Trustee for Peter Hatfield Trust v FC of T

Members:
DK Grigg SM

Tribunal:

MEDIA NEUTRAL CITATION: [2024] AATA 3428

Decision date: 26 September 2024

Senior Member DK Grigg

INTRODUCTION

1. During the period under examination the Applicant operated a plumbing business under the name "Peter Hatfield Plumbing".

2. This matter concerns notices of assessment ( NOA ) of Superannuation Guarantee Charge ( SGC ) issued to the Applicant by the Australian Tax Office ( ATO ) concerning Mr Christopher Hargreaves for the quarterly periods 1 January 2010 to 30 September 2020 ( Relevant Periods ). The Commissioner of Taxation ( Commissioner ) determined the relationship between the Applicant and Mr Hargreaves was that of employer and employee, respectively, for the purposes of the Superannuation Guarantee (Administration) Act 1992 (Cth) ( SGAA ).

3. The Applicant contends Mr Hargreaves was not an "employee" as that term is defined in s 12 of the SGAA.

BACKGROUND

4. In February 2021, Mr Hargreaves contacted the ATO to complain that the Applicant had not paid superannuation on his behalf for a period of 10 years.^[1] Section 37 T-Documents ( T-Docs ), T3, p 13. The ATO requested further information and asked him to complete a "Status of the worker questionnaire - worker" (" Worker Questionnaire ").^[2] T-Docs, T4, page 14-28.

5. Mr Hargreaves completed the Questionnaire and advised the ATO in March 2021 ^[3] T-Docs, T5, page 29-42. that he considered he was an employee of the Applicant. Mr Hargreaves provided the ATO with the following documents:-

(a) Copies of invoices he had issued to the Applicant during the Relevant Period.^[4] T-Docs, T5.3. The invoices set out the date, job details and the time spent by Mr Hargreaves on work performed for the Applicant. The invoiced amount was calculated on the basis of the number of hours worked multiplied by a flat hourly rate.
(b) Copies of his bank account statements on which he indicated when he had received a payment from the Applicant.^[5] T-Docs, T5.4.
(c) Copies of "card transactions" statements of "Resort Plumbing ABN" indicating the recording of receipts of the payments received from the Applicant.^[6] T-Docs, T5.12. Mr Hargreaves had been trading as a sole trader, under various names, with an ABN since 2010 and has been registered for GST since 1 July 2000.^[7] T-Docs, T7.
(d) Copies of CBUS statements showing superannuation payments received from

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Peter Hatfield Plumbing for the period 1 July 1996 to 31 December 1996.^[8] T-Docs, T5.13.

6. The ATO contacted the Applicant to advise it was conducting an audit of the Applicant's business for the period 1 January 2010 to 30 September 2020 to ascertain whether it had met its SG obligations. The Applicant was asked to complete a "Status of the worker questionnaire - payer" (" Payer Questionnaire ") and return it to the ATO.^[9] T-Docs, T6.

7. The Applicant provided the ATO with various documents including :

(a) ASIC business search results showing the business names Mr Hargreaves traded under (i.e. "Resort Plumbing" and "Sandy Point Plumbing");^[10] T-Docs, T11, page 2006-2012.
(b) pictures of Mr Hargreaves' business cards on display at Tradelink stores;
(c) card transactions for Peter Hatfield Plumbing;
(d) copies of Mr Hargreaves' invoices;
(e) Mr Hargreaves' contractor licence search history indicating Mr Hargreaves had an active plumbing, gas fitting and water-based fire system stream licence;^[11] T-Docs, T11.1.7, page 2014. and
(f) Mr Hargreaves' advertisement for his plumbing services on webpages during the Relevant Periods.^[12] T-Docs, T7.10.2; T7.11.2.

8. In the Payer Questionnaire the Applicant informed the ATO that:^[13] T-Docs, T7.12.

(a) Mr Hargreaves was contracted to provide the agreed plumbing maintenance contract work;
(b) the arrangement with Mr Hargreaves was based on a verbal agreement;
(c) it was agreed that Mr Hargreaves would perform work as a sub-contractor as needed;
(d) it was agreed Mr Hargreaves would charge an hourly rate inclusive of GST for the work performed;
(e) Mr Hargreaves set the hourly rate;
(f) if work was available the Applicant would ask Mr Hargreaves if he was available;
(g) Mr Hargreaves had the right to refuse any job offered;
(h) the Applicant did not supervise the work done by Mr Hargreaves;
(i) Mr Hargreaves advertised his own business at Tradelink and other places;
(j) the Applicant did not pay Mr Hargreaves any employee benefits such as sick pay, travel allowance or superannuation;
(k) Mr Hargreaves was responsible for his own public liability and personal accident insurance; and
(l) if Mr Hargreaves had to supply materials for a job, he would invoice the Applicant for those materials.

9. Following the audit, the ATO advised the Applicant that it considered the relationship between the Applicant and Mr Hargreaves as one of employer and employee under superannuation law.^[14] T-Docs, T8.

10. The Applicant provided the ATO with the following additional documents:^[15] T-Docs, T9.2-9.19.

(a) further material advertising Mr Hargreaves' services;
(b) ledgers showing payments made to Mr Hargreaves;
(c) further invoices received from Mr Hargreaves;
(d) documents indicating that during the Relevant Periods Mr Hargreaves also sub-contracted to at least three other businesses (Coastal Clear Drains, VMR Southport and Metro Concrete);
(e) Mr Hargreaves' timesheets and summary of the hours worked to demonstrate the "irregularity" of Mr Hargreaves' working hours;^[16] T-Docs, T12. and
(f) details of Mr Hargreaves' bank accounts.

11. The Applicant told the ATO that the services performed by Mr Hargreaves were "ad hoc". Mr Hargreaves was not engaged on a daily basis.^[17] T-Docs, T11, page 1987. To the extent there was any agreement in writing the Applicant submitted it was in the form of the invoices issued to it by Mr Hargreaves. Over the Relevant Periods the Applicant stated Mr Hargreaves charged three different hourly rates as follows:^[18] T-Docs, T11, page 1992.

21.3.1 On 25 February 2010, the rate increased to $40 per hour plus GST;

21.3.2 on 9 April 2010, the rate increased to $45 per hour plus GST;

21.3.3 on 22 July 2012, the rate increased to $55 per hour plus GST.

12. On 2 February 2022 the ATO informed the Applicant that the audit was complete. The ATO determined the relationship between the

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Applicant and Mr Hargreaves was as an employer and employee under the extended definition of s 12(3) of the SGAA. Therefore, the Applicant was obliged to pay superannuation for Mr Hargreaves.^[19] T-Docs, T13. Given the circumstances, the ATO determined not to issue any penalties against the Applicant for failing to meet its SG obligations.

13. On 2 February 2022 the ATO issued the NOA for the SGC for the Relevant Periods in accordance with its decision.^[20] T-Docs, T65-T107.

14. The total amount of the superannuation guarantee charge owed by the Applicant (including interest thereon) is $123,521.77.^[21] Respondent Statement of Facts, Issues and Contentions ( RSFICS ), Annexure A.

15. On 1 April 2022 the Applicant lodged an objection to the SGC NOAs.^[22] T-Docs, T14, T17.

16. Following receipt of the objection application the ATO asked for clarification about several issues.^[23] T-Docs, T19. The questions and answers provided by the Applicant were as follows:^[24] T-Docs, T20.

ATO Question	Applicant's Answer
For the relevant periods, did the parties agree, orally or in writing, that the worker would supply any equipment in performing the any services? [sic] If so, what was that equipment and how was that agreement reached? Please respond separately for each period if there was a different agreement for any of the periods.	Christopher Hargreaves (CH) was engaged as a subcontractor on a 'do and charge' basis. There was no discussions in relation to who supplied his tools/equipment [sic], as it was expected that as he was running his own business he would have the basic tools to perform work for his clients. CH purchased them himself. These tools/equipment were the standard items any plumber would use. If CH was an employee, he would have either been provided the tools to perform the work or an allowance to use or purchase their own. CH at no time requested to be either reimbursed or given an allowance for tools/equipment.
If the answer to the above question is that Mr Hargreaves provided his own tools and equipment, please expand as to the nature of these tools and/or equipment necessary to perform the work.	There was on occasions machinery and/or equipment which was needed to perform particular work such as mobile scaffolds (hired), large extension ladder (owned by PH), 100ml electric pipe threading, 100mm Viega Press Tool. These items were not used on a regular basis and only for particular jobs. PH would either hire or provide that equipment if needed.
ATC 13252 At paragraph 39 of your responses to the questionnaire provided by Mr Hargreaves, you advise that where Mr Hargreaves required additional materials, you advise that Mr Hargreaves would acquire these and invoice you accordingly. To assist our understanding, can you provide an instance as to where this occurs.	When CH was engaged to attend a job, he was expected to achieve a result and complete the work using whatever materials/goods he decided were required. CH would purchase the items through his own account with the supplier and then invoice PH for them. Often his invoice to PH would reflect the hours of work he performed and just the word 'materials' [sic]. A total figure would be charged without identifying exactly what those materials were. CH charged GST on top of his hourly rate and for the goods. Attached hereto are some invoices which show same [sic]. These have already been submitted with other 'Invoices' previously sent to the ATO. *Note: CH was not given or did he request, reimbursement and/or an allowance for his phone, car, tools, clothes, etc.*
Were there any services provided by Mr Hargreaves across the length of the arrangement that necessarily required a different rate or remuneration.	CH was paid as per the invoices provided to PH for payment. Over the years he increased his hourly rate when he chose to. There was no discussion with PH in this regard, as CH was a sub-contractor who could charge a rate which was decided by him. There was an occasion where CH charged nearly double for his time, as he worked at night and that was his going rate.
You have contended that you pay Mr Hargreaves above an award rate as a maintenance plumber. Can you explain the basis for the difference between his hourly rate and what you contend is the award rate.	CH was paid above the award rate as shown in the attached 'Plumbers award under Fair Work Ombudsman'. These have already been provided within the submission to the ATO previously. The comparison between Full Time/Casual for an employee shows there is a significant difference between the award for each year and what CH invoiced as his hourly rate. The rate charged by CH did not include GST which was charged extra on the Invoices provided by CH for materials was plus GST. For instance, on 1/7/20 CH invoiced his rate $55 per hour plus $5.50 GST. The actual hourly rate paid was then $60.50 with the award rate for that year being $35.81.
For the relevant periods, as you had stated that there had been 10 pay increases, were they increased in consultation with you, or you allowed it according to his request? Was there ever a time when you advised that you cannot increase to his request and offered another amount? a. Do you have any records showing when these increases occurred or the reasoning for each increase?	PH doesn't have a record of 10 pay increases. PH was only aware of what CH charged as an hourly rate for his service, when he received an invoice from CH. There was no discussion in relation to increasing his rate, as CH was a subcontractor and did the work on a do and charge basis and his hourly rate was determined by him. As to any records showing when CH increased his rates, this information is within the invoices already provided to the ATO. A spreadsheet (already submitted) is attached hereto showing the increases over the years.

