people only in circumstances when Henley had a drop off in its bricklaying requirements and no work was available'. He said at times when Henley's work did not require the whole team, he kept working for Henley while others went off and did other work, but this was rare. He said work for other persons was mainly at weekends, but other work only amounted for about ten per cent. He said that he did not knock back any work from Henley, and throughout the time that they worked for Henley, he did not advertise for any other business, have business cards printed or hold himself out as being available for other work. He said that throughout, he and his team worked from site to site as directed by Henley so as to fit in with its construction schedules. He said that materials such as bricks, sand, ties and cement were provided by Henley, but at some stage Henley required 'its bricklayers' to provide their own cement and sand. He said that he and his team provided their own tools and equipment such as trowels, a cement mixer and a brick cutter. He said 'other equipment, if needed, was hired by myself or anyone on the team and the cost was taken out of the total amount received from Henley'. He said as far as the scaffolding was concerned, Henley arranged for it to be supplied and erected and dismantled. ... The plaintiff had his own utility vehicle.
7. The plaintiff said there was no discussion about insurance and Henley did not request or require any to be taken out, and he said that if something went wrong on the site or damage occurred, it was Henley's responsibility. However, as stated above, any faulty work performed by the plaintiff or 'the team' had to be rectified at their expense.
8. As far as payments to the team were concerned, the plaintiff said that after deducting all expenses, including the wages of the labourer, and on occasion to other contractors, the balance of the money was divided amongst the team according to the actual number of days the member had worked on a particular job. He said that as far as the team was concerned, they had no partnership agreement and simply regarded each other as part of the team.

6 His Honour balanced-out the circumstances as he had described them - I interpolate that it is quite apparent that he acted upon the reliability of the appellant's evidence - as follows:

1. Using the multi-factual method, it seems to me that the various indicia which point to a contract of services as distinct from a contract of service in this case are as follows:

(1) The plaintiff was paid on a rate applicable to 1000 bricks laid rather than an hourly rate.

(2) The plaintiff decided how the money was to be split up between he and his partners, depending on how many hours of work each one had put into a particular job.

(3) The plaintiff and or his partners did not receive any holiday pay, sick pay, superannuation contributions or the like.

(4) The plaintiff and his partners provided their own tools of trade, including trowels, spirit levels, a cement mixer, a brick cutter, a utility truck and other impedimenta of the bricklayer's trade as well as cement and sand. Needless to say, the plaintiff claimed depreciation in his tax returns on his equipment.

(5) The plaintiff and his partners were free to do other work, and in fact did other work for other builders.

(6) The plaintiff had his own tax file number and business number and claimed various deductions in his and the partnership's income taxation returns in relation to the business they conducted. The plaintiff engaged an accountant to give him advice and prepare the taxation returns for himself and the partnership.

(7) The plaintiff and his partners exercised their own skill and judgment in the brickwork that they erected for the defendant, although overall supervision was carried out by an officer of the defendant company to ensure that the work that the plaintiff and his partners did met the desired standard.

(8) The plaintiff and his partners were not provided with any uniform or clothing by the defendant which bore any logo or identification of the defendant to suggest that they were in some way employed by the defendant.

(9) The plaintiff and his partners employed labourers to assist them in their work and paid the labourers out of the money that they received from the defendant. From time to time they hired other bricklayers to assist them in their work.

1. Relevant factors which indicate that the plaintiff and his partners were working under a contract of service with the defendant (and hence 'workers' under s.5 of the Act) include the following:

(1) The defendant determined the order and timing of the work to fit in with its overall construction program.

(2) The plaintiff and his partners were required to be on site at the same time as the other tradesmen engaged by the defendant.

(3) The defendant provided scaffolding for the plaintiff and his partners to perform work, although on occasion the plaintiff and his partners were obliged to pay the defendant for use of the scaffolding if they required it at times other than that which fitted in with the defendant's schedule.

(4) The plaintiff and his partner's work was inspected by the defendant to see it was of an appropriate quality. However, if not, the plaintiff was required to rectify any work which did not come up to standard at his own expense.

(5) The plaintiff and his partners did not advertise in the Yellow Pages or elsewhere for work, but regarded the defendant as their main 'client' who had first call on their services.

(6) The plaintiff and his partners had no interest in the profit and any losses of the sale of the houses they helped build.

1. When considering all of these matters, it seems to me that the balance is in favour of a finding that at all relevant times the plaintiff was engaged, as far as the defendant was concerned, in a contract for the provision of services, and hence he could not be said to have been a 'worker' under s.5 of the Act. In my view, the factor which weighs most heavily against the plaintiff being a worker is that he and his partners engaged other workers to perform services for them in carrying out their work for the defendant. The fact that the plaintiff engaged an accountant or his wife to help with the books is not to the point but labourers and other bricklayers are. It seems to me that it is impossible for a person who employs another to then turn around and describe himself as a 'worker'. He is not a worker, he is an employer engaged in his own business.
2. In fact, [senior counsel for the plaintiff] could not refer me to any reported case wherein a person who claimed to be a 'worker' had in fact employed other workers to help in carrying out the services he was performing for someone else but was nevertheless held to be a 'worker'.

