Queensland Stations Pty Ltd v. Federal Commissioner of Taxation
70 CLR 539(Judgment by: Rich J)
Queensland Stations Pty Ltd
v. Federal Commissioner of Taxation
Judges:
Latham CJ
Rich JDixon J
Subject References:
Taxation and revenue
Pay-roll tax
Droving contract
Employee or independent contractor
Legislative References:
Pay-roll Tax Assessment Act 1941 No 2 - s 3
Judgment date: 3 August 1945;
Sydney
Judgment by:
Rich J
The questions submitted in the case stated involve the interpretation of "wages" in the definition clause (s. 3 (1)) of the Pay-roll Tax Assessment Act 1941-1942 and its applicability to the payment per head of cattle made to a drover pursuant to the agreement for droving cattle set out in the case. This part of the definition clause was considered by this Court in Mutual Acceptance Co Ltd v Federal Commissioner of Taxation [F15] , at p. 398, when it was said: "A definition of this kind is not an exercise in philology. It is a mechanical device to save repetition. Its purpose is not to endow the word `wages' with a new meaning, but to enable the expression `wages, salary, commission, bonuses or allowances paid or payable,' etc, to be supplied by a single word whenever it is desired to legislate in this Act for anything which is included in that expression. In ordinary parlance, wages is the term used for the remuneration paid for other than `white-collar jobs.' The definition clause is employed to make it clear that, where not otherwise indicated, the Act is intended to apply to all forms of remuneration for all types of services rendered under contracts of service."
What falls to be determined in this case is whether the kind of payment made under this droving agreement is in law "wages" within the meaning of ss. 12 and 13 of the Act as expanded by s. 3. The material part of the agreement is that which obliges the drover to "find all men and plant horses and rations necessary and sufficient for the safe droving of the cattle and pay all wages in connection therewith." The drover also undertakes to take proper care of and account for all stock placed in his charge and not to dispose of any without the consent of the owners. The owners reserve the right at any time to terminate the agreement in the event of the drover committing a breach of the "covenants" contained in the agreement and in such event the drover shall accept instant dismissal. The consideration for the performance of the conditions of the contract is the payment to the drover of three shillings and sixpence for all cattle delivered by him at certain trucking yards. For the purpose of carrying out the agreement on the part of the drover the requirements are set out in clauses 8 and 9. A consideration of these requirements and of the portions of the agreement I have mentioned lead me to the conclusion that the drover was an independent contractor. The contract between the parties is a contract for services but it is not a contract of service (Simmons v Heath Laundry Co [F16] , at pp. 548, 549). The tests applicable in deciding whether a man be a servant or an independent contractor are discussed at length in Performing Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd [F17] , at pp. 766 and following; Dowd v W. H. Boase & Co Ltd [F18] . The facts I have referred to appear to me to show that the drover undertook to produce or bring about a specified result employing his own means to accomplish that result.
The owner had no control over the particular details of the job as it went on. The calling of a drover-one of great antiquity-is distinct and separate from the business of graziers. By trade and usage he is at liberty to drive the cattle of any other person. While engaged in the operation he is, apart from specific agreements, in exclusive possession of the cattle and is free from the control of the owners. In Ex parte Campbell [F19] , it was held that the person in charge of certain sheep was "the owner" within the meaning of "owner" in the Pastures Protection Act 1902 No. 111 (N.S.W.). And it was found necessary in 1850 in New South Wales to legislate to prevent selling or disposing of cattle by drovers by providing that such persons shall in law be deemed to have the charge and not the possession of cattle where the unlawful taking or disposition would if such persons were in charge merely as the servants of the owner amount to larceny-14 Vict. No. 6 (repealed 22 Vict. No. 9). In 1853 this statute was referred to in R. v Liffidge [F20] , at pp. 794, 795, where, after discussing such cases as Quarman v Burnett [F21] , at p. 514, Milligan v Wedge [F22] , R. v Hey [F23] , at p. 414], the Supreme Court of New South Wales held that a drover, being in the position of one who has an independent calling, was in possession and not charge merely, Stephen C.J. saying: "To hold that a person of that description, engaged on such a service, becomes thereby the employer's servant, subjecting the owner of the cattle to all the consequences of such a relation, we think would be as little consistent with reason, as with law" [F24] .
In the instant case it is clear from the facts that the owner had parted with the possession and control of the cattle. The obligation imposed on the drover to obey and carry out all lawful instructions is not a reservation of detailed control and possession having regard to the terms of the agreement as a whole.
But it was contended that the matter was concluded by Logan v Gilchrist, Watt & Cunningham [F25] . In that case there was no fixed destination for the delivery of the sheep, but such as the owner might from time to time decide, and, as Isaacs A.C.J. said, "the sheep could be shifted all over the country," and his Honour decided that the grazier "maintained a constant right to intervene" and that he "had full control" [F26] . And Higgins J. said in effect that there was no rule of thumb of universal application to droving contracts, but that each case should be decided on its particular facts. Gavan Duffy J., the other Justice who sat in the case, gave no reasons. I do not think that this case affects the authority of R. v Liffidge [F27] or is decisive of the present case. And see Wyatt v Forrester [F28] , at pp. 117, 118, per Macrossan S.P.J.
For the reasons stated I consider that the drover was not the servant of the respondent company and that the payment to him does not fall within the list of words contained in s. 3 (1) under the heading "wages." I would answer both questions in the negative.