17. On 16 December 2022 the ATO advised the Applicant that they had considered the objection and determined that Mr Hargreaves was an employee of the Applicant for the purpose of the SGAA and that therefore the Applicant had an obligation to pay superannuation contributions on their behalf.^[25] T-Docs, T21.

18. On 16 December 2022 the Applicant applied to this Tribunal for review of the ATO's decision.^[26] T-Docs, T1. The Tribunal has jurisdiction to review decisions under the SGAA pursuant to s 25 of the Administrative Appeals Tribunal Act 1975 (Cth), s 42 of the SGAA and Part IVC of the Taxation Administration Act 1953 (Cth) ( TAA ).

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ISSUES FOR THE TRIBUNAL

19. The issue for the Tribunal is whether the Applicant has discharged its burden of proving that the amended assessments are excessive or otherwise incorrect and what the assessments should have been: s 14ZZK(b)(i), TAA.

20. The answer to this issue depends on whether the Applicant was an employer of Mr Hargreaves according to s 12(3) of the SGAA during the Relevant Periods.

SUPERANNUATION REGIME

21. The purpose of the superannuation scheme (which includes the SGAA) was described by the Full Federal Court in
Jamsek v ZG Operations Australia Pty Ltd (No 3) [2023] FCAFC 48; 296 FCR 336 (" Jamsek ") as being:

46. … to secure Australian workers with a minimum level of superannuation by the application of a charge to all employers in respect of their individual employees, through an efficient mechanism based on self-assessment and administration by employers and the Australian Taxation Office …^[27] Citing Bluescope Steel (AIS) Pty Ltd v Australian Workers’ Union [2019] FCAFC 84 ; (2019) 270 FCR 359 at 373 [43] (Allsop CJ), 428 [258] (Collier J).

Superannuation Guarantee Charge

22. The SGAA establishes and administers the Superannuation Guarantee Scheme, and related purposes.

23. A "superannuation guarantee charge" (" SGC ") is a "charge imposed by the Superannuation Guarantee Charge Act 1992": s 6, SGAA.

24. Pursuant to s 5 of the SGAA, an SGC is imposed on any superannuation guarantee shortfall of an employer for a quarter.

25. An SGC is payable if the minimum amount of the superannuation guarantee for an employee has not been paid into the appropriate superannuation fund by the due date.

26. Pursuant to s 16 of the SGAA, the "Superannuation guarantee charge imposed on an employer's superannuation guarantee shortfall for a quarter is payable by the employer". Only "employers" are liable to pay SGC (see para 31 below).

27. Section 19 of the SGAA provides a formula (based on the "salary or wages" of an employee) to determine the individual superannuation guarantee shortfall.

28. Section 11 of the SGAA provides that "salary or wages" includes, relevantly:

(ba) payments under a contract referred to in subsection 12(3) that are made in respect of the labour of the person working under the contract…

29. Superannuation guarantee is not payable other than for "employees".

30. Pursuant to s 36 of the SGAA, where an employer has not lodged a superannuation guarantee statement for a quarter and the Commissioner is of the opinion that the employer is liable to pay SGC for the quarter, the Commissioner may make a default assessment of the amount that should have been paid (i.e. the superannuation guarantee shortfall).

Who is an "Employer" and "Employee" for the purpose of the Superannuation Guarantee Scheme?

31. For the superannuation guarantee scheme, s 12 of the SGAA defines "employer" and "employee" relevantly as follows:

12 Interpretation: employee, employer

(1) Subject to this section, in this Act, employee and employer have their ordinary meaning. However, for the purposes of this Act, subsections (2) to (11):

(a) expand the meaning of those terms; and

(b) make particular provision to avoid doubt as to the status of certain persons.

…

(3) If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.

[emphasis added]

32. Subsections 12(2) to (8) of the SGAA expand the ordinary meaning of "employer" and "employee" by deeming certain persons to be employer/employee in specified circumstances.

33. Neither party is relying on the ordinary meaning of employer and employee (s 12(1)).^[28] RSFICS, p 13, para 49.

34.

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The issue here is whether s 12(3) of the SGAA applies to:

(a) deem Mr Hargreaves to be an employee; and
(b) deem the Applicant the employer, and therefore the entity liable to make the SGC payment.

35. It is no longer appropriate, when determining whether an individual is an employee or independent contractor to consider a multifactorial approach in circumstances where there is a written contract (which is not a sham). It is the terms and performance of the contract obligations which are the determinative factors.^[29] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 ; 275 CLR 165 and ZG Operations & Anor v Jamsek & Ors [2022] HCA 2 .

36. In the case of oral agreements, or agreements which are partly oral and partly written, the Court in
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 275 CLR 165 (" Personnel ") noted that there is sometimes uncertainty when assessing these arrangements. The plurality observed at [58]:

Uncertainty in relation to whether a relationship is one of employment may sometimes be unavoidable. …

37. This matter is challenging because the terms were not reduced to writing and the arrangements were entered into some 14 years ago.

Burden of Proof

38. Subsection 14ZZK(b)(i) of the TAA provides that the Applicant has the burden of proving that the assessment is excessive or otherwise incorrect and what the assessment should have been.

39. The standard of proof a taxpayer must meet is the civil standard of the balance of probabilities.^[30] Guardian Ait Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation [2021] FCA 1619 ; 114 ATR 136 at [3] ; McCormack v Federal Commissioner of Taxation (1979) 143 CLR 284 , at 301 per Gibbs J; Condon v Commissioner of Taxation [2023] FCA 561 , at [57] ; Commissioner of Taxation v Cassaniti [2018] FCAFC 212 ; 266 FCR 385 , at [88] .

EVIDENCE

40. The Applicant relied on evidence from its director, Mr Peter Hatfield.

41. The Respondent called Mr Hargreaves to give evidence.

Peter Hatfield ^[31] Witness Statement dated 26 April 2024.

42. Mr Hatfield stated:

(a) Mr Hargreaves approached him about becoming a subcontractor in 2010.
(b) Mr Hargreaves told him he wanted to pursue a career in the film and television industry and build up his own business;
(c) Mr Hargreaves had obtained a Queensland Building and Construction Commission QBCC Plumber & Drainage Licence ( QBCC Licence ) as a Trade Contractor. Pursuant to QBCC Roles and Responsibilities of a Licence Holder:

''A Contractor (Trade Contractor's Licence) can contract directly for Building work as an individual (sole trader, partner, trustee). A Licenced Nominee Supervisor, Site Supervisor and Occupational Licence is an Employee''
(d) Mr Hargreaves was engaged on a "do and charge" basis;
(e) Mr Hargreaves set his own hourly rate which he increased a few times between 2010 and 2020;
(f) if there was work, he would contact Mr Hargreaves and Mr Hargreaves would tell him if he was available;
(g) between 2010 and 2020, he sub-contracted Mr Hargreaves to perform mostly maintenance jobs which only involved a few hours work each time;
(h) Mr Hargreaves requested that he put in an invoice for payment at the end of any week in which he had been engaged;
(i) Mr Hargreaves had an accident sometime between December 2013 and April 2014 and was unable to work. During that time Mr Hargreaves was compensated by Workcover;
(j) there were long periods when Mr Hargreaves was unavailable and did not do any work for him;
(k) Mr Hargreaves was not an employed Foreman on any jobs;
(l) in relation to a job performed at Allamanda Hospital, Mr Hargreaves was one of about 10 sub-contractors engaged by the Applicant for that site;
(m) Mr Hargreaves used his own tools on a job, which he purchased and maintained himself;
(n) occasionally the Applicant would supply specialised large equipment if necessary;

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(o) Mr Hargreaves advertised his own business "Backflow" on his work van and had business cards for various other trade names such as "Resort Plumbing" and "Sandy Point Plumbing".