7 There is an obvious error in the opening part of paragraph 22. No doubt his Honour intended to refer to a contract for services. Nothing turns on it.

8 A number of the circumstances identified by his Honour as tending in favour of a contract for services were, I think, equivocal. That observation applies with respect to the circumstances mentioned in sub-paragraphs (1), (3) and (7), and to an extent the matters mentioned in sub-paragraphs (4) and (5) of paragraph 21. On the other hand, the circumstances mentioned in sub-paragraphs (2), (6), (8) and (9) did tend in favour of the appellant being engaged under a contract for services.

9 Each of the circumstances identified by the judge at paragraph 23 of his reasons did tend, I consider, in favour of the relationship being one of contract of service.

10 In my opinion, no error[4] was demonstrated in judge's resolution of the issue, which required a balancing out of circumstances which pulled in different directions. But for two matters, I would have been of contrary opinion. First, I agree with his Honour that the fact that a labourer[5] was employed to assist in work done by 'the team', and was paid out of the moneys received from Henley, very strongly (if not decisively) told against the appellant's engagement being pursuant to a contract of service. Second, on any job the various members of the team apparently came and went at their discretion. This seems likely to have been the situation with the appellant. Mr Messenger, a construction manager employed by Henley, made a statement to that effect. Ms Demetriou, Henley's customer service manager, stated that the appellant 'was actually working' in December 2003 at a time when, on his account, he was incapacitated and off work. The likely explanation, I think, is that the team, but not the appellant, was working at the relevant time.

11 Upon the question whether the appellant established that he was a worker in the primary sense at the critical time, I add one observation. Conceivably, although there would be difficulties in arriving at such a conclusion in the present case, the circumstances might have been analysed to be that, at the time when he sustained the alleged injury, the appellant was undertaking a contract of service in respect of the particular task then being performed, in addition to there being a subsisting bricklaying contract for services. Such an analysis, however, was not addressed in argument in the County Court or in this Court. I put it to one side.

12 On the hearing of the appeal, counsel for the appellant did not abandon a challenge to the judge's conclusion that his client had failed to establish that he had been engaged under a contract of service at the time of the alleged incident. But he scarcely pressed the contrary, mainly arguing that his client had been protected by s 8. In my opinion, that approach - which also effectively abandoned reliance upon s 9 of the Act - was correct in its focus.

The appellant was rightly deemed to be working under a contract of service at the relevant time

13 Concerning s 8(1) of the Act, debate centred below upon the question whether, assuming that the appellant suffered injury whilst assisting to lift a large steel lintel on or about 25 November 2003, this was work 'incidental to' his (for these purposes, assumed) trade as a bricklayer. The judge held that he 'should accept [the submission of counsel for the appellant] that lifting of lintels such as this was not part of the ordinary work of a bricklayer'. In so concluding his Honour accepted the submission that a crane was ordinarily provided by the builder to lift large lintels such as the appellant said he was assisting to lift when he sustained injury.

14 In this Court, by Notice of Contention, the respondent sought to challenge that conclusion.

15 There is, however, an antecedent question: was the appellant regularly carrying on a trade or business as a bricklayer in his name or under a firm or business name (conveniently, 'a trade regularly carried on') as at November 2003? That question was not debated below. There was, however, much evidence which permitted it to be answered; and aspects of the evidence were emphasised by one or other party when I raised the issue on the hearing of the appeal.

The framework of Section 8

16 Section 8 of the Act is the successor to s 3(6) of the Workers Compensation Act 1958. It is similar to, but not identical with, s 6(3A) of the now repealed Workers Compensation Act 1926 (NSW),[6] and s 6(3) of the Workmen's Compensation Ordinance 1951 (ACT). There has been much litigation concerning these various provisions. But I think that not all potential problems have been resolved. One reason is that superior courts have been somewhat inhibited in their consideration of the legislation - either because appeal has been limited to a question of law, or else because 'appeal' has been by way of the case stated procedure.

17 Section 8, like its predecessor and comparable provisions, uses language which is imprecise. It conveys an idea, which the Courts have attempted to explain. The reasons for judgment of Dixon J in Humberstone v Northern Timber Mills[7] represent, by common consent, the best attempt to clothe the idea. His Honour said:

... a consideration of the policy of the provision as well as of its text appears to me to show that the distinction it seeks to draw is between on the one hand an independent contractor whose relation with the principal is special or particular either because it is outside the course of the general business of the contractor or the general practice of his trade or because he has no such general business or is not a general practitioner of his trade, and on the other hand an independent contractor who performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so.

(1) The principal must carry on a trade or business, and the pertinent contract must be entered into in the course of and for the purposes of that trade or business.

(2) The contract between the principal and the contractor must be a contract for services.

(3) As a corollary of (2), the focus must be upon the particular contract under which work is being performed at the time of injury. It is immaterial that there is a subsisting contract for services between A and B in respect of particular work - which in the case of A is entered into in the course of and for the purposes of a trade or business carried on by A, and by which B agrees to perform work in the course of a trade regularly carried on - if the contract being performed at time of injury is a contract of service between A and B. That was held to be the situation in Victorian Work Cover Authority v Game.[8]

(4) Contracts may be in writing, or informal. There may be a continuing contract, or one party may make a continuing offer which is accepted from time to time so as to give rise to a series of contracts. In every case, the meaning and effect of a pertinent contract must be determined at the time it is entered into.

