United Marine Products v Angatiri [2007] KICA 17; Civil Appeal 07 of 2006 (30 July 2007)

IN THE KIRIBATI COURT OF APPEAL
CIVIL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

Civil Appeal No. 7 of 2006

BETWEEN

UNITED MARINE PRODUCTS LTD
Appellant

AND

TONAA ANGATIRI
Respondent

Before: Hardie Boys JA
Tompkins JA
Paterson JA

Counsel: Taoing Taoaba for appellant
Joelle Grover for respondent

Date of Hearing: 26 July 2007
Date of Judgment: 30 July 2007

JUDGMENT OF THE COURT

INTRODUCTION

[1] This is an appeal from two judgments of the Chief Justice in a Workmen’s Compensation case. In the first, delivered on 23 March 2006, he held for the plaintiff, the present respondent, and in the second, delivered on 8 May 2006, he fixed the amount of compensation at $11,000, but 4 days later, on formal application by counsel for the plaintiff, he recalled that order under the slip rule and changed his assessment to $22,000.

[2] The respondent is the widow of Angatiri Toantabanga who died on
30 August 2004 while diving for beche-de-mer off Tabiteuea North. He was diving for the appellant company, and the main issue in the case was whether he was an employee or an independent contractor. If he were the latter of course he would not be covered by the Workmen’s Compensation Act. The Chief Justice held that he was an employee, and so was entitled to compensation

[3] The company appeals both against the finding that Angatiri was an employee and against the quantum of compensation.

[4] The appeal was listed at the 2006 sittings of this Court, when an adjournment was sought as counsel from Fiji had been instructed and had not had time to prepare his case. In opposing the adjournment counsel for the plaintiff pointed out that although the notice of appeal had been filed, it had not been served and the requirements of rule 17 as to costs and security had not been met, nor had there been any application for extension or dispensation. In the end the Court without prejudice to the plaintiff’s rights, agreed to the adjournment on terms including the payment of the sum of $5,000, which were eventually met.

[5] That being the case, when the matter was called at the present sitting, the Court agreed to grant the necessary extensions of time, and to hear the appeal on its merits.

THE FACTS

[6] The evidence was meagre, the only witness being the appellant, Nei Tonaa. A written agreement was produced, and the facts were by agreement to some extent amplified by the company’s counsel.

[7] Angatiri had had some experience as a diver, having worked for another company before his marriage in 2000, although it is not known for how long. After that, he worked as a fisherman and a pipe welder. In about July 2004 a friend told him about the appellant company and asked him if he would like to go diving. He said he would, and the friend took him to the appellant’s office where he signed an agreement drawn up by the company which was in these terms:

Agreement for the diving and sale of beche de mer (sea cucumber)

This agreement is made between the diver Angatiri and sea cucumber buyer United Marine Products Ltd (UMPL) on the day 22nd of the month July 2004.

As believed, since it is the wishes of the diver to use gas to dive for sea cucumber, not involving someone else or the company of this;

As also believed, the diver knows difficulties and accidents that might happen to him when he uses the gas for scuba diving;

And under the belief that UMPL is happy to give assistance when needed for developing the trade of sea cucumber in different ways.

Under the above mentioned facts, both parties have agreed to the terms of the agreement.

1. That the diver is to sell its sea cucumber to UMPL.

2. It is duty of the diver

To comply with the rules of diving of sea cucumber.

To avoid problems or accidents that might happen to him or his colleagues.

To check that diving gears are in good conditions before he uses them or if he is in doubt of their conditions, he shall not use them.

To look after all things he borrowed from UMPL so that they don’t get lost or damaged and if this happens he shall meet the cost to repair or replace it.

3. It is duty of UMPL to

To get diving gears and other equipments for diving sea cucumber.

To check and see that sea cucumbers are in good conditions before they are sold out.

4. None involvement in other matters.

UMPL has no involvement with accident happened to the diver in regard to various forms of compensation.

[8] The Chief Justice noted that if Angatiri were an employee clause 4 would be invalid: S.29 of the Workmen’s Compensation Ordinance.

[9] Three weeks after the agreement was signed, Angatiri’s friend came and told him that they were ready to go. He set off, taking only his clothes, and along with other divers was taken to the island by one of the company’s ships. The arrangement was that the fare of $240 would be paid out of his earnings. They all stayed in the maneaba at Kabuna village on Tabiteuea, apparently at the company’s expense. The company supplied all the diving equipment and a speedboat to take the divers to where they were to dive. There were no fixed hours of work, and Angatiri was given no specific instructions on the manner of diving, or where or when to dive. The company paid him according to his catch, and neither Provident Fund nor tax deductions were made from the total of $1901 he received.