43. During cross-examination Mr Hatfield confirmed the evidence given in his written statement.

44. In addition, Mr Hatfield clarified the following about his arrangements with Mr Hargreaves:

(a) a plumber cannot engage in sub-contractor work without a QBCC licence. Mr Hargreaves' QBCC Licenced Trade Contractor for Plumber & Drainage, Gasfitter, Fire Protection (install and maintain) and Backflow licence enabled him to operate as a sub-contractor. Mr Hargreaves could not operate as a sub-contractor without these Licences;^[32] Transcript ( TR ), page 8, page 28.
(b) Mr Hargreaves provided job/time sheets recording the details of what work was done and the hours spent on each job;^[33] TR, page 8.
(c) he did not supervise Mr Hargreaves or advise him how to do the work. Mr Hatfield explained - "[Mr Hargreaves is] engaged as a plumber, he's a licensed [plumber];"^[34] TR, page 10.
(d) Mr Hargreaves was expected to do the job unsupervised;^[35] TR, page 11.
(e) Mr Hargreaves was operating his own business at the same time as he was contracting with the Applicant;^[36] TR, page 10.
(f) Mr Hargreaves had his own plumbing tools;^[37] TR, page 10.
(g) Mr Hargreaves did not invoice the Applicant for his tools;^[38] TR, page 11.
(h) Mr Hargreaves had his own work vehicle which he used to transport himself and his tools to each job he agreed to do for the Applicant;^[39] TR, page 11.
(i) Mr Hargreaves organised his own insurance;^[40] TR, page 28.
(j) Mr Hargreaves was engaged to complete each job he accepted;^[41] TR, page 11.
(k) Mr Hatfield did not recall discussing delegation rights with Mr Hargreaves at the time of entering into the initial arrangement in 2010;^[42] TR, page 38.
(l) if Mr Hargreaves had wanted to delegate a job he would have needed Mr Hatfield's permission;^[43] TR, page 23-TR24. and
(m) Mr Hargreaves was paid above award rate.^[44] TR, page 45.

45. Mr Hatfield told the Tribunal Mr Hargreaves was engaged for his specialised skill as a plumber.^[45] TR, page 11.

Christoper Hargreaves ^[46] Witness statement dated 26 August 2023.

46. Mr Hargreaves is a licenced plumber.

47. Mr Hargreaves was engaged by the Applicant during the Relevant Periods to perform plumbing work. Mr Hargreaves described a "typical day" in his statement as follows:

A typical day working for the Applicant

5. I would receive instructions from Mr Peter Hatfield ( Mr Hatfield ) face to face, via phone, or on site.

6. I would be given an address, description of the work required, and time that work was to be carried out, which I wrote in a diary.

8. I was instructed to introduce myself as Chris from Peter Hatfield Plumbing. When Mr Hatfield was away and I had his phone, I would answer it in a similar fashion.

9. The types of jobs I ordinarily undertook for the Applicant included general plumbing maintenance, hospital maintenance, renovations, repairs, and re-fit of commercial premises under the licence and insurance of Peter Hatfield Plumbing.

10. The materials I used were on the Applicant's supplier's account. When the Applicant could not source specific materials, I would source them and include them in my invoices.

11. The materials included in my invoices were mostly oxyacetylene.

12. If I was unable to complete a job, I would let Mr Hatfield know, and either Mr Hatfield or another person working for the Applicant would complete it.

13. To my recollection, there were only two occasions when I did not accept work offered to me by the Applicant. On those

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occasions, the Applicant reassigned the work, and I was assigned different jobs.

14. I worked alone or with other tradespeople on site. At times when two people were required, I would work with Mr Hatfield or the Applicant's other worker, Brendan.

48. Mr Hargreaves stated he used his own standard set of plumbing tools to perform the work and on some occasions, he would have to use more specialised equipment obtained from the Applicant.

49. In relation to invoicing and payment Mr Hargreaves stated:

(a) he agreed to a fixed hourly rate of pay;
(b) the agreement was verbal;
(c) occasionally he would be paid double time;^[47] T-Docs, T7.8.
(d) during the 10 years he worked for the Applicant, there was only one pay increase negotiated;
(e) he did not issue quotes to the Applicant for work to be performed;
(f) he recorded the hours worked on an Individual Job Sheet;^[48] Annexure CH-3 to the witness statement is a copy of a blank Job Sheet.
(g) he submitted a Daily Run Sheet listing the day, jobs completed, and the hours spent on site.^[49] Annexure CH-4 to the witness statement is a copy of a blank Daily Run Sheet.
(h) he submitted an invoice to the Applicant each week;
(i) the Applicant paid him according to the invoices by direct transfer into his bank account within seven days;
(j) he did not receive pay slips;
(k) he charged and was paid according to hours worked, not according to whether a job had been completed;
(l) there were never any discussions about whether he could delegate his work; and
(m) during the time he worked for the Applicant, he never delegated any work.

50. During cross-examination Mr Hargreaves confirmed the following matters regarding his arrangement with the Applicant:

(a) he charged GST on his invoices to the Applicant;
(b) he paid his own GST and submitted BAS statements;^[50] TR, page 65.
(c) he had his own clients separate from the Applicant;
(d) at the time of entering into the arrangement with the Applicant he did not want full-time employment because he wanted to be able to complete other work and operate his plumbing business;^[51] TR, page 62.
(e) he was paid above award rate;^[52] TR, page 64.
(f) he owned his own work vehicle;^[53] TR, page 65.
(g) he paid for the insurance on his work vehicle;^[54] TR, page 68.
(h) he owned his own plumbing tools worth approximately $6,000 which he used to complete the jobs he accepted from the Applicant;^[55] TR, page 65-66, 81.
(i) if any of his tools broke, he was responsible for their replacement; it was not a cost to be borne by the Applicant;^[56] TR, page 72.
(j) he claimed the cost of his tools as an expense of his business operated under his personal ABN;^[57] TR, page 66.
(k) the Applicant did not issue payslips to him;
(l) the invoices he submitted to the Applicant, together with a job sheet, detailed the number of hours worked to show how many hours he spent on each job;^[58] TR, page 67.
(m) there was no agreement regarding when he would be paid but he was always paid in a timely manner;^[59] TR, page 67.
(n) he was expected to complete each job;^[60] TR, page 69.
(o) if anything at a job needed to be fixed, he would go back and fix it;^[61] TR, page 69.
(p) while working with the Applicant he continued to advertise his own business, including on the side of his work vehicle;^[62] TR, page 69.
(q) the ability to delegate was never discussed;^[63] TR, page 76.
(r) he obtained a QBCC licence prior to working with the Applicant;^[64] TR, page 83. and
(s) the Applicant did not pay him if he went on a holiday.^[65] TR, page 83.

51. Contrary to his written statement (see paragraph 47 above) Mr Hargreaves told the Tribunal he worked independently and unsupervised.^[66] TR, page 68.

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Inaccurate answers given by Mr Hargreaves in the Worker Questionnaire

52. In the Worker Questionnaire Mr Hargreaves was asked whether he could provide his services to other individuals or businesses independently of the Applicant. Mr Hargreaves answered "No". When asked about this at the hearing he clarified that he meant he could not do work for someone else while working for the Applicant. What he meant was he could not be at the same place at the same time.^[67] TR, page 74. In other words the answer Mr Hargreaves should have given to the question was "Yes". He then said the answers to these questions were not "his writing".

53. The Worker Questionnaire asked Mr Hargreaves whether he worked independently from the Applicant's business. The answer given in the questionnaire was "on occasion". Mr Hargreaves said that was not his writing but could not explain who would have written that answer.^[68] TR, pages 74-75.

54. Another question was whether Mr Hargreaves submitted quotes or invoices to the Applicant. The answer given was "No". During cross-examination he grudgingly acknowledged that it was incorrect because he did submit invoices, saying the question was "a bit misleading".^[69] TR, page 82.

55. Another question in the Worker Questionnaire addressed who set the fees. Mr Hargreaves' answer was the Applicant set the fees. This was contrary to his oral evidence that the hourly fee was negotiated.^[70] TR, page 83.

APPLICANT'S CONTENTIONS

56. The Applicant contended the contract was not wholly and principally for Mr Hargreaves' labour and that Mr Hargreaves undertook work as a sub-contractor "to benefit [Mr Hargreaves'] own business operation".^[71] Applicant Outline of Argument, page 1, paragraph 5.

57. The Applicant submits the factors which point to his being an independent contractor include:

(a) having his own tools;
(b) having his own motor vehicle and public liability insurance;
(c) the Applicant did not reimburse Mr Hargreaves for the purchase of his tools;
(d) Mr Hargreaves had total control over when he would work for the Applicant;
(e) Mr Hargreaves had total unsupervised control as to how the work was carried out and what equipment/tools and materials were required to complete each job;
(f) Mr Hargreaves had control of how much he charged the Applicant;
(g) Mr Hargreaves used his own transport to get to/from jobs;
(h) the majority of the jobs Mr Hargreaves was engaged to complete were one-off, urgent, and small maintenance/repair work;
(i) Mr Hargreaves was engaged to complete each job he accepted to achieve a result; and
(j) Mr Hargreaves invoiced the Applicant on a weekly basis at an hourly rate.

58. The Applicant submitted Mr Hargreaves was engaged for his skilled labour as a qualified and licensed plumber, and for the use of his plumbing tools (such as ladders, drills and plumbing items).

59. In addition, Mr Hargreaves:

(a) advertised his own business on the side of his vehicle;
(b) was responsible for his vehicle operating costs i.e.: petrol, registration;
(c) was able to claim tools/equipment and vehicle costs as a business expense and as a business asset; and
(d) did not seek reimbursement from the Applicant for his tools of trade, vehicle, equipment, and operating costs.

60. The Applicant's contract with Mr Hargreaves was one of "contracting for a bundle of services including the Worker's labour, skills, tools and equipment".

61. In relation to the right to delegate, the Applicant submitted that despite Mr Hargreaves not actually delegating any work during the Relevant Period, that did not mean he was unable to delegate.

62. The Applicant referred to Jamsek where the Court stated at paragraph [52]:

A contract that "leaves the contractor free to do the work himself or to employ other persons to carry it out" is not "wholly or principally for the labour of the person ": Neale at 425. It does not matter that "the contractor has himself performed the bulk of the work under the contract or that it was

ATC 13258
the expectation of the parties that he would do so if, in truth, the contract did not create the relationship of master and servant": Neale at 425.