(5) Section 8(1) deems a contractor who has entered into a contract for services to be working under a contract of service in certain situations. By paragraph (b) of the definition of 'worker' in s 5(1), such a person is defined to be a worker. By s 8(1), the principal is deemed to be the employer.

(6) A contractor is denied the protection of s 8(1) if, being a person who regularly carries on a trade, he or she sustains injury when performing work in pursuance of a contract by which the contractor agrees to perform work for a principal in the course of or incidental to the contractor's trade.

(7) To the contrary, if the contract for services is one under or by which the contractor agrees to perform work which is not incidental to a trade regularly carried on, the contractor is deemed to be working under a contract of service at the critical time.

(8) A contract is not denied the protection described in (7) -

(a) only because the contractor is a partnership;[9]

(b) where, in the performance of the work, the contractor although employing workers actually performs some part of the work personally.[10]

(9) In deciding whether, when the pertinent contract was entered into, a contractor regularly carried on a trade, authorities disclose the following propositions:

(a) If a relationship of principal and contractor is special as between the parties, the contractor will not be adjudged to be regularly carrying on a trade or business. The relationship will be special, or particular, in either of the two situations described by Dixon J in Humberstone v Northern Timber Mills.[11]

(b) Where a contractor's trade is limited to a single customer and there is no holding out of willingness to undertake such trade generally, the contractor does not lose the protection of the section.[12]

(c) A contractor is not excluded from the protection of the section only because, although working for a single principal, and although not holding himself or herself out as being prepared to contract with others, the contractor retains the right to so hold himself or herself out.[13]

(d) If a contractor carries on a trade which falls within the description of the words of exception in s 8(1), it is not necessary that the contractor also hold himself or herself out to the public as carrying on such a trade. There is 'no separate element required ... of holding out.'[14]

19 The question whether, under a pertinent contract, the contractor has agreed to perform work which is not incidental to a trade or business regularly carried on, has been addressed on some occasions.

20 In Humberstone, Dixon J stated that the predecessor to s 8(1) protects persons who do not, in the course of an independent trade or business -

as an incident of its exercise, undertake the work by entering the contract.[15]

21 Rissman v Manning[16] was a decision of the Victorian Workers' Compensation Board. Judge Stretton, a judge of formidable reputation in the area of workers compensation law, presided.

22 The applicant carried on a regular business as a boring contractor. He was also an agent for the sale of windmills. He contracted to put down a bore for a grazier. Either as a variation of the contract, or as a separate contract, he agreed to sell the grazier a windmill, and to erect it. He was injured whilst erecting the windmill. The Board held that he was not then performing a contract which was incidental to his business. It said this:

In common modern parlance it [that is, incidental to] has the character of being descriptive of something occurring with some appreciable degree of frequency, that frequency being such as to invest the so occurring fact with the appearance at least of an inherent relationship with the thing to which it is incidental; and bearing, in result, the appearance at least of something which is inherently or causally connected with the dominant concept with which it is adjectivally associated. The dictionary closely relates its meaning to 'accidental'. But in modern usage the two words, though not being accepted as antonymous, are given something of the character of imperfect opposites. Those meanings have been adopted by some logicians. Present day usage speaks of incidental music in a play in the sense above suggested. It would distinguish as something of an opposite nature an accidental noise happening in the course of a play. Speaking as an observer of external appearances, one feels that the incidental is something which one may expect to happen in relationship with something else; and that the accident is of the nature of the unexpected and unrelated. A meaning very close to that which the Board adopts was given it by certain of the learned Judges of the High Court in Humberstone v Northern Timber Mills, where Latham CJ construes the phrase 'not being work incidental to a business' as meaning not being work belonging to a business.

In my respectful opinion, that was a useful analysis of the meaning of the words 'incidental to' in s 8(1). It is an analysis which should be capable of practical application.

23 I turn to another question which may arise in the context of a s 8 enquiry. Is it possible that, within one contract, a contractor may agree to perform both work [in the course of or] incidental to a trade and work not so incidental? If yes, what is the consequence for the application of the section?

24 In Rissman, one of the alternative analyses was that there was a single contract which contained those two components. The contractor was injured whilst undertaking 'non-incidental work', and so he was held to be protected.

25 Accident Commission v Monks[17] was a decision to similar effect. The Accident Compensation Tribunal[18] held that there could be the two components within the same contract.

26 It seems to me that such a conclusion is both compatible with the legislation and with common sense.

27 I begin with the legislation. The only call for the application of s 8 is the occurrence of injury. It is in that context that the contractor may be deemed to have been working under a contract of service. If, at time of injury, the contractor is engaged in a contractual task which is not incidental to a trade regularly carried on, albeit that the contract also requires the performance of tasks in pursuit of that trade and incidental thereto, it does no violence to the provision to conclude that the contractor was working under a contract of service at the critical time. Bear in mind the fact that s 8(1) does not lead to the contract being deemed to be a contract of service. It is concerned with a snapshot in time.

