Case: Hollis v Vabu Pty Ltd [2001] HCA 44 ; (2001) 207 CLR 21
Outcome: considered
A major legal and factual premise of the BoQ parties' case is that each of the OMB parties who are parties to an OMB Agreement should be classified as an "independent contractor" for the purposes of the Independent Contractors Act . That term is defined by s 4 of that Act but only in a way that declares that an "independent contractor" is not limited to a natural person. It is neither necessary nor appropriate for the purposes of this interlocutory application to reach a concluded view as to meaning of the term. It is enough to observe that, subject the declaration in the definition, the question of whether a party to a contract, corporate or individual, is or is not an "independent contractor" for the purposes of the Independent Contractors Act has been seemingly left by the Parliament to be determined having regard by analogy to principles of the common law developed in modern times by cases such as Hollis v Vabu Pty Ltd [2001] HCA 44 ; (2001) 207 CLR 21 and Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1 ; (1986) 160 CLR 16. 8 On the pleadings, whether it should be concluded that each of the OMB parties who is a party to an OMB Agreement should be classified as an "independent contractor" for the purposes of the Independent Contractors Act is controversial. In an earlier interlocutory appeal in this proceeding, Rossmick No 1 Pty Ltd v Bank of Queensland Ltd [2008] FCAFC 81 at [9] , the Full Court observed: The question of what are the terms of the written agreement between the OMB parties and the Bank parties and their effect does not necessarily determine the legal issue of whether the OMB parties are independent contractors for the purposes of s 5 of the Commonwealth Act. While it is unnecessary for us to express a concluded view on this question, it may well be that the expression 'independent contractor' in that section is intended to reflect the common law concept of what is an independent contractor as it applies in relation to natural persons, though we note that an independent contractor, as defined, is not limited to a natural person. If this is correct then the issue might be determined not only by reference to the terms of the contract between the principal and the alleged independent contractor but also by reference to the way in which the parties carry out or give effect to the contract between them: see Hollis v Vabu Pty Ltd [2001] HCA 44 ; (2001) 207 CLR 21 particularly at 40-41. As noted earlier, the OMB parties contended they are not independent contractors and the Bank parties contended they are. That being so, the OMB parties are entitled to plead and prove facts (unless admitted by the Bank parties) concerning the way in which the contractual arrangements have been carried out as part of proving that they are not independent contractors. This is so even if, ultimately, the issue falls to be decided primarily or solely by reference to the written agreements between the parties, and this now appears to be conceded now by the Bank parties. 33 This justification for para 108 is, with respect, misdirected. The OMB parties are on firmer ground in their further submission that whether or not there may be goodwill vested in an OMB party to an OMB Agreement is, or at least is arguably, relevant to a conclusion that that party is an "independent contractor" for the purposes of the Independent Contractors Act . One of the factors to which Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ adverted in Hollis v Vabu Pty Ltd (at 42, [48]) in determining that the bicycle couriers were not independent contractors at common law was that they were unable to generate "goodwill" as a bicycle courier. It is settled that goodwill cannot be assigned in gross but rather passes with the transfer of rights to conduct a business in substantially the same manner and by substantially the same means as before: Commissioner of Taxation v Murry [1998] HCA 42 ; (1998) 193 CLR 605 at 615, [23] and 617-618, [30] and [31]. It is not impossible in these circumstances to see how, for the purposes of the Independent Contractors Act and irrespective of a technical ability to assign the benefit of an OMB Agreement, it might be relevant in deciding whether a party to such an agreement was to be characterised as an "independent contractor" that either no "goodwill" vested in that party or in any event that none would pass on an assignment. 48 The BoQ parties' point is certainly not clear to demonstration. In the face of a statutory definition of "independent contractor" which provides that an "independent contractor" is not limited to a natural person, recourse to an Explanatory Memorandum which seeks to promote the notion that the Act is concerned with an independent contractor/ employee distinction may be nothing more than a distraction from giving attention to the language of the definition in the Act itself in the context in which it appears. If nothing else, and given that a corporation cannot be an employee at common law, the way that the definition of "independent contractor" is cast gives pause for thought about whether it might be possible to have a corporate contractor whom one would not conclude was an independent contactor, applying by analogy tests laid down in Hollis v Vabu Pty Ltd , supra and Stevens v Brodribb Sawmilling Co Pty Ltd , supra. I expressly refrain from reaching a concluded view on that subject at an interlocutory stage.