[Tribunal emphasis]

63. In relation to the rate of pay, the Applicant submits that the fact Mr Hargreaves was being remunerated at above award rates is indicative that Mr Hargreaves was a contractor not an employee.

64. The Applicant submits, that on the facts identified above, considering and assessing the whole arrangement between Mr Hargreaves and the Applicant, the relationship is one of contractor and sub-contractor and not one of employer and employee under the extended definition of "employee" provided by s 12(3) of the SGAA.

65. The Applicant submitted that the Tribunal should set aside the Decision by the Respondent.

RESPONDENT'S CONTENTIONS

66. The Respondent submitted that the contract between Mr Hargreaves and the Applicant was wholly for Mr Hargreaves' labour and not for the provision of a result because:

(a) Mr Hargreaves was a party to the contract - as a sole trader and natural person;^[72] T-Docs, T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 pages 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114.
(b) remunerated predominately for his labour;^[73] T-Docs, T7 page 1393; See Annexure A to Respondent Outline of Argument - summary of labour component of amounts paid to Mr Hargreaves.
(c) although Mr Hargreaves was reimbursed for the cost of materials and plant, he paid for to complete a job, the labour component always substantially exceeded the cost of such plant and materials;
(d) Mr Hargreaves was required to perform the work personally - the Applicant did not engage him unless he was available to perform the work;^[74] T-Docs, T5 page 37; T7 page 1389; T14 page 2061.
(e) it is unlikely that Mr Hargreaves could delegate the work;
(f) Mr Hargreaves was not paid to achieve a specific result - he was remunerated on an hourly rate; the fee payable was predominately calculated based on the hours worked;
(g) invoices were submitted weekly and often referenced numerous jobs;^[75] T-Docs, T5 page 36; T7 page 1387; T14 pages 2069-2070.
(h) Mr Hargreaves was also paid for the hours spent at call outs at which work could not be undertaken as the client was not home.^[76] T-Docs, T14 page 2061.

CONSIDERATION

67. Neither party is relying on the ordinary meaning of employer and employee.^[77] TR20. The issue is whether the expanding provision in s 12(3) applies.

68. The purpose of the deeming provisions in ss 12(2)-(8) is to bring people into the SGC scheme as liable employers who may not otherwise have been. It extends the liability to make SGC payments.

Construction of s 12 of the SGAA

General Principles

69. The phrase "wholly and principally for the labour of the person" is not defined in the SGAA and therefore should be given its ordinary meaning "in light of its context and purpose".^[78] SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 ; (2017) 262 CLR 362 at [14] ; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] ; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 ; (2009) 239 CLR 27 at 31 [4], 46-47 [47] ; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55 ; (2012) 250 CLR 503 at 519 [39] ; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 ; (2017) 262 CLR 362 at 368 [14] .

70. The ordinary meaning of a word must be taken as its ordinary meaning within the purpose and context of the legislative scheme in which it is found.^[79] Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58 ; 224 CLR 193 at 230 [124] . This is set out in s 15AB of the Acts Interpretation Act 1901 (Cth) ( AIA ) which provides relevantly that:

(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:

(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act.

[emphasis added]

71. That extrinsic material may be used is reflected in s 15AA of the AIA which provides:

In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in

ATC 13259
the Act) is to be preferred to each other interpretation.

72. Although extrinsic materials may be used, they
"cannot displace the meaning of the statutory text": Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55;
(2012) 250 CLR 503, at 519 [39].

73. The Second Report of the Senate Select Committee on Superannuation, Superannuation Guarantee Bills (June 1992), noted (at page 146) that s 12(3) was "designed to include a person who may not be an employee in the normal sense but who is not very distinguishable from an employee."

SGR 2005/1 - Who is an employee

74. Superannuation Guarantee Ruling, "SGR 2005/1 - Who is an employee" ( SGR 2005/1 ), published by the ATO, sets out the Commissioner's view as to when an individual is considered to be an "employee" under s 12 of the SGAA.^[80] This Ruling is being reviewed in light of the decisions of the High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 . This ruling is now withdrawn and is instead incorporated into proposed draft Appendix 2 of draft ruling TR 2023/4DC1 Income tax and superannuation guarantee: who is an employee?

75. In relation to s 12(3), SGR 2005/1 states:

78. Where the terms of the contract in light of the subsequent conduct of the parties indicates that:

• the individual is remunerated (either wholly or principally) for their personal labour and skills;

• the individual must perform the contractual work personally (there is no right of delegation); and

• the individual is not paid to achieve a result (paragraphs 43 to 47 discuss when a contract is one to achieve a result), ^[81] See Neale v Atlas Products (Vic) Pty Ltd [1955] HCA 18 ; 94 CLR 419 , at 426 .

the contract is considered to be wholly or principally for the labour of the individual engaged and he or she will be an employee under subsection 12(3).

…

87. … subsection 12(3) is limited to contracts wholly or principally for a person's labour.

[emphasis added]

76. In relation to the relevance of the right to delegate SGR 2005/1 provides:

Whether the work can be delegated or subcontracted

48. The power to delegate or subcontract (in the sense of the capacity to engage others to do the work) is a significant factor in deciding whether a worker is an employee or independent contractor. If a person is contractually required to personally perform the work, this is an indication that the person is an employee.

49. If an individual has unlimited power to delegate the work to others (with or without the approval or consent of the principal), this is a strong indication that the person is being engaged as an independent contractor. Under a contract for services, the emphasis is on the performance of the agreed services (achievement of the 'result'). Unless the contract expressly requires the service provider to personally perform the contracted services, the contractor is free to arrange for his or her employees to perform all or some of the work or may subcontract all or some of the work to another service provider. In these circumstances, the contractor is the party responsible for remunerating the replacement worker.

[emphasis added]

77. In relation to "results" contracts SGR 2005/1 provides (citations omitted):

42. Where the substance of a contract is to achieve a specified result, there is a strong (but not conclusive) indication that the contract is one for services. In World Book (Australia) Pty Ltd v. FC of T Sheller JA said:

Undertaking the production of a given result has been considered to be a mark, if not the mark, of an independent contractor…

43. The phrase 'the production of a given result' means the performance of a service by one party for another where the first-mentioned party is free to employ their own means (such as third party labour, plant and equipment) to achieve the contractually specified outcome. Satisfactory completion of the specified services is the 'result' for which the parties have bargained . The consideration is often a fixed sum on completion of the particular

ATC 13260
job as opposed to an amount paid by reference to hours worked. If remuneration is payable when, and only when, the contractual conditions have been fulfilled, the remuneration is usually made for producing a given result.

44. In contracts to produce a result, payment is often made for a negotiated contract price, as opposed to an hourly rate. For example, in Stevens v. Brodribb, payment was determined by reference to the volume of timber delivered, and in Queensland Stations where it was a fixed sum per head of cattle delivered.

45. Having regard to the true essence of the contract, the manner in which payment is structured will not of itself exclude genuine result based contracts . For example, there are results based contracts where the contract price is based on an estimate of the time and labour cost that is necessary to complete the task, or may even be calculated on that basis, subject to reasonable completion times.

46. While the notion of 'payment for a result' is expected in a contract for services, it is not necessarily inconsistent with a contract of service. The High Court in FC of T v. Barrett & Ors found that land salesmen, who were engaged by a firm of land agents to find purchasers for land entrusted to the firm for sale and who were remunerated by commission only were employees and not independent contractors. Likewise, the High Court in Hollis v. Vabu considered that payment to the bicycle couriers per delivery, rather than per time period engaged, was a natural means to remunerate employees whose sole purpose is to perform deliveries. Further, the Full Court of the Supreme Court of South Australia in Commissioner of State Taxation v. The Roy Morgan Research Centre Pty Ltd found that interviewers who were only paid on the completion of each assignment, not on an hourly basis, were employees and not independent contractors.

47. Accordingly, the contractual relationship as a whole must still be considered to determine the true character of the relationship between the parties.

78. Draft ruling TR 2023/4DC1 Income tax and superannuation guarantee: who is an employee? has recently been released by the ATO for comment. It provides the following in relation to "results contracts" (this draft is intended to be an updated version of the SGR2005/1 incorporating recent decisions discussed elsewhere in this decision):

'Results' contracts

59. Where the substance of a contract is to achieve a specified result, there is a strong (but not conclusive) indication that the contract is one for services. The reference to a 'result' in this context is the performance of a service by one party for another where the first-mentioned party is free to employ their own means (such as third-party labour, plant, and equipment) to achieve the contractually specified outcome. Satisfactory completion of the specified services is the 'result' for which the parties have bargained.

60. The way in which a worker is remunerated for their services, and the process through which the parties determine this remuneration, can help to identify whether a worker is being engaged to serve in an engaging entity's business or has merely contracted with that business to produce a specified result.

61. Consideration for a specified result is often a fixed sum paid on completion of the particular job as opposed to an amount paid by reference to hours worked, activities performed or a commission.

62. In contracts to produce a result, payment is often a negotiated price for the specified outcome. For example, in Stevens, payment was determined by reference to the volume of timber delivered and in Queensland Stations Pty Ltd v Federal Commissioner of Taxation, it was a fixed sum per head of cattle delivered. A payment is more likely to be for a result if it bears little to no reference to the time spent working to produce the outcome.

63. However, 'piece-rate' or 'output-based' payment models are often consistent with an employment relationship if they are simply a natural means to remunerate the

ATC 13261
particular kind of task the worker is performing. Often in these cases, the employee is paid per discrete task because of one or more of the following factors: • the sole duty of the employee is to complete the task • it is easier to calculate remuneration based on task completion • the amount per task is calculated by reference to the period worked or by reference to time variables (for example, effort, speed and waiting times), or • paying per task is used as a means to increase productivity.

