Humberstone v. Northern Timber Mills

79 CLR 389
1949 - 1116A - HCA

(Judgment by: Latham CJ)

Humberstone
v. Northern Timber Mills

Court:
High Court of Australia

Judges:
Latham CJ
Rich J
Dixon J

Subject References:
Workers' compensation
Whether employee or independent contractor
Statute
Retrospective operation
Workers'

Legislative References:
Compensation Act 1928 (No 3806) (Vic) - The Act

Hearing date: MELBOURNE 24 October 1949; 25 October 1949;
Judgment date: 16 November 1949

SYDNEY


Judgment by:
Latham CJ

The following written judgments were delivered:

W. R. C. K. Humberstone died on 3rd December 1947 as the result of over-exertion in an effort to remove a punctured tyre from a wheel which he had taken off his motor truck. His widow made a claim against the respondent firm, Northern Timber Mills, under the Workers' Compensation Act 1928 (Vict.) as amended. The firm denied liability. The Workers' Compensation Board held that the deceased was a worker within the definition of "worker" contained in s. 3 of the Workers' Compensation Act 1928, holding that he worked under a contract of service with the firm as his employer. The Board also held that his injury arose out of and in the course of his employment by the firm. The Board proposed to make an award in favour of his widow, the claimant, for PD1,000 with costs. The Board stated a case under s. 9 (3) of the Workers' Compensation Act 1937 for the determination of the Full Court of the Supreme Court upon the following questions of law:"(1) Whether there was any evidence upon which the Board could find that the deceased was a `worker' within the meaning of the Acts. (ii) If the answer to (i) is Yes, whether there was any evidence on which the Board could find that the injury by accident arose out of or in the course of the employment." The Full Court answered the first question "No" and accordingly it became unnecessary to answer the second question. The claimant appeals to this Court.

The evidence showed that Humberstone had been working since 1924 in carrying timber, boxes and sometimes logs from the North Fitzroy Railway Siding. Originally he held himself out as a carrier for general employment. There was a signboard at his residence and he used to carry furniture and provide transport for picnic parties. But for twelve or fourteen years he had, with only occasional exceptions, done work only for the respondent firm. He attended at the firm's timber mills at a regular hour in the morning and carried timber etc as required by the firm. He stopped work at a regular hour in the evening and at a regular time for lunch. On occasions he carried for some other persons when otherwise he would have returned with an empty truck, but he then mentioned the proposal that he should do such work to the management of the firm. Apparently he retained for himself payments by other persons on these infrequent occasions.

The truck which Humberstone used belonged to him. It was not owned by the firm. The Carriers and Inkeepers Act 1928 (Vict.), s. 13, provides that "Every person ... who carries on business as a carrier by land for hire without having obtained a licence shall be liable to a penalty of not more than fifty pounds" and in default of payment to imprisonment. Section 14 provides for application for licences to be made to two justices who must be satisfied that the applicant is a fit person to be licensed to carry on business as a carrier. Humberstone annually took out a licence under the Act and paid for it. "K. Humberstone Carrier," not the name of the firm, was painted on the truck. He obtained petrol from the firm but paid for it himself. He paid for insurance and maintenance of the truck. The truck was under his own management and control. He was paid on a weight and mileage basis for each job that he did. The firm prepared weekly accounts showing what was due to him, deducting the money due for petrol supplied to him. The payment made to him covered payment for his services in carrying and therefore for the use of the truck for that purpose.

The distinction between a servant and an independent contractor was explained in the case of Performing Right Society, Ltd v Mitchell & Booker (Palais de Danse) Ltd [F1] . If the work done by one person for another is done subject to the control and direction of the latter person as to the manner in which it is to be done the worker is a servant and not an independent contractor. If, however, the person doing the work agrees only to produce a given result but is not subject to control in the actual execution of the work he is an independent contractor. This principle was applied in this Court in the case of Queensland Stations Pty Ltd v Federal Commissioner of Taxation [F2] . Humberstone was in my opinion a carrier in business on his own account but found that the requirements of the firm kept him fully occupied with all the work which he wished to do. The firm utilized his services on the same basis as that upon which any carrier is ordinarily employed, payment being based on the weight or some other characteristic of the goods carried and the distances for which they were carried. There is no evidence of any control exercised or exerciseable by the firm as to the manner in which the work was to be done.

I am therefore of opinion that Humberstone was an independent contractor, and that there is no evidence to support a finding that he worked under a contract of service with the firm so as to show that he was a worker within the definition of that term contained in s. 3 (1) of the 1928 Act.