28 In fact, a formal contract for the performance of work by a contractor both in pursuit of a regularly carried on trade, and of a kind not incidental thereto, is likely to be a rare bird. Most often, if there is a contract for the performance of work in pursuit of a contractor's regularly carried on trade, the non-incidental work will just present itself, and will be performed. That is likely to raise the 'one contract' issue, although it may be that in some cases of that kind the facts will justify a conclusion that the non-incidental work was performed pursuant to a separate contract of service.

29 As for common sense, it would be odd, except if the legislation compelled it, to differentiate between the two following situations: first, one in which a contractor entered into two contracts with a principal, under one of which the contractor plainly undertook to perform work incidental to a trade or business, and under the other of which the contractor agreed to perform work which was plainly not so incidental; and second, a case in which the contractor agreed, by the one contract, to perform work of those different kinds. Why should the contractor have the protection of s 8 in the former case, but not in the latter, if he or she suffers injury when undertaking work which is not incidental to the trade or business? It would not follow, of course, that by a contractor agreeing to perform non-incidental work it was thereby rendered incidental.

The appellant regularly carried on a trade as a bricklaying contractor

30 As I said earlier, the question whether in November 2003 the appellant regularly carried on a trade as a bricklaying contractor was not agitated at trial. But it was debated on the appeal. Whilst the question need not be finally decided, I think on balance that he did so.

31 The starting point is that the judge below was not wrong to hold that the appellant's bricklaying contract with Henley was a contract for services. The focus then falls upon the concept of 'a trade regularly carried on'.

32 Evidently, for a period of years commencing in about 2001 and concluding in mid 2004, the appellant engaged in bricklaying work pursuant to informal contracts which had much the same features as the informal contract with the respondent which was operative in November 2003. Work was done by the family 'team', though not always the same family members. Whilst invoices were prepared in different names from time to time, any changes seem to have been more apparent than real - for the appellant appears to have been always at the centre of affairs.

33 Pointing in favour of the appellant's relationship with the respondent having been special, or particular, the evidence showed that (1) most of the work undertaken by 'the team' was done for the respondent between mid 2002 and December 2003 (and, indeed, up until July 2004); (2) work was done for others only when work with the respondent dropped off, or at weekends; (3) the appellant[19] had no business cards, no Yellow Pages entry and did not otherwise advertise for work; (4) there was no individual or partnership name affixed to the work utility; (5) beyond the utility and a cement mixer, the team only provided tools of trade.

34 On the other hand, the appellant's contractual arrangements with Henley were similar to, though not identical with, the appellant's earlier arrangements with Paul Virag Bricklaying; and it is the fact that the appellant performed work for others, apparently on a similar basis, during the currency of the relationship with Henley.

35 The appellant described the extent of the other work which he or the family members comprising 'the team' did in his affidavit sworn 9 December 2005:

1. From August 2002 I worked for Henley Properties Group ... almost exclusively ...

36 Then, in an affidavit sworn 15 May 2006, he swore that he 'worked exclusively' for Henley from about July 2002.

37 He corrected the assertion that he had worked 'exclusively' with the respondent in an affidavit sworn 7 December 2007.

38 In the last-mentioned affidavit, he deposed that -

1. Throughout the period after approximately July 2002 and right through until approximately July 2004, the team made itself available to work for Henley on Henley work as and when Henley wanted work done. At all times Henley was very much the major work provider for myself and the team. The system was always such that we worked when and where Henley required work to be done. Myself and the team had a system of work the purpose of which was to accommodate Henley's ongoing schedule of work.
2. Myself and the team would do work for other people only in circumstances where Henley had a drop off in its bricklaying requirements and no work was available. Alternatively, and if there was just a downturn in work which could not keep all brick workers actively engaged, I would stay with the men who would continue to work for Henley whilst others went off and did other work. This happened rarely. As well, when there was non Henley work it was mainly at week-ends, or sometimes, when a Henley job could not be started in circumstances such as when bricks had not been delivered. I would estimate work other than for Henley at about 10% of the total invoice value and of work other than for Henley I would estimate that about 80% of it was done on week-ends, with the balance done in between Henley work in circumstances of downturn or delay by Henley.

39 In re-examination, the appellant gave this evidence:

Just in a general picture, if I can ask you this. Between July of 2003 and December of 2003, it is clear from the affidavit that you were working for Henley, is that right? - - - Yes, we worked for Henleys yes.

Are you able in your own assessment give some percentage or some sort of measure of any work that was done for anyone else during that period? - - - Eighty to 90 per cent we worked for Henleys.

Can I take you for the period - it is after November 2003 when you went to the doctor and right up until July 2004 were you and the team continuing to work for Henley? - - - Yes.

Are you able again to indicate in your best assessment about what percentage of the work you and the team were doing for Henley? - - - For sure 90 per cent.