64. Key examples of non-hourly remuneration models that have been found to be consistent with employment include: • land salesmen, who were engaged by a firm of land agents to find purchasers for land entrusted to the firm for sale and who were remunerated by commission only • bicycle couriers paid a flag fall rate per delivery, rather than per time period engaged• fruit pickers paid daily per bin of fruit picked • interviewers who were only paid a fixed rate on the completion of each assignment that was determined by reference to the time expected to complete the assignment.

65. The Full Federal Court in JMC observed that the manner in which a lecturer was remunerated for his teaching services, being paid an amount per hour for giving a lecture and a different amount per hour for marking, was 'not inherently incompatible with either an employment relationship, or an independent contract relationship' although they were inclined to it favouring an independent contractor relationship. We note that this observation of the Full Federal Court was made in the context of the facts of JMC, where a number of the terms of the relevant written contract were considered to favour against a finding of an employment relationship.

[citations omitted]

Judicial Consideration of s 12(3)

79. The Full Federal Court has held that:^[82] Commissioner of Taxation v Scone Race Club Limited [2019] FCAFC 225 ; 374 ALR 189 ; Commissioner of Taxation v Racing Queensland Board [2019] FCAFC 224 .

[10] … ss 12(2) to (11) should be construed as expanding (or clarifying) in a coordinated way the meaning of both "employee" and "employer"

80. There are construction principles to follow in construing deeming provisions.

81. A deeming provision is to be construed "strictly" and "only for the purpose for which [it is] resorted to":
Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 at 96;
64 ALR 451, at 458.^[83] Commissioner of Taxation v Glencore Investment Pty Ltd [2020] FCAFC 187 ; 281 FCR 219 , at [155] .

82. The High Court noted in
Maroney v The Queen [2003] HCA 63; 216 CLR 31 that it should be remembered:

11…The effect of statutory deeming provisions is often to arrive at results quite different from those which the ordinary meanings of words would produce.

83. The Full Federal Court in
Dental Corporation Pty Ltd v Moffet [2020] FCAFC 118; 278 FCR 502 (" Moffet ") determined that for s 12(3) to apply the following elements must exist:^[84] Dental Corporation Pty Ltd v Moffet [2020] FCAFC 118 ; 278 FCR 502 per Perram and Anderson JJ at [82] and Wigney J at [111] and [117].

(a) a "contract";
(b) the contract must be "wholly or principally for the labour" of a person; and
(c) the person must "work" under that contract.

84. Subsection 12(3) of the Act was considered recently in Jamsek. The issue before the Court on the remitted appeal was whether the primary judge was correct to find that Mr Jamsek and Mr Whitby did not fall within the extended definition of "employee" for the purposes of s 12(3) of the SGAA. The Full Federal Court held s 12(3):

[31] … contemplates the relevant contract as having two sides to the contract

[32] requires a bilateral exchange of promises of labour and payment between two sides of the contract…

[33] suggests that it operates only when an individual, (i.e. a natural person) in that capacity, works under a contract.

[36] … is not satisfied where a contract is properly characterised as being for the provision of a result and not for labour ^[85] Citing Neale at 425; World Book (Australia) Pty Ltd v Commissioner of Taxation (FCT) (1992) 27 NSWLR 377 at 382, 385-386 ; JMC Pty Ltd v Commissioner of Taxation [2022] FCA 750 at [31], [195] ; Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 96 ATC 4898 at 4903 , special leave refused: Federal Commissioner of Taxation v Vabu Pty Ltd (1997) 35 ATR 340 ; Hollis v Vabu Pty Ltd [2001] HCA 44 ; (2001) 207 CLR 21 ( Hollis v Vabu ) at 48 [68].

[40] … is only capable of operating where: (a) an identified natural person (the Worker) is a party to a contract in their individual capacity; (b) the Worker works under the contract; and (c) the party on the other side of the contract makes payments to the

ATC 13262
Worker in respect of their labour under the contract.

Element 1 - there must be a contract

85. There was an oral arrangement between the Applicant and Mr Hargreaves. Both parties to the arrangement agreed there was a contract.

Element 3 - the person must "work"

86. There is no dispute that Mr Hargreaves was engaged in work, and that this element is satisfied.

Element 2 - Was the Applicant's engagement of Mr Hargreaves "wholly or principally" for his labour?

87. "Principally" ordinarily means chiefly or mainly:
Federal Commissioner of Taxation v Commonwealth Aluminium Corporation Limited [1980] HCA 28;
(1980) 143 CLR 646 at 658.^[86] See also Gray v Mercantile Mutual Insurance (Australia) Limited (1994) SASR 154 at 159 citing Lockhart J in Parker Pen (Australia) Pty Ltd v Export Development Grants Board [1983] FCA 77 ; (1983) 67 FLR 234 at 240-241 ; Cascade Brewery Co Pty Ltd v Commissioner of Taxation [2006] FCA 821 ; (2006) 153 FCR 11 at [25] per Sundberg J.

88. In Jamsek the Court said, at [49]-[50], whether the contract is wholly or principally "for" the labour of the person, "is to be assessed from the perspective of the putative "employer" and "determined by reference to [the] terms" of the contract". The Court in Jamsek identified that the degree of control and the right to delegate were key features indicating a contract was not "wholly or principally for the labour" of a person (at [51]-[52]):

A contract that "leaves the contractor free to do the work himself or to employ other persons to carry it out" is not "wholly or principally for the labour of the person ": Neale at 425. It does not matter that "the contractor has himself performed the bulk of the work under the contract or that it was the expectation of the parties that he would do so if, in truth, the contract did not create the relationship of master and servant": Neale at 425.

A contract "whereby the contractor has undertaken to produce a given result" is also not "wholly or principally for the labour of the person ": Neale at 425. It follows from the above analysis, that "s 12(3) only applies in relation to contracts for the personal performance of work by the worker who is a party to the contract": On Call at [309] per Bromberg J.

[emphasis added]

89. In
JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76; 297 FCR 600 (" JMC ") the Full Federal Court referred to the principles summarised by the primary judge arising from Personnel Contracting and Jamsek in relation to determining the characterisation of a service contract relationship. The following principles are relevant here (citations removed):

[18] … in order to ascertain the relevant legal rights and obligations, the contract of employment must be construed in accordance with the established principles of contractual interpretation … regard may be had to the circumstances surrounding the making of the contract, as well as to events and circumstances external to the contract which are objective, known to the parties at the time of contracting and which assist in identifying the purpose or object of the contract … The nature of the specific job that the putative employee applied for and the nature and extent of any tools or equipment they have to supply for that job may also be relevant : … It is, however, generally not legitimate to use in aid of the construction of a contract anything which the parties said or did after it was made.

[19] … the characterisation of the relationship between the parties is not affected by circumstances, facts or occurrences arising between the parties that have no bearing on their legal rights: … A "wide-ranging review of the entire history of the parties' dealings" is neither necessary nor appropriate …

[20] … the fact that a particular contractual right may have never been exercised or utilised, will generally be irrelevant when it comes to characterising the relationship …

[21] … contractual provisions that may be relevant in determining the nature of the relationship include, but are not limited to, those that deal with the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision for holidays, the deduction of income tax, the delegation of work and the right to exercise direction and control …

ATC 13263
[22] … the indicia which suggested an employment relationship included "the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like ", whereas those that suggested a contract for services included "work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax ". …

[23] … the characterisation of the relationship … often hinges on two considerations . The first consideration is the extent to which the putative employer has the right to control how, where and when the putative employee performs the work : … The second is the extent to which the putative employee can be seen to work in his or her own business, as distinct from the business of the putative employer - … Neither of those considerations are determinative and both involve questions of degree .

[24] … As for the element of control, "the existence of a right of control by a putative employer over the activities of a putative employee serves to sensitise one to the subservient and dependent nature of the work of an employee, so as to assist in an assessment of whether a relationship is properly to be regarded as a contract of service rather than a contract for services " …

…

[27] … The characterisation of a relationship as being either one of employer and employee, or one involving the engagement of an independent contractor, is ultimately an evaluative judgment that takes into account the totality of the parties' contractual rights and obligations. The exercise may not necessarily be straightforward … Some degree of uncertainty is unavoidable, particularly in the case of many modern-day work or service contracts .

[emphasis added]

90. The contract must be characterised at the date it was entered into: Personnel Contracting, at [174].

Agreed Facts

91. The following facts are not disputed.

92. During the Relevant Periods the Applicant, as corporate trustee for the Peter Hatfield Trust, carried on a plumbing business in Queensland.^[87] T-Docs, T1 page 1; T7 page 1379; T11 page 1984.

93. Mr Peter Hatfield is the sole director of the Applicant and its principal employee.^[88] T-Docs, T1 page 1; T7 page 1381; T11 page 1984.

94. Mr Hatfield was a maintenance plumber.^[89] T-Docs, T9 page 1407.

95. Although this matter is concerned with the Relevant Periods only, the parties acknowledge that:

(a) during the mid-1990s Mr Hargreaves was an "employee" of the Applicant;^[90] T-Docs, T1 page 4; T5 pages 32 and 41; T7 page 1984; T14 page 2057.
(b) operated and traded under his own business before and during the Relevant Periods.^[91] Credit Application Forms (2) produced under a Summons by Reece Pty Ltd, show that Mr Hargreaves applied for Credit under his business as a Sole Trader (Plumber), in 1992 and 2008.

96. Mr Hargreaves was engaged as a QBCC Licenced Trade Contractor for Plumber & Drainage, Gasfitter, Fire Protection (install and maintain) and Backflow. Mr Hargreaves could not have performed the plumbing services without appropriate qualifications and a QBCC licence.

97. The Queensland Building and Construction Commission Act 1991 (Qld) (" QBCC Act ") requires plumbing work to be carried out by Licenced Plumbers only.

98. Mr Hargreaves commenced working for the Applicant again in 2010 as a maintenance plumber under a verbal agreement.^[92] T-Docs, T5; T7 page 1380.