EMPLOYEE OR INDEPENDENT CONTRACTOR?

[10] It is often a matter of considerable difficulty to determine into which category a particular worker falls, and while there are a great many reported cases on the topic it is true to say that each case turns upon its own particular facts. Nonetheless, the Courts have endeavoured to establish some general criteria. The Chief Justice contented himself with referring to Gould v Minister of National Insurance (1951) 1KB 731 and the quotation in Ormerod J’s judgment at 733-744 from Lord Thankerton in Short v J & W Henderson Ltd (1946) 39 BWCC 62, in which his Lordship proposed four indicia of a contract of service, in other words of an employment contract They were "(a) the master’s power of selection of his servant; (b) the payment of wages or other remuneration; (c) the master’s right to control the doing of the work; and (d) the master’s right of suspension or dismissal" His Lordship continued: "the principal requirement of a contract of service is the right of the master in some reasonable sense to control the method of doing the work, and that this factor of superintendence and control has frequently been treated as critical and decisive of the legal quality of the relationship."

[11] Obviously a relevant factor in the present case is the written agreement. It is not as clearly directed to the relationship of the parties as were the agreements considered in many of the decided cases, but the general principle, formulated in relation to contracts that sought to identify clearly the nature of the relationship, is clear. It is that the Court must look at the realities of the situation and not to the form alone: see for example Ferguson v John Dawson & partners (Contractors) Ltd [1976] EWCA Civ 7; (1976) 3 AllER 817at 822.

[12] The law has developed since Lord Thankerton wrote in 1946. The leading case now is probably Lee Ting Sang v Chung Chi-Keung [1990] 2 AC 374 where at p 382 the Board adopted these words of Cooke J in Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173, 184-185:

The fundamental test to be applied is this: "is the person who has engaged himself to perform these services performing them as a person in business on his own account?" If the answer is "yes", then the contract is a contract for services. If the answer is "no", then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task".

[13] That all seem a little remote from this scuba diver fishing for beche-de-mer off Tabiteuea, but along with the earlier more specific tests, which are still applicable, it provides appropriate guidance to a court addressing the basic issue.

[14] The Chief Justice, essentially taking Lord Thankerton’s criteria, held:

It is both a matter of overall impression and also of examining – so far as I can examine on such scanty evidence – the relationship between the deceased and the defendant. I use the four indicia of which Lord Thankerton approved (I notice the language used rather presupposes a master/servant relationship but I expect the use of such language is merely a matter of convenience):-

the master’s power of selection: the defendant accepted the deceased but could have refused him a contract: the defendant had the power of selection.

payment of wages etc: the defendant paid on catch: the deceased’s earnings depended on his catch: whether a wage or not a moot point.

The master’s right of control: the defendant could control if, when and where the deceased dived through its speed boat which the deceased depended on to get to the diving ground: the deceased used the defendant’s gear which the defendant could have withheld if it wished: the defendant had a fair measure of control.

The master’s right of suspension or dismissal: the defendant could at any time have withdrawn use of gear and refused to pay for the deceased’s catch: effectively the defendant had the right of suspension or dismissal.

My overall impression and consideration of the four indicia lead me to conclude that the relationship between deceased and defendant probably was that of master and servant.

DECISION

[15] Counsel on both sides emphasised to us the various factors supporting their respective cases, all of which were before the Chief Justice, and we do not need to repeat them. The proper approach for an appellate court to findings such as these was considered by the Supreme Court of New Zealand in Bryson v Three Foot Six Ltd (No. 2) [2005] NZSC 34; [2005] ERNZ 372, adopting the words of Lord Griffiths who delivered the advice of the Privy Council in Lee Ting Sang v Chung Chi-Keung at 383:

Whether or not a person is employed under a contract of service is often said in the authorities to be a mixed question of fact and law. Exceptionally, if the relationship is dependent solely upon the true construction of a written document it is regarded as a question of law: see Davies v Presbyterian Church of Wales [1986] 1 WLR 323. But where, as in the present case, the relationship has to be determined by an investigation and evaluation of the factual circumstances in which the work is performed, it must now be taken to be firmly established that the question of whether or not the work was performed in the capacity of an employee or as an independent contractor is to be regarded by an appellate court as a question of fact to be determined by the trial court........