40 Zoran Kovacic, the appellant's son, by affidavit sworn 7 December 2007, deposed that -

1. In about September 2003 we did the bricklaying on a house for Como Constructions during a period when Henley had no work for us to do. Goran arranged that work. I understood that Como wanted us to keep working on its other homes, but we were told by Henley that it had work again so we just went back to Henley. I thought of Henley work as our regular job and we wanted to keep doing its work. I preferred to keep working for Henley as the pay arrangements were better and they had ongoing regular work which meant we did not have to bother looking for work anywhere.
2. We did some other bricklaying work when we worked for Henley. We were contacted by Nova Homes. We met the owner of Nova on site when we worked for Moonlight Homes. I think this work with Nova was arranged through Nenad and our sister, Zoranka. We did a couple of houses for them on a one off basis, but we made sure that this work did not interfere with the work we were doing for Henley, which we considered to be our job and which we worked on each week day that work was ready to be done. When doing non Henley work and if there was some overlap in the work, we could work out of hours and on week-ends, or when we had spare time from our Henley work (which occurred as we were usually faster than expected and occasionally did not need everyone on site). We also did bricklaying work on a couple of houses for Burbank Homes on a one off basis. This was because our former Henley supervisor went to work for Burbank in 2004. He needed some extra bricklayers so we agreed to do the work but only when we had quiet periods with Henley coming up.
3. Apart from the Como job, and the few jobs which were offered to us, we only worked on Henley houses. We did not advertise as a team or individually. I only owned minimal equipment like a trowel. One team member would provide a cement mixer for all of us to use. Anyone who owned and used their equipment could make their own tax arrangements for it. I did not have my name on a vehicle or use any signage. I did not seek work elsewhere, except for the one occasion when I saw the Como Construction vehicle on site. I was happy to work exclusively for Henley. It was only when Henley told us it did not have enough work coming up that we took the offers of a couple of other jobs. The Henley work made up the vast bulk of our income and work time, and we would have done it all the time if work was continuously provided. In the two years from mid 2002 to mid 2004 I believe we would have done the bricklaying on about 40 Henley homes. I cannot be exact as Nenad Ostojic had the diaries for the period when he and his wife, Zoranka did the invoicing. They have gone overseas and we cannot locate the diaries. Within the team none of us was the boss of the other. We just worked together and did what our Henley supervisor told us to do overall. For the sake of convenience, and at the request of Henley, I did not have personal accident insurance for the work I did. I always assumed that, because we were working for Henley, they would cover those things if anything went wrong we were working on its houses.

41 Goran Kovacic by affidavit sworn 30 November 2007, deposed that -

1. On occasion I was told by the Henley supervisor that there was no work for us to move onto. On one of these occasions, just before we finished our current Henley job, I saw a supervisor for Como Constructions and stopped to ask if any work was needed. That was in about September 2003. Como gave us that job and we did it straight away. During this period Henley said it had no work for us. Como Constructions wanted us to keep working on its other homes, but we said no. This was because Henley had work again, so we just went back to Henley as we considered it to be our regular job and we wanted to keep doing its work.
2. There was other bricklaying work done when we worked for Henley. We were contacted by Nova Homes as the owner had met us on site when we worked for Moonlight. I think this was arranged through Nenad, and our sister, Zoranka. We did a couple of houses for them on a one off basis, but we made sure that this work did not interfere with the work we were doing for Henley, which we considered to be our job and which we worked for Henley on each week day when Henley had work to be done. With non Henley work and if there was some overlap in the work, we would do non Henley work out of hours, on weekends, or when we had spare time from our Henley work. This 'spare time' occurred because our team could work faster than Henley's work set time schedule so that on occasion some members of the team could go and do alternative work whilst the balance of the team worked on with completing the Henley job. We also did bricklaying work on a couple of houses for Burbank Homes on a one off basis. This was because our former Henley supervisor was working for Burbank in 2004 and needed some extra bricklayers, so we agreed to do the work but only when we had quiet periods with Henley coming up.

42 The evidence about work done for Burbank Homes seems to have related to work done in 2004 - that is, after the appellant had suffered his alleged injury. The question being whether the appellant was regularly carrying on a trade as a bricklaying contractor in November 2003, such evidence would arguably be of lesser significance.

43 It is, in all, clear that the appellant's bricklaying contracts were not confined to contracts with Henley after July 2002. Albeit that the appellant and other members of the team worked largely on Henley projects, and would have been happy to work for Henley alone if work had always been available, there were times when work was unavailable, and as well weekends, when other work was taken on.

44 I do not consider that a relationship could only be special if the contractor performed work for one principal and one principal alone. I would accept that a relationship might still be special if, in unusual circumstances, a contract or contracts were made by the contractor with another principal or principals. The issue should be seen as one of fact and degree. In this case, my tentative conclusion is that the appellant should be viewed as regularly carrying on a trade as a bricklaying contractor as at November 2003.

45 The fact that the appellant did not advertise or otherwise seek out work is not inconsistent with such a conclusion. Not only is holding out not a necessary pre-requisite for a conclusion that a person regularly carries on a trade as a contractor, the evidence here suggests that the appellant and his team were recognised as superior workers, and that there was simply no need for them to advertise their skills.

Moving a large lintel was not incidental to the trade of bricklaying

46 The evidence concerning the lifting of lintels in the course of bricklaying work was as follows:

(1) In his affidavit sworn 9 December 2005 the appellant deposed that the lintel was an inverted T shape, that it weighed about 250 kgs, and that it was to be used to support the bricks above the opening to a garage. It was lifted by 4 men, including himself, when he suffered the onset of low back pain which spread into his left buttock and left upper leg.