99. There was no written contract.^[93] T-Docs, T5 page 32; T7 page 1380; T14 page 2057.

100. Mr Hargreaves:

(a) worked for the Applicant in his own name under an ABN;^[94] T-Docs, T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 page 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114.
(b) the ABN used was the same ABN used by Mr Hargreaves' plumbing services

ATC 13264
business;
(c) claimed GST from the Applicant;
(d) was engaged by the Applicant under his QBCC Licence to undertake plumbing drainage and gas fitting work on a "do and charge basis".^[95] T-Docs, T7 page 1393.
(e) was engaged when the Applicant was unable to do the work;
(f) would be offered a job which Mr Hargreaves could either accept or reject;^[96] T-Docs, T14 page 2066; T11 page 1992; T11 pages 1987 and 1992.
(g) was not required to and did not quote on jobs;^[97] T-Docs, T5 page 36; T7 page 1386; T14 page 2060.
(h) charged the Applicant for the time spent on each job at a fixed hourly rate;^[98] T-Docs, T5 page 36; T7 page 1386; T14 page 2060; T5 page 41; T7 page 1380; T5 page 36; T7 page 1387
(i) was also paid if he attended a home to complete a job and the owner was not home;^[99] T-Docs, T14 page 2061.
(j) usually sent the Applicant invoices on a weekly basis (with his timesheets and job sheets attached);^[100] T-Docs, T7 page 1380; T11 page 1987; T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 page 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114; T7 pages 1356-1357; T9 pages 1898-1921; T11 page 1993; T14 pages 2107-2118; T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 page 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114; T14 pages 2069-2070.
(k) charged the Applicant if he had to purchase any necessary materials to complete a job;^[101] T-Docs, T7 page 1392; T14 pages 2067-2069; T5 page 39; T7 page 1393; T11 pages 1990 and 1992; TR9.
(l) used his own tools and work vehicle to undertake the work; and
(m) claimed any expenses against his business earnings under his ABN.

101. The jobs accepted by Mr Hargreaves were mainly small jobs lasting from one hour to a few days to complete.^[102] T-Docs, T14 pages 2069-2070.

102. The Applicant paid the invoices by deposit into Mr Hargreaves' bank account.^[103] T-Docs, T5 page 36; T7 page 1387; T14 page 2061.

Disputed Facts

Rate and Mode of Pay

103. The Full Court in JMC said (at [45]) the fact that a person is paid by the hour may not be a strong indicator either way in the circumstances of the case. That is, whether paid by the hour or paid for a result, the mode of payment is not "inherently incompatible with either an employment relationship, or an independent contractor relationship, and minds can reasonably differ as to the relationship with which it better aligns".

104. The parties do not agree who set the hourly rate of pay. Mr Hargreaves has given two different answers to this question. One answer was the Applicant set the rate; the other was that the rate was negotiated. The Applicant states that Mr Hargreaves set the rate.^[104] T-Docs, T5 page 36; T7 page 1387; T14 page 2060.

105. Initially, Mr Hargreaves sought to dispute whether the rate changed once or several times over the Relevant Periods.^[105] T-Docs, T5 page 32; T7 page 1380; T5 page 36; T7 page 1387; T14 page 2057. At the hearing he accepted it had varied and that it was based on discussions he had with Mr Hatfield.^[106] TR64.

106. Invoices before the Tribunal indicate the rate payable did increase several times during the Relevant Periods and those invoices were paid.

107. The hourly rates were significantly above award rates and were clearly agreed to by both parties. Mr Hatfield explained why the Applicant paid higher than award rates:^[107] TR45.

Why is that?---Well, it was to compensate for his superannuation.

Just explain what you mean by that?---Well, in the - in the plumbing industry, you subcontract plumbers, and then why they're paid over the rate is to - what they do with their own money, because that's what - - -

I see. Because you're not providing that to them?---That's it. That's it.

So is that pretty common, is it, in the industry - - -?---It would be. Yes.

- - - that, if you're subcontracting, you pay them higher than you would at employee rate?---That's right.

108. The hourly rate of pay changed as reflected in the invoices. The increased rates were accepted by the Applicant as evidenced by the payment of Mr Hargreaves' invoices.

109. The Tribunal considers that the most likely scenario (remembering that the contract was entered into some 14 years ago and recollections may not be entirely accurate) is that Mr Hargreaves suggested an hourly price and the Applicant accepted it.

110. Mr Hargreaves was not simply paid by the hour for his time. He was paid for each job completed. The hourly rate was simply an effective measure by which to charge for each job. All invoices set out the hours spent on each job, and he was paid for those jobs accordingly.

111. The parties agreed Mr Hargreaves was engaged on a "do and charge" basis. This is a common practice in the trade industry. That is, Mr Hargreaves was paid for time spent on each job, rather than on a fixed fee per job. No

ATC 13265

quotes were given. This structure is common in situations where the exact cost is unknown (as was explained by Mr Hatfield ^[108] TR10. ). It is implied that the amount charged will be reasonable.^[109] Krahe v Manfate Pty Ltd [2016] NSWCA 363 , at [44] ; MMIR Pty Limited v Iskra [2019] NSWSC 35 , at [28] . The parties trusted each other having known each other for some time.

Tools and Equipment

112. Mr Hargreaves' invoices do not show any claim for tools as an expense, but some invoices provide for plant used in jobs.^[110] T-Docs, T5 page 43-477, see pages 115-117 for examples of charges for plant.

Supervision and Control

113. In relation to "control", this is concerned with telling a person how to perform a job, not simply what job is to be performed.^[111] JMC , [90]-[91].

114. In
Queensland Stations Pty Ltd v Federal Commissioner of Taxation [1945] HCA 13;
(1945) 70 CLR 539 the High Court had to determine whether moneys paid to drovers under certain agreements were "wages" within the meaning of the Pay-roll Tax Assessment Act 1941-1942 (Cth). The determination involved a consideration of the difference between a contract "for" services and a contract "of" service. The High Court explained that:

An independent contractor undertakes to produce a given result, but is not, in the actual execution of the work, under the order or control of the person for whom he does it.

115. Dixon J said, "a reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract".

116. Under the agreed arrangement, Mr Hargreaves was entitled to refuse a job. There were no repercussions for doing so. Mr Hargreaves was totally in control of the amount of work he accepted, was not directed at how to complete the task and was not supervised.

117. Although initially stating he was supervised, Mr Hargreaves accepted at the hearing that he was not controlled or supervised in how he performed and completed each job.

Right to Delegate

118. The right to delegate or subcontract is an important indication of an independent contractor relationship: JMC, at [73]. In JMC the Court said:

[75] Whatever the precise language deployed in a contract, it is plain enough that, if a person engaged to perform work has a contractual right to have someone else perform that work, that is a matter which at the very least tends against a conclusion that the person is an employee. The existence of the right is inherently inconsistent with an employee relationship. In the absence of significant countervailing considerations, how can you be an employee if, within the scope of the contract, you can lawfully get someone else to perform the entirety of your contractual obligations, whether for a short period, or for a longer period?

119. The parties did not recall expressly contemplating Mr Hargreaves' right to delegate at the time of entering into the contract. Mr Hargreaves states that he could organise his work to be done by other employees of the Applicant when he was not available, but that he was unable to organise his work to be completed by other persons engaged by him without the approval of the Applicant.^[112] T-Docs, T5 page 37. The Respondent asserted the Applicant's evidence about delegation has been inconsistent as follows:

(a) in the Questionnaire the Applicant stated Mr Hargreaves could not delegate his work without consent;^[113] T-Docs, T7 page 1389.
(b) in a letter from the Applicant's legal representatives dated 22 December 2021 the Applicant declared that Mr Hargreaves did have the right to delegate work to others on the grounds that:^[114] T-Docs, T11 page 1993.
- (i) the agreement did not prevent Mr Hargreaves from delegating; and
- (ii) the Applicant did not control or supervise Mr Hargreaves' work.

120. The Applicant contends this does not represent a change in position and was merely a reflection of legal advice received. The Applicant further submits that the fact that Mr Hargreaves did not delegate or request permission to delegate does not necessarily mean he was unable to do so.^[115] T-Docs, T14 pages 2061-2062; T14 page 2070; Applicant’s Statement of Facts, Issues and Contentions (“ ASFICS ”) at para 29 and 31.

121. Both parties accepted during the audit and at the hearing that any delegation would have required the Applicant's consent.

122.

ATC 13266

Such consent may have only been to ensure that whoever took over the work was appropriately licensed.^[116] JMC , [81]. The consent is unlikely to have been directed to anything other than suitability.^[117] JMC , [80]. There is nothing to indicate the Applicant could exercise such consent capriciously or arbitrarily. The Full Court in JMC found such a restriction (that a proposed subcontractor be appropriately qualified) to be unremarkable. The Court in JMC noted that the consent of this nature was:

[81] … to protect the legitimate commercial interests of the other party to ensure that the work can actually be done to the necessary standard, including by reason of regulatory requirements.

123. Does it matter that no work was ever delegated? The Full Court in JMC found the primary judge erred in giving significant weight to his view that the right was not ever likely to be exercised.^[118] JMC , [82]. The Court held:

[83] … it is the existence of the rights which is important, not the question of whether they are likely to be or have in fact been exercised…

124. In
Chiodo v Silk Contract Logistics [2023] FCA 1047 the issue was whether a truck driver was an employee. In that case, the Court found the driver was contracted to produce a result, namely the successful delivery of goods rather than the provision of labour. The contract was verbal and in part implied. Concerning verbal contracts, Kennett J noted the following from the authorities:

[8] … where the contract is not written and its terms are to be inferred in whole or in part from the parties' conduct. The terms of an oral contract may not be limited to express terms; terms may be inferred from the circumstances, including a course of dealing between the parties, or implied where necessary for business efficacy:
Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39;
406 ALR 678 at [21]-[22] (Kiefel CJ and Gageler J).