...... a finding by a county court judge that a workman was, or was not, employed under a contract of service was a question of fact with which an appellate court could only interfere if there was no evidence to support his finding .....

The Supreme Court summarised the matter in this way:

Where a decision either way is fairly open, depending on the view taken, it is treated as a decision of fact, able to be impugned only if in the process of determination the decision-maker misdirects itself in law.

[16] The present is one of those cases where a decision either way was fairly open to the Chief Justice. Whether this Court acting as a trial court would have taken a different view is beside the point. We hold that the Chief Justice was entitled to take the view that he did, and therefore his decision must be upheld.

THE AMOUNT OF COMPENSATION AWARDED

[17] Section 6 of the Workmen’s Compensation Ordinance provides that in a case such as this, where the deceased workman leaves wholly dependent dependents (Angatiri left a widow and three young children) the amount of compensation is a sum equal to 48 months earnings or $25,000 whichever is the less.

[18] This presented a difficulty in this case, because Angatiri had worked for the company for only a month. In that time he earned $1901, and Nei Tonaa’s counsel submitted to the Chief Justice that that sum should be the yardstick for the assessment, and as it would produce more than $40,000 over the four year period, compensation should be set at the maximum of $25,000.

[19] There is a proviso to section 12 of the Ordinance that allows the calculation to be based on the earnings of someone doing similar work where the shortness of the current employment or the casual nature of the work makes it impracticable to look to the work actually being undertaken at the time of the accident. But the Chief Justice declined to adopt this approach, saying that it would be absurd and unfair to the company to make a calculation on the basis that Angatiri would spend most of his time diving.

[20] The only evidence of Angatiri’s earnings was given by Nei Tonaa, who was recalled for that purpose. She said that – obviously – his earnings from fishing varied from catch to catch, from $6 to $15 a day, for six days a week, but it could go up to over $100 a week. She did not know how much he earned from welding, something he did one day a week.

[21] In this rather unsatisfactory state of the evidence, the Chief Justice said that he had to "wield the broad axe." He continued:

I should remember that some of the catch would have been used for food for the family: averaging income from fishing I should use a figure rather more than halfway up the bracket $60 to $100. I allow $85 per week. Angatiri also would have earned something from welding: it is a guess but I allow $15 per week. Coming to a final figure I take into account his much higher earnings in the last month - $1,900.

[22] Ms Taoaba submitted that the Chief Justice was not entitled to take this approach. The evidence, she said, was hearsay, without independent confirmation, and had no regard to the contingencies that may have prevented Angatiri from fishing or diving. She submitted that we should refer the case back to the Chief Justice for him to determine compensation on the basis of better admissible evidence. Nei Tonaa’s evidence, she said, should be disregarded altogether.

[23] There is no point in referring the case back. The evidence is unlikely to be any better. In Attorney-General in respect of Director of Lands v Tianta Koriri Civil Appeal 2 of 2007, judgment delivered 30 July 2007, we were confronted with a similar problem, and explained that difficulties in assessing damages do not relieve a court from assessing them in the best manner it can. That is what the Chief Justice endeavoured to do in this case, and we see no reason to interfere with his decision.

THE SLIP RULE

[24] Ms Taoaba drew attention to the statement in Storey & Keers Ppty Ltd v Johnstone (1987) 9 NSWLR 446, (which has been applied in a number of other cases to which she also referred us), to the effect that an omission or mistake should not be treated as accidental (and therefore be able to be corrected under the slip rule) if the proposed amendment requires the exercise of an independent discretion or is a matter upon which a real difference of opinion might exist. She said that this was not such a case, and that in any event the Chief Justice should have given his reasons for the amendment he made.

[25] The explanation for the Chief Justice’s amendment is to be found on the Court file itself. It is that the initial assessment was based on two years earnings, whereas the Ordinance requires four years. That was a simple matter of mistaken calculation, that did not require reference to counsel, although the Chief Justice would have been wise to have informed Ms Taoaba of his intention to make the change.

RESULT

[26] The result is that the appeal is dismissed. The respondent is entitled to costs, to be agreed or failing agreement to be fixed by the Registrar.

[27] The sum of $5,000, which we understand had been paid as one of the terms on which the appeal was adjourned last year, must be treated as part payment of the compensation which is now payable to the respondent.

Hardie Boys JA
Tompkins JA
Paterson JA