(2) In his affidavit sworn 7 December 2007 the appellant deposed that it was not until 2004 that he was instructed that a crane should be used to position lintels such as this. The lintel, he deposed, had to be put into place so that the brickwork could continue.

(3) In re-examination (by leave, the issue not having been raised in cross-examination) the appellant gave this evidence:

This lintel that you were lifting with the others at the time when you had the injury back in November 2003, when working for Henley, had you done lintel lifting before?---No.

That lintel lifting work, was it part, in your experience, of an ordinary bricklayer's work, before you got to Henley?---No.

(4) Further cross-examined, the witness stated that the lintels provided support for the bricks which were part of the garage, and that the brickwork could not have been completed without the lintel having been put in place, and that there are lintels of different sizes. I do not consider that he accepted counsel's proposition that 'there are different sizes of lintels which brickies use'. But even if he did, it does not follow that erection of lintels of all the different sizes was work incidental to the trade of bricklaying.

(5) Mr Messenger, the project manager, employed by the respondent, said this by statement dated 14 July 2005:

The heaviest thing that Pero would have lifted would have been the galvanised steel lintels. They vary in size from 900 mm long to 3.6 long. When the lintels are in excess of 2.1 the brickies would normally get someone to help them lift it onto the top of the brickwork above windows and doors.

(6) Mr Messenger, by further statement dated 14 September 2006, said the following:

In any event, to my knowledge and strong belief, Pero Kovacic was not required or pressured by any person of our Company to lift and carry or assist in the lifting and carrying of any large steel lintel at the time of the alleged incident in November, 2003.

By that date our company had for many years organized for a mobile crane to attend sites as necessary so that heavy items could be lifted by mechanical means.

In the case of the bricklaying crew of which Pero Kovacic was part of, it was only a matter of contacting the relevant Construction Supervisor and letting him know that a crane would be required so that he would then make a 'phone call to book such a crane to attend on site. A mobile crane is always has to be booked for a minimum of two hours.

Basically the same system of work is used by bricklayers today as it was back at the end of 2003. That is we ensure that scaffolding is properly constructed on site as it is required. We also organize the hire and attendance on site of a mobile crane as necessary. The cost of hire for a mobile crane was factored into the total price for the construction.

Supervisory site (sic) don't attend on site for every part of every working day that the bricklayers attend a particular site and therefore it is up to the bricklaying gang to advise the Supervisor as to when a crane is needed to lift a large steel lintel. In the incident referred to the gang or individual members would have decided themselves to manually handle a steel lintel as we would not have required them to do so.

To my knowledge Pero Kovacic was an experienced bricklayer and records would confirm that he had been performing bricklaying work for our Company for around 12 months or more prior to the date of the alleged incident. He had worked on many double storey homes before the incident date and I believe that he and his crew would have been familiar with the fact that a mobile crane would be organized by the Supervisor whenever it was necessary for one to be available on site.

All the double storey homes have a double garage and in the circumstances that a heavy steel lintel was required to be lifted and put into place, the cost of mobile crane hire was factored into the total cost of the dwelling under constructions.

(7) Stephen Van Someren, a construction supervisor employed by the respondent, stated on 14 September 2006 that -

Since I have been at Henley Arch Pty. Ltd. Mobile crane assistance has always been available for the lifting of any items that are heavy such as a steel lintel of 5.2 metre length for a double garage. It was up to a person of a bricklaying gang to contact the Construction Supervisor in advance, giving the date and the time when the gang would be ready to have a mobile crane attend and lift a large steel lentil (sic) onto brick piers that would have been completed by them. Such a request for a mobile crane to attend a site would, to my knowledge, never have been refused by any Construction supervisor.

It is a strong possibility that in the circumstances read out to me the gang members themselves may have decided in order to get the job done more quickly they bypassed the usual system of contracting (sic) the Construction Supervisor for a mobile crane to be organized and lifted and transferred a heavy steel lintel by themselves.

47 The evidence left no doubt that the erection of large lintels was necessary from time to time so that the bricklaying work could be completed. But it does not follow that the erection of large lintels was incidental to the trade of bricklaying. Although the statements made by Messrs Messenger and Van Someren addressed the negligence issue, they made the point, as a sidewind, that the erection of the large lintels was not bricklayers' work at all. Their evidence that such erection should have been performed by a crane, brought on site specifically to do the job, the cost of the crane being factored into the total cost of the home, seems to me to contraindicate performance of that task being incidental to the bricklayers' work. There is a difference between the need for a job to be done so that a contractor can fully perform his work and it being incidental to the contractor's trade to do that job.

The appellant was not deemed to be a worker under s 9(2) of the Act

48 I noted earlier that appellant's counsel effectively abandoned reliance upon s 9 of the Act as a foundation for his client's entitlement to compensation. He was correct to do so. The learned judge was in my opinion right to conclude that the contract between the appellant (or a partnership or which he was a member) was a 'relevant contract' within the meaning of s 9(1)(a) and (b) of the Act. But sub-s (1)(f)(ii) and (iii) then operated to deny the contract that status.