[9] Where there is no written contract and no evidence of a particular conversation in which a contract was formed orally, evidence of the parties' conduct must necessarily be considered in order to draw inferences as to whether the meeting of minds necessary to create a contract has occurred and what obligations they have thereby undertaken (see Personnel Contracting at [177] (Gordon J, Steward J agreeing)).

[emphasis added]

125. In relation to oral contracts the Full Federal Court in
Efex Group Pty Ltd v Bennett [2024] FCAFC 35; 330 IR 171 (" Efex ") stated that inferences as to the terms of an oral contract may come "from the circumstances, including in whole or in part from the parties' conduct or a course of dealing between them, or implied where necessary for business efficacy:
Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39;
406 ALR 678 at [21]-[22] per Kiefel CJ and Gageler J."^[119] Efex , [9]; see also Personnel Contracting at [56].

126. Having considered the evidence, the Tribunal is not satisfied that it was an express term of the contract that Mr Hargreaves could delegate any work. Further, the available evidence is insufficient to establish such a term could be inferred or implied into the contract.

Engaged to Produce a Result

127. Mr Hargreaves was engaged to produce a result.

128. From the perspective of the Applicant, Mr Hargreaves was engaged because he had an appropriate plumbing licence and equipment to produce a result. The engagements were for ad hoc hours for specific jobs which were to be completed.^[120] TR, page 11; TR, page 69. Mr Hargreaves was required to rectify any faults in his work.

129. In
Performing Right Society Ltd. v. Mitchell and Booker (Palais de Danse) Ltd (1924) 1 K.B. 762 the issue was whether an agreement between band members and a music hall was such that the band were independent contractors or were servants of the defendants. The Court held (at 765-766) that "the question whether a man be a servant or an independent contractor is often a mixed question of fact and law":

[at 768] … An independent contractor is one who undertakes to produce a given result, but so that in the actual execution of the work he is not under the order or control of the person for whom he does it,

ATC 13267
and may use his own discretion in things not specified beforehand …

130. The Court gave some examples of arrangements which were characterised as master, servant or independent contractor:

… whilst a labourer employed to cleanse drains at 5s. for the job was held to be a servant and not a contractor: see Sadler v. Henlock, a plumber called in by a landlord to mend a leaky cistern was held to be an independent contractor and not a servant: see Blake v. Woolf . A licensed drover has been held to be an independent contractor and not a servant: see Milligan v. Wedge, on the ground that he exercised an independent calling. So, too, in Rapson v. Cubitt a gas-fitter was held to be an independent contractor. On the other hand, I conceive that a general manager, at a high salary, of a partnership, or the managing director of a limited company at an even higher salary, are usually servants and not independent contractors, and in many cases a partnership or a limited company has been held liable for their negligence or breach of duty.

131. Sheller JA in the Court of Appeal of the Supreme Court of New South Wales in
World Book (Australia) Pty Ltd v Commissioner of Taxation (1992) 27 NSWLR 377, said (at 385) in a contract for results labour is undertaken not for the principal but for the contracting party himself to produce the result he has contracted to produce.

132. In
Vabu Pty Limited v Federal Commissioner of Taxation (1996) 33 ATR 537, the Court found couriers were engaged to perform a result, namely the delivery of parcels, and this was not properly characterised as an engagement to perform labour.

133. On the evidence available the Tribunal finds Mr Hargreaves was engaged to produce a result. The fact that the work was regular and substantial across the Relevant Periods with regular payments does not mean the relationship was clearly one of master/servant.^[121] Neale v Atlas Products (Vic) Pty Ltd [1955] HCA 18 ; 94 CLR 419 , at 429 . Some of the facts in
Neale v Atlas Products (Vic) Pty Ltd [1955] HCA 18; 94 CLR 419 (" Neale ") are similar to the arrangements in this matter. In Neale (at 427):

… there was substantial regularity, or perhaps continuity, of the relationship-whatever it amounted to in law-between the respondent and each tradesman . The practice was for the respondent to inform a particular trades-man at or towards the end of his previous job that another job was available. It was not, however, established that the respondent had the right to direct the tradesmen to any particular new job and the reasonable inference from the evidence was that there was nothing in their legal relationship to oblige any particular trades- man to undertake or to prevent him from declining any new job . The basis of their relationship, it was said, could be found in a form of document which was tendered in evidence and which, if taken at its face value, indicated clearly that the tradesmen did not become servants of the respondent …

[emphasis added]

134. The facts in this matter are similar to those in
Williams v Trimview Roof Restoration Pty Ltd [2001] WASCA 414 where one of the issues was whether the appellant, a roof plumber, was the respondent's servant or an independent contractor. The court held the plumber was an independent contractor for, among others, the following reasons:

(a) the respondent carried on a business as a roofing contractor and subcontracted the roofing work;
(b) the appellant:
- (i) had his own business;
- (ii) used his own vehicle and tools of the trade;
- (iii) declared his remuneration as a "business income" in his income tax returns;
- (iv) claimed business expenses of maintaining and running his motor vehicle and purchasing protective work clothing;
- (v) nominated work he was prepared to accept;
- (vi) nominated an hourly rate for certain work;
- (vii) supplied his own tools;
  
  ATC 13268
- (viii) represented to the respondent at the time of their engagement that they had their own "workers' compensation cover";
- (ix) was free to engage others to assist him with work he was given;
- (x) was also free to work for other people;
- (xi) was able to refuse work which the respondent offered to him;
(c) the payment the appellant received was against an invoice which he rendered;
(d) the jobs for which the appellant charged and was paid on this invoice were at various places and there was no dispute that the appellant had to get himself to these places if he wished to do the work;
(e) no income tax was deducted from his remuneration; and
(f) there was no provision for sick leave, long service leave or holiday pay in his arrangement with the respondent and no provision for superannuation.

135. On appeal the Court held (at [11]) that the evidence "virtually compelled" a finding that the relationship was that of principal and independent contractor.

Conclusion

136. Although some weight may be given to the intention of the parties, how the parties decide to deal with one another is not decisive. One cannot contract out of statutory obligations.

137. The degree of control that may be exercised over a worker is a "prominent factor" in determining the nature of the relationship. As a skilled, licensed plumber Mr Hargreaves was expected to perform the task at his discretion without supervision.

138. Mr Hargreaves advertised his services outside of his relationship with the Applicant. The evidence indicates Mr Hargreaves was operating his own business.

139. There is evidence Mr Hargreaves performed work for others independently of the Applicant.

140. Mr Hargreaves could refuse to do work. The rate of pay was negotiated and nearly double award rates.

141. Mr Hargreaves lodged BAS for his business and claimed expenses he incurred while performing jobs for the Applicant through his business.

142. As here, the contract in Efex was wholly oral with limited agreed details. The Full Court said in such circumstances that inferences of parties' legal rights must instead be drawn from the evidence of the parties' conduct.^[122] Efex Group Pty Ltd v Bennett [2024] FCAFC 35 ; 330 IR 171 , citing Personnel Contracting at [177]. In Efex the issue was whether a person retained under an oral contract to perform sales and related work for a technology services company was an employee rather than an independent contractor.

143. The Court noted that two factors are often determinative of the characterisation of the relationship ([13]):

(a) the extent to which the putative employer has the right to control how, when and where the putative employee performs the work; and
(b) the extent to which the putative employee can be seen to be working in their own business as distinct from the putative employer's business.

144. As in Efex, the following factors weigh in favour of a finding that Mr Hargreaves is an independent contractor:-

(a) Mr Hargreaves:
- (i) had the "freedom" to refuse a job;
- (ii) had the freedom as to how he completed an accepted job;
- (iii) did not have to devote his entire time to the Applicant's business;
- (iv) provided his own vehicle, telephone and essential tools; and
(b) there were no contractual provisions concerning leave, termination or prohibiting delegation.

145. In addition, it was agreed by the parties (either by verbal agreement or implied) that Mr Hargreaves would:

(a) set his hourly rate;
(b) hold his own insurance;
(c) work on a "do and charge" basis;
(d) invoice the Applicant at the completion of each job for his labour and materials used plus GST;
(e) could decide whether to accept a job if he was requested to do so given his other commitments (including attending to his own clients, working as a stuntman, and travelling interstate);

ATC 13269
(f) would provide his own vehicle, tools, equipment and pay his own operating costs under an ABN and business entity;
(g) was unsupervised on a job; and
(h) would choose how to perform the work, what materials, and/or equipment to use and the hours he took to do so.

146. It was understood Mr Hargreaves had to complete each job he was engaged to perform. That is, Mr Hargreaves was engaged to obtain a result.

147. The fact that Mr Hargreaves may have presented himself at a job as a representative of the Applicant is not incompatible with Mr Hargreaves being an independent contractor.^[123] Efex , [42]; Personnel Contracting at [181].

148. The Applicant carried the onus of establishing that the relationship with Mr Hargreaves did not fall within s 12(3) of the SGAA. The Tribunal finds the Applicant has discharged its onus of proving that its "contracts" with Mr Hargreaves were not wholly or principally for the labour of Mr Hargreaves. The contracts were for the provision of plumbing services to complete specified plumbing jobs, not principally for the labour of Mr Hargreaves.^[124] See JMC , at [106].

CONCLUSION

149. The Applicant has succeeded in discharging its onus of proving that it was not the employer of Mr Hargreaves during the Relevant Periods within the meaning of s 12(3) of the SGAA.

150. The decision under review should be set aside.

DECISION

151. The decision under review is set aside and substituted with a decision that Mr Hargreaves was not an employee of the Applicant under the extended definition contained in subsection 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) for the Relevant Periods and therefore the Applicant did not have a liability to make superannuation contributions on behalf of Mr Hargreaves for the Relevant Periods.

