Was a tenant a ‘worker’ when carrying out repairs, which he had asked the landlord to do, since the landlord had offered him an amount of money for doing the repairs himself?
The NSW Court of Appeal recently dismissed the appeal of an insurer against the decision of a
presidential member of the Workers Compensation Commission, who had overturned a previous decision of an arbitrator.
Paraplegia caused by fall from pergola
A man, who had leased a house, discovered a number of defects after he moved in. He
approached his landlord and understood the landlord to have said that, if he fixed the taps and
the leaking roof and cleaned the pergola, the landlord would pay him $1000. The landlord
brought a ladder, and the tenant and a friend of his who was a tradesman proceeded to work on the roof.
As the tenant was cleaning the leaves and debris from the pergola on 24 June 2006, he stepped
backwards and fell through some Perspex sheeting. He suffered severe back injuries resulting in paraplegia.
The tenant claimed that because he had been promised payment he had been carrying out the work as an employee of the landlord and sought compensation for his injuries. He claimed he had been a worker either within the general definition
in s4 of the NSW Workplace Injury Management and Workers Compensation Act 1998 or within the extended definition in cl2(1) of Sch1.
Arbitrator’s decision
The tenant’s claim was heard by an arbitrator. The only issue was whether the tenant had been a worker when injured. The landlord disputed that he had offered the tenant payment for the work. He had only offered to lend the ladder so that the tradesman could get up on the roof.
The arbitrator considered various inconsistencies in the accounts given and found the evidence of the landlord to be more plausible and internally consistent than the evidence of the tenant. It appeared inherently improbable to the arbitrator that the landlord would have offered a sum as large as $1000 for the work that needed to be
done. On 3 March 2010, the arbitrator issued a certificate of determination rejecting the man’s
claim and entering an award in favour of the landlord and the insurer.
Presidential member’s decision
The tenant appealed against the decision. A presidential member of the Workers Compensation Commission found that the arbitrator had applied the wrong test in seeking to determine whether there had been a contract between the parties that
would have made the tenant a worker according to the Act. The presidential member then conducted
her own review of the evidence. She did not think $1000 had been an improbable amount. The landlord had already had to pay an electrician for some work on the property, and the tenant had paid for some taps and done some repair work
with the help of his friend, the tradesman. The $1000 could well have worked out cheaper for the
landlord than getting more tradespeople to come in. The most plausible explanation for the tenant’s
conduct had been his expectation to be paid.
The presidential member reversed the arbitrator’s decision and found that the tenant had been a
worker according to cl2 of Sch1 of the Act. The insurer then appealed against that decision. The
grounds for the appeal included that: the presidential member had erred in deciding the
case on the basis of a ground that had already been abandoned by the arbitrator, namely that the
contract for the performance of work existed because of the promise to pay $1000 the
presidential member had misconstrued the decision under review and mistakenly concluded that the arbitrator had applied a subjective rather than objective test in determining whether there had been a contract (other than the residential
lease).
Court of Appeal
The Court of Appeal of the Supreme Court of NSW examined whether a presidential member had the
power to rehear the proceedings and form her own views although, unlike the arbitrator, she had not
seen or heard the witnesses in person. It found that a presidential member should not be
constrained from reaching what he or she regarded as the correct decision, especially
keeping in mind that the Workers Compensation Commission was not bound by the rules of evidence.
The court also pointed out that the argument based on the alleged contract to pay $1000 had
not in fact been abandoned after the arbitrator’s decision. It had come up before the presidential
member also. Because it had not been abandoned, there was no question of a denial of
procedural fairness.
The contractual relationship between tenant and landlord regarding the repairs and an agreement to
pay $1000 had led to the conclusion that the tenant fell within the definition of ‘worker’. Even
though some of the defects the tenant had complained to the landlord about may have been
the responsibility of the tenant, that could not have been the case in relation to the leaking roof, for example.
The court found that the presidential member had erred in her view that the arbitrator had wrongly
applied a subjective test. The arbitrator had understood that an objective assessment was
required of the relationship between the parties, and the arbitrator had done that. There had been
no legal error. The question then was whether the error had infected the presidential member’s
ultimate conclusion.
The court found that the presidential member had conducted her own review before reaching her
conclusion. As a result, her conclusion had not depended on the arbitrator’s reasoning which the
presidential member had wrongly identified as erroneous. The insurer’s appeal had not been
made out.
By majority, the court dismissed the appeal. The tenant was considered to be a ‘worker’.