But the claimant relies upon s. 3 (6) of the Act, which was added to the principal Act by the Workers' Compensation Act 1946. This provision is in the following terms:"Notwithstanding anything in this Act or any law where any person (in this sub-section referred to as `the principal') in the course of and for the purposes of his trade or business enters into a contract with any other person (in this sub-section referred to as `the contractor')-(a) under or by which the contractor agrees to perform any work not being work incidental to a trade or business regularly carried on by the contractor in his own name or under a firm or business name; and (b) in the performance of which the contractor does not either sublet the contract or employ workers or although employing workers actually performs some part of the work himself-then for the purposes of this Act the contractor shall be deemed to be working under a contract of service with an employer and the principal shall be deemed to be that employer."

The idea of this provision is evidently to extend the benefits of the Act to persons who agree to do work which is not work belonging to a trade or business carried on by them, even though they may regularly carry on a trade or business. In the first place, there must be an agreement by B (a contractor) to perform some work for A (a principal). Next, B may or may not regularly carry on a trade or business in his own name or under a firm or business name; that is, on his own account. If he does regularly carry on any such business, then the work agreed to be performed must be work which is not incidental to that business. If B, however, undertook for A a job which was quite different from, so as not to be incidental to, any of the work which belonged to a trade or business regularly carried on by him, then, in relation to any such work agreed to be done by him he would be deemed to be working under a contract of service with A. But if B did not carry on any trade or business of any kind on his own account, then no work which he agreed with A that he should do could be work incidental to a trade or business being carried on by him. Therefore in such a case if B agreed to do any work at all for A he would come within the section. The position would be the same if he carried on some trade or business but did not carry it on regularly and the work which he agreed to do fell outside work incidental to that trade or business. I illustrate my understanding of the sub-section by taking the case of a man who is a plumber. Such a man may be employed as a servant, and then he works under a contract of service and is a worker within the definition of "worker" contained in s. 3 of the principal Act. But if he carries on business on his own account as a plumber and agrees to do plumbing work for a person A he is prima facie an independent contractor and not a servant of A. If, however, he agrees with A to do any work for A other than plumbing (e.g. carpentry) then he is to be treated as a worker within the meaning of the Act by virtue of s. 3 (6), whether or not he carries on business on his own account as a plumber and whether or not he carries on that business regularly. If s. 3 (6) applies to him, then A becomes liable under the Act as his employer to pay compensation for personal injury by accident arising out of or in the course of his employment: Principal Act, s. 5 as amended by Workers' Compensation Act 1946, s. 3 (a).

In order that s. 3 (6) should apply it is necessary in my opinion that the work agreed to be done should be work which is outside any trade or business regularly carried on by the person described as a contractor. In this case Humberstone did carry on a trade or business as a carrier. He spent his whole working time in that trade or business and he carried it on regularly. The work which he did for the firm was carrying work. It was not outside the trade or business which he carried on with his registered truck-it was that business itself. He was in the same position as the plumber in the example given where a plumber who carries on trade or business on his own account agrees to do plumbing work. For these reasons in my opinion s. 3 (6) does not apply to the present case. In my opinion the result is the same whether the case is considered as depending upon a contract made about 1924 between the parties which was performed during the subsequent years or upon separate contracts for separate carrying jobs made from day to day or upon a contract not necessarily the same as that originally made in 1924 but to be inferred from the course of conduct of the parties in the last twelve or fourteen years. In my opinion the last-mentioned view is to be preferred. But upon any view of the contract it was a contract for doing the work of carrying which was work in a business which Humberstone regularly carried on upon his own account.

Upon a further ground the application of s. 3 (6) is in my opinion excluded in the present case. The extension of the application of the Act enacted by s. 3 (6) applies only where a "principal" "enters into a contract" with a "contractor." The words are not "has entered into a contract." A statute is prima facie prospective: Gloucester Union v Woolwich Union [F3] , and see In re School Board Election for Parish of Pulborough [F4] , at p. 737-"It is a well-recognized principle in the construction of statutes that they operate only on cases and facts which come into existence after the statutes were passed, unless a retrospective effect is clearly intended." The words in s. 3 (6) are where a person "enters into a contract." These words in my opinion refer to contracts entered into after the statute had come into operation and they should not be given the same effect as if the words were "where any person has entered into a contract." For this reason also s. 3 (6) does not apply in favour of the claimant in the present case. The contract in this case should, as I have said, be regarded as a contract which existed before the 1946 Act was passed and continued in existence thereafter. For this reason s. 3 (6) does not in my opinion apply in favour of the claimant. The only means of escaping this conclusion would be to hold that each carrying job constituted a new and separate contract so that many new contracts were made from day to day after the 1946 Act came into operation. But upon this view it could hardly be argued that Humberstone was a servant of the firm-he would most obviously be in the same position as any carrier which the firm might use from time to time so that he would not be acting under a contract of service: and s. 3 (6) would not apply for reasons already given.

I am therefore of opinion that the decision of the Full Court was right and that the appeal should be dismissed.