Footnotes

^[1] Section 37 T-Documents ( T-Docs ), T3, p 13.
^[2] T-Docs, T4, page 14-28.
^[3] T-Docs, T5, page 29-42.
^[4] T-Docs, T5.3.
^[5] T-Docs, T5.4.
^[6] T-Docs, T5.12.
^[7] T-Docs, T7.
^[8] T-Docs, T5.13.
^[9] T-Docs, T6.
^[10] T-Docs, T11, page 2006-2012.
^[11] T-Docs, T11.1.7, page 2014.
^[12] T-Docs, T7.10.2; T7.11.2.
^[13] T-Docs, T7.12.
^[14] T-Docs, T8.
^[15] T-Docs, T9.2-9.19.
^[16] T-Docs, T12.
^[17] T-Docs, T11, page 1987.
^[18] T-Docs, T11, page 1992.
^[19] T-Docs, T13.
^[20] T-Docs, T65-T107.
^[21] Respondent Statement of Facts, Issues and Contentions ( RSFICS ), Annexure A.
^[22] T-Docs, T14, T17.
^[23] T-Docs, T19.
^[24] T-Docs, T20.
^[25] T-Docs, T21.
^[26] T-Docs, T1.
^[27] Citing Bluescope Steel (AIS) Pty Ltd v Australian Workers’ Union [2019] FCAFC 84 ; (2019) 270 FCR 359 at 373 [43] (Allsop CJ), 428 [258] (Collier J).
^[28] RSFICS, p 13, para 49.
^[29] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 ; 275 CLR 165 and ZG Operations & Anor v Jamsek & Ors [2022] HCA 2 .
^[30] Guardian Ait Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation [2021] FCA 1619 ; 114 ATR 136 at [3] ; McCormack v Federal Commissioner of Taxation (1979) 143 CLR 284 , at 301 per Gibbs J; Condon v Commissioner of Taxation [2023] FCA 561 , at [57] ; Commissioner of Taxation v Cassaniti [2018] FCAFC 212 ; 266 FCR 385 , at [88] .
^[31] Witness Statement dated 26 April 2024.
^[32] Transcript ( TR ), page 8, page 28.
^[33] TR, page 8.
^[34] TR, page 10.
^[35] TR, page 11.
^[36] TR, page 10.
^[37] TR, page 10.
^[38] TR, page 11.
^[39] TR, page 11.
^[40] TR, page 28.
^[41] TR, page 11.
^[42] TR, page 38.
^[43] TR, page 23-TR24.
^[44] TR, page 45.
^[45] TR, page 11.
^[46] Witness statement dated 26 August 2023.
^[47] T-Docs, T7.8.
^[48] Annexure CH-3 to the witness statement is a copy of a blank Job Sheet.
^[49] Annexure CH-4 to the witness statement is a copy of a blank Daily Run Sheet.
^[50] TR, page 65.
^[51] TR, page 62.
^[52] TR, page 64.
^[53] TR, page 65.
^[54] TR, page 68.
^[55] TR, page 65-66, 81.
^[56] TR, page 72.
^[57] TR, page 66.
^[58] TR, page 67.
^[59] TR, page 67.
^[60] TR, page 69.
^[61] TR, page 69.
^[62] TR, page 69.
^[63] TR, page 76.
^[64] TR, page 83.
^[65] TR, page 83.
^[66] TR, page 68.
^[67] TR, page 74.
^[68] TR, pages 74-75.
^[69] TR, page 82.
^[70] TR, page 83.
^[71] Applicant Outline of Argument, page 1, paragraph 5.
^[72] T-Docs, T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 pages 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114.
^[73] T-Docs, T7 page 1393; See Annexure A to Respondent Outline of Argument - summary of labour component of amounts paid to Mr Hargreaves.
^[74] T-Docs, T5 page 37; T7 page 1389; T14 page 2061.
^[75] T-Docs, T5 page 36; T7 page 1387; T14 pages 2069-2070.
^[76] T-Docs, T14 page 2061.
^[77] TR20.
^[78] SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 ; (2017) 262 CLR 362 at [14] ; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] ; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 ; (2009) 239 CLR 27 at 31 [4], 46-47 [47] ; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55 ; (2012) 250 CLR 503 at 519 [39] ; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 ; (2017) 262 CLR 362 at 368 [14] .
^[79] Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58 ; 224 CLR 193 at 230 [124] .
^[80] This Ruling is being reviewed in light of the decisions of the High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 . This ruling is now withdrawn and is instead incorporated into proposed draft Appendix 2 of draft ruling TR 2023/4DC1 Income tax and superannuation guarantee: who is an employee?
^[81] See Neale v Atlas Products (Vic) Pty Ltd [1955] HCA 18 ; 94 CLR 419 , at 426 .
^[82] Commissioner of Taxation v Scone Race Club Limited [2019] FCAFC 225 ; 374 ALR 189 ; Commissioner of Taxation v Racing Queensland Board [2019] FCAFC 224 .
^[83] Commissioner of Taxation v Glencore Investment Pty Ltd [2020] FCAFC 187 ; 281 FCR 219 , at [155] .
^[84] Dental Corporation Pty Ltd v Moffet [2020] FCAFC 118 ; 278 FCR 502 per Perram and Anderson JJ at [82] and Wigney J at [111] and [117].
^[85] Citing Neale at 425; World Book (Australia) Pty Ltd v Commissioner of Taxation (FCT) (1992) 27 NSWLR 377 at 382, 385-386 ; JMC Pty Ltd v Commissioner of Taxation [2022] FCA 750 at [31], [195] ; Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 96 ATC 4898 at 4903 , special leave refused: Federal Commissioner of Taxation v Vabu Pty Ltd (1997) 35 ATR 340 ; Hollis v Vabu Pty Ltd [2001] HCA 44 ; (2001) 207 CLR 21 ( Hollis v Vabu ) at 48 [68].
^[86] See also Gray v Mercantile Mutual Insurance (Australia) Limited (1994) SASR 154 at 159 citing Lockhart J in Parker Pen (Australia) Pty Ltd v Export Development Grants Board [1983] FCA 77 ; (1983) 67 FLR 234 at 240-241 ; Cascade Brewery Co Pty Ltd v Commissioner of Taxation [2006] FCA 821 ; (2006) 153 FCR 11 at [25] per Sundberg J.
^[87] T-Docs, T1 page 1; T7 page 1379; T11 page 1984.
^[88] T-Docs, T1 page 1; T7 page 1381; T11 page 1984.
^[89] T-Docs, T9 page 1407.
^[90] T-Docs, T1 page 4; T5 pages 32 and 41; T7 page 1984; T14 page 2057.
^[91] Credit Application Forms (2) produced under a Summons by Reece Pty Ltd, show that Mr Hargreaves applied for Credit under his business as a Sole Trader (Plumber), in 1992 and 2008.
^[92] T-Docs, T5; T7 page 1380.
^[93] T-Docs, T5 page 32; T7 page 1380; T14 page 2057.
^[94] T-Docs, T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 page 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114.
^[95] T-Docs, T7 page 1393.
^[96] T-Docs, T14 page 2066; T11 page 1992; T11 pages 1987 and 1992.
^[97] T-Docs, T5 page 36; T7 page 1386; T14 page 2060.
^[98] T-Docs, T5 page 36; T7 page 1386; T14 page 2060; T5 page 41; T7 page 1380; T5 page 36; T7 page 1387
^[99] T-Docs, T14 page 2061.
^[100] T-Docs, T7 page 1380; T11 page 1987; T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 page 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114; T7 pages 1356-1357; T9 pages 1898-1921; T11 page 1993; T14 pages 2107-2118; T5 pages 43 to 477; T5 page 30; T7 pages 1356 and 1358; T7 page 1379; T9 page 1898, 1904, 1909, 1915 and 1921; T14 pages 2107 and 2114; T14 pages 2069-2070.
^[101] T-Docs, T7 page 1392; T14 pages 2067-2069; T5 page 39; T7 page 1393; T11 pages 1990 and 1992; TR9.
^[102] T-Docs, T14 pages 2069-2070.
^[103] T-Docs, T5 page 36; T7 page 1387; T14 page 2061.
^[104] T-Docs, T5 page 36; T7 page 1387; T14 page 2060.
^[105] T-Docs, T5 page 32; T7 page 1380; T5 page 36; T7 page 1387; T14 page 2057.
^[106] TR64.
^[107] TR45.
^[108] TR10.
^[109] Krahe v Manfate Pty Ltd [2016] NSWCA 363 , at [44] ; MMIR Pty Limited v Iskra [2019] NSWSC 35 , at [28] .
^[110] T-Docs, T5 page 43-477, see pages 115-117 for examples of charges for plant.
^[111] JMC , [90]-[91].
^[112] T-Docs, T5 page 37.
^[113] T-Docs, T7 page 1389.
^[114] T-Docs, T11 page 1993.
^[115] T-Docs, T14 pages 2061-2062; T14 page 2070; Applicant’s Statement of Facts, Issues and Contentions (“ ASFICS ”) at para 29 and 31.
^[116] JMC , [81].
^[117] JMC , [80].
^[118] JMC , [82].
^[119] Efex , [9]; see also Personnel Contracting at [56].
^[120] TR, page 11; TR, page 69.
^[121] Neale v Atlas Products (Vic) Pty Ltd [1955] HCA 18 ; 94 CLR 419 , at 429 .
^[122] Efex Group Pty Ltd v Bennett [2024] FCAFC 35 ; 330 IR 171 , citing Personnel Contracting at [177]. In Efex the issue was whether a person retained under an oral contract to perform sales and related work for a technology services company was an employee rather than an independent contractor.
^[123] Efex , [42]; Personnel Contracting at [181].
^[124] See JMC , at [106].

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