The judge's rejection of the applicant's allegation of injury sustained on or about 25 November 2003

49 The judge addressed what he described as the 'defendant's primary submission that, in fact, no ... accident involving a lintel occurred'. He referred to (1) the evidence given by the appellant, (2) the want of a relevant history given by the appellant to doctors, (3) the content of a WorkCover claim form signed by the appellant (it did not specify a particular incident on a particular date), (4) the fact that affidavits sworn by two of the respondent's sons did not say anything about an incident such as the respondent alleged, and (5) the fact that the appellant had provided false details to a bank when applying for a loan. He then said this:

The onus, of course, is on the plaintiff to satisfy me that on or about 25th November 2003, the plaintiff was performing work not incidental to his trade as a bricklayer, for the purposes of this section of the Act. After considering all of the above evidence and the fact that the plaintiff did not impress me as a reliable witness, I am not satisfied, in fact, that the plaintiff suffered any particular injury whilst performing any work for the defendant in late 2003, whether it be 25th November or 9th December. I am simply not satisfied that there was any particular incident involving the lifting of a heavy steel lintel.

50 It appears, in the event, that his Honour did not accept the appellant's evidence that there had been an incident as described because (1) the appellant had not given such a history to a number of doctors; (2) the appellant did not impress him as a reliable witness; and (3) two of the appellant's sons had sworn affidavits in which they had not referred to such an incident.

51 In my opinion, at least the second and third of those reasons did not safely ground his Honour's conclusion.

52 As to the second of them, the judge appears to have relied upon the lie told in the course of the loan application - which was that the appellant worked for one of his sons and was paid so many dollars per month - rather than that he, or he and his sons, conducted a bricklaying business. His Honour said of the lie that it 'did not help the plaintiff when it comes to deciding if he is an honest witness'. He made this observation shortly before stating that the appellant did not impress him as a reliable witness.

53 The difficulty with his Honour's conclusion about the appellant's reliability is that, for the purposes of determining whether the appellant had established that he was a worker, or was deemed to have been working under a contract of service, the judge had evidently accepted the appellant's evidence. Contrary to the submission for the respondent in this Court, not all that evidence assisted the appellant's case. So, in assessing the appellant's reliability as a witness, his evidence about his work arrangements could not have been dismissed as evidence which objective circumstances obliged him to give. In any event, whilst a judge may accept some part of a witness's evidence as being reliable, and reject another part of it as being unreliable, there is nothing to indicate that his Honour undertook such an analysis in this case. Rather, he baldly stated, having previously accepted much of the appellant's evidence, that the appellant did not impress him as a reliable witness. He said nothing to indicate his appreciation of the apparent inconsistency in his treatment of the appellant's evidence.

54 I turn to the third reason for the judge not accepting the appellant's evidence that a specific lifting incident had occurred - the fact that neither of the appellant's sons had referred in their affidavits to the happening of such an incident. The reason why there was no such reference is crystal clear. The appellant's application first came on for hearing on 26 October 2007. It had very recently emerged, according to what appellant's counsel then said, that the respondent's defence upon the 'worker' question was broader than had been anticipated.[20] The appellant was being required to prove 'apparently everything and anything as is required by ss 8 and 9 of the [Act].' Counsel was unable, he said, 'to answer every issue that might be there in ss 8 and 9' that day. He made an application to adjourn, which was scarcely opposed. He indicated what new material would be prepared:

We anticipate Your Honour, further affidavit material from the plaintiff, the sons who have been historically a part of this bricklaying team, also the accountant whose name is Stojanovska.

55 What then followed was that the appellant's sons swore affidavits which addressed the issues to do with whether at a relevant time the appellant had been a worker in the primary or extended sense; the appellant swore his affidavit of 7 December 2007 which almost entirely dealt with those issues; and the accountant swore an affidavit which also addressed those issues.

56 The learned judge said in his reasons that in his view it -

... beggar[ed] belief that the plaintiff's sons would not have known of an incident where their father was lifting a heavy steel lintel, with them, and sustained back pain such that he had to sit down and then go to a doctor and, as he said, had to take some ten days off work. Neither of them mention this incident despite the fact that they have had considerable time to reflect on it before swearing any affidavits.

57 With respect, the context in which the sons' affidavits had been prepared had focused upon the single matter agitated on 26 October 2007. There had been nothing said about what the judge described, in his reasons, as the respondent's 'primary submission'. It might have been forecast, on consideration of histories given by the appellant to doctors, and having regard to the content of the claim form which he signed, that an issue might arise in that connection. But it is entirely explicable that the sons' affidavits focused only upon the issue which was certainly alive.

58 The judge might have made a different point: that because, after the appellant had been cross-examined about the histories given to doctors, and about the bank loan, his counsel had not sought to rely upon fresh affidavits sworn by the sons which addressed the question whether the appellant had suffered injury at work in late November 2003, it should be inferred that they could say nothing to assist the appellant in that connection. Having regard, inter alia, to the comment which would inevitably been made by counsel for the respondent had a belated attempt been made to rely upon fresh affidavits, I do not say that such a point would have been a good one. In any event, that possible path of reasoning can be put to one side; for it was not the judge's path of reasoning.

59 Two of the three limbs of the judge's reasoning being unsound, I consider that his conclusion has been successfully impugned. For one is then left only with the histories recorded by doctors and the content of the WorkCover claim form. The judge's reasons show that he did not consider whether to accept or reject the appellant's evidence only by reference to those matters. It cannot be speculated what he would have decided had he so considered the issue. Moreover, for the reasons which follow, I consider that this Court is not equipped to decide whether any apparent inconsistencies should, standing as admissions against interest, lead to the appellant's evidence of the occurrence of a specific lifting incident being not accepted.

60 That inconsistent histories were recorded by doctors, and that the claim form contained contradictory assertions, are matters of fact. But whether they should provide a sufficient reason for rejecting the appellant's evidence that he suffered injury in a specific lifting incident must depend at least (1) upon an evaluation of the circumstances in which the histories were given - sometimes, it seems, without the assistance of an interpreter, at other times with a young boy as an interpreter, on one occasion at least with a professional interpreter; (2) upon consideration whether the history as recorded on any particular occasion was an apparent record of what the appellant said, or was rather the doctor's distillation of what he understood the appellant to have said; and (3) upon an evaluation of the appellant's creditworthiness generally. The first two of those matters could be investigated by this Court. But with respect to the third, the Court is at a distinct disadvantage; and what was made of the third would be likely to influence a court in its evaluation of the first two matters.

61 In the event, whilst I consider that the judge's finding adverse to the appellant upon the question whether the appellant suffered injury in a lifting incident on or about 25 November 2003 cannot be sustained, I consider that this Court is not in a position to substitute a finding to the contrary. In my opinion, the appeal should be allowed, and the appellant's application remitted for fresh consideration by a County Court judge upon the question whether the appellant sustained injury to his low back in a lifting incident on or about 25 November 2003.

62 I should add that on this appeal the respondent abandoned a notice of contention which - upon the assumption that the appellant was a worker in the primary or extended sense, and upon the further assumption that the appellant suffered compensable injury whilst lifting a lintel on or about 25 November 2003 -sought to argue that any injury sustained was not a serious injury both in its pain and suffering and economic loss consequences. As presently advised, I see no reason why this should become an issue for litigation on the remitter.

[1] [2008] HCA 13; (2008) 82 ALJR 669, 673-674, [21], [24].

[2] [2003] HCA 22; (2003) 214 CLR 118.

[3] [2006] HCA 1. See also the extensive analysis of such right of appeal by Dodds-Streeton JA in Kelso v Tatiara Meat Pty Ltd [2007] VSCA 267; (2007) 17 VR 592.

[4] His Honour opined that 'one must be very careful in using the reasoning of courts in vicarious liability cases when it comes to an issue between two parties where one of them is claiming' workers compensation benefits from the other. But the question whether A was employed by B is common to both situations. The question whether vicarious liability will attach in other circumstances is a quite separate enquiry. So I consider that his Honour's observation was misplaced. It was not shown, however, to have led to an incorrect analysis of the circumstances of the case.

[6] In substance, continued by operation of clause 2(1) of Schedule 1 of the Workers Compensation Act 1987 (NSW).

[7] [1949] HCA 49; (1949) 79 CLR 389, 401.

[8] [2007] VSCA 86; (2007) 16 VR 393.

[9] See s 8(3), the predecessor of which was inserted into the Workers' Compensation Act 1958 following Minogue v Phillips Pty Ltd (1957) 3 WCBD 174, 176.

[10] Section 8 (1)(b) and (3). As to the plural 'workers', see Monier Limited v Szabo (1992) 28 NSWLR 53; and note that under the New South Wales legislation there is no 'actual performance' exception to the exclusion.

[11] [1949] HCA 49; (1949) 79 CLR 389, 401.

[12] Becker and Carthew v Davies [1952] VicLawRp 32; [1952] VLR 248, 252; Melbourne & Metropolitan Board of Works v Smith (Full Court of Supreme Court of Victoria, unreported, 20 March 1991).

[13] Melbourne & Metropolitan Board of Works v Smith (Full Court of Supreme Court of Victoria, unreported, 20 March 1991).

[14] Higgins v Jackson and ors [1976] HCA 37; (1976) 135 CLR 174, particularly 176 (Barwick CJ).

[15] [1949] HCA 49; (1949) 79 CLR 389, 401.

[19] Likewise any family partnership which might be construed to have existed.

[20] Counsel referred to the attachment to a letter dated 9 December 2005 sent by a WorkCover agent to the appellant. The document was replete with uncertainty. It rejected a claim, numbered 0405008974, apparently made against Z & N Ostojic, on the basis that the appellant had been part of a bricklaying team each member of which had received an equal payment out of moneys received from Henley by the Ostojic partnership. (Zoranka Ostojic is the appellant's daughter. Nenad Ostojic is her husband. He was one of 'the team'; and Zoranka, an English speaker, latterly prepared the invoices for work done by the team for Henley. The invoices were issued in the name of a partnership constituted by she and her husband). The attachment to the letter of 9 December 2005 also advised the appellant that a 'concurrent claim' against Henley, made under a different claim number, would be admitted if the appellant made a statutory declaration that he 'only sub-contracted for Henley'.