Supreme Court of South Australia
(Full Court)

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GOLDEN PLAINS FODDER AUSTRALIA PTY LTD v MILLARD

[2007] SASC 391

Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice White and The Honourable Justice David)

8 November 2007

WORKERS' COMPENSATION - LIABILITY TO PAY COMPENSATION - LIABILITY OF EMPLOYER
EMPLOYMENT LAW - THE RELATIONSHIP OF EMPLOYER AND EMPLOYEE
Appeal from the determination of a preliminary issue by a District Court judge – appeal concerning the identity of the plaintiff’s employer – no written contract of employment – worker injured – actual employer one of two related entities – plaintiff’s action against one of these two entities was statute barred - consideration of the intentions of the parties – whether the involvement of the nominal employer was a sham – whether the documentary evidence reflected the reality of the arrangements – a decision of the Industrial Relations Commission concerning another worker reached the opposite conclusion to the District Court Judge – whether trial Judge’s reasons for decision were adequate.
Held: Appeal dismissed – regard to be had to the totality of the circumstances – business arrangement with nominal employer not a sham and did reflect the reality of the arrangements – decision of the Industrial Relations Commission distinguished – nominal employer held to be the actual employer – reasons of trial Judge adequate.

Workers Rehabilitation and Compensation Act 1986 (SA) s 3, s 46, s 54, s 59; WorkCover Corporation Act 1984 (SA); Pay-roll Tax Act 1971 (SA); Occupational Health, Safety and Welfare Act 1986 (SA) s 4, s 20, referred to.
Perkins v Golden Plains Fodder Australia/Macpri Pty Ltd [2004] SAIRComm 5; Perkins v Golden Plains Fodder Australia/Macpri Pty Ltd [2004] SAIRComm 62; Hollis v Vabu Pty Ltd (2001) 207 CLR 21; Hunter v Transport Accident Commission & Anor (2005) 43 MVR 130; Carlson v King (1947) 64 WN (NSW) 65; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Sun Alliance Insurance Ltd v Massoud [1989] VR 8; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Snook v London & West Riding Investments Ltd [1967] 2 QB 786; Scott v Commissioner of Taxation (Cth) (No 2) (1966) 40 ALJR 265; Sharrment Pty Ltd v Official Trustee (1988) 18 FCR 449; FCT v Montgomery (1999) 198 CLR 639; Esanda Ltd v Burgess [1984] 2 NSWLR 139; Finance Sector Union v Commonwealth Bank (2001) 111 IR 241; Pitcher v Langford (1991) 23 NSWLR 142; In the matter of C & T Grinter Transport Services (In Liquidation) & Ors [2004] FCA 1148; Damevski v Guidice and Others (2003) 133 FCR 438; Romero v Auty (2001) 19 ACLC 206; Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104; Australian Insurance Employees Union v WP Insurance Services Pty Ltd (1982) 42 ALR 598; Costello v Allstaff Industrial Personnel (SA) Pty Ltd & Anor [2004] SAIRComm 13; Textile Footwear and Clothing Union of Australia v Bellechic Pty Ltd [1998] FCA 1465; Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438, considered.

GOLDEN PLAINS FODDER AUSTRALIA PTY LTD v MILLARD
[2007] SASC 391

Full Court:  Gray, White and David JJ

GRAY J:	

1	This is an appeal from the determination of a preliminary issue by a District Court judge on the ground that the claim was statute barred.
	Background Facts

2	On 2 May 1998, Shawn John Millard, the plaintiff and respondent, injured his hand while working at a hay processing plant operated by Golden Plains Fodder Australia Pty Ltd, the defendant and appellant.  Mr Millard issued proceedings claiming common law damages from Golden Plains.
3	On the application of Golden Plains, a District Court judge ordered that the action proceed to determination on the preliminary point of whether Mr Millard was employed by Golden Plains.  Golden Plains submitted that it was Mr Millard’s employer and so sought an order for summary judgment on the basis that Mr Millard had no right of action at common law against Golden Plains due to the operation of section 54 of the Workers Rehabilitation and Compensation Act 1986 (SA).
4	Mr Millard contended that Golden Plains was not his employer but that a related company, Macpri Pty Ltd, was his employer.  In these circumstances it was contended that Mr Millard’s claim was not statute barred by section 54.  The task confronting the Judge was to decide which entity was Mr Millard’s employer on 2 May 1998.
	The Legislative Scheme

5	The WorkCover Corporation Act 1984 (SA) and the Workers Rehabilitation and Compensation Act establish a scheme of compulsory insurance.  With some exceptions, not relevant in the present case, all employers must register with the WorkCover Corporation.  Upon registration, an employer is given a registration number.  Thereafter employers pay premiums to WorkCover which in turn assumes the responsibility of paying to injured workers compensation assessed by reference to the terms of the scheme.  The scheme limits an employer’s liability and bars a worker from any right to claim common law damages from an employer.
6	Mr Millard would not be entitled to recover common law damages from Golden Plains if that company was his employer.  Section 54 (1) of the Workers Rehabilitation and Compensation Act relevantly provides:
... no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except —
(a)	a liability under this Act;
7	“Employer” is defined in section 3 of the Workers Rehabilitation and Compensation Act to mean:
(a)	a person by whom a worker is employed under a contract of service, or for whom work is done by a worker under a contract of service;
(b)	in relation to persons of whom the Crown is, under section 103A, the presumptive employer—the Crown;
(c)	in relation to persons of whom any other person is, by virtue of a provision of this Act, the presumptive employer—that other person,
and includes a former employer and the legal personal representative of a deceased employer
8	A contract of service is defined in section 3 as:
(a)	a contract under which one person (the worker) is employed by another (the employer);
(b)	a contract, arrangement or understanding under which one person (the 	worker) works for another (the employer) in prescribed work or work of a prescribed class;
(c)	a contract of apprenticeship;
(d)	a contract, arrangement or understanding under which a person (the worker)—
(i)	receives on-the-job training in a trade or vocation from another (the employer); and
(ii)	is during the period of that training remunerated by the employer
9	At the trial of the preliminary issue evidence was led from Mr Millard, Sheryl Deborah Millard, his mother, and Desmond Francis Jolly, a compensation officer.  In addition, business records were tendered relevant to the determination of the issue.  Golden Plains called Stuart Barry Price, Eyvonne Linda Price and Barry Ralph Price, three persons involved in the operations of Golden Plains.  Business records were also tendered by Golden Plains.
	The Trial Judge’s Reasons

10	The Judge concluded that Macpri was Mr Millard’s employer at the relevant time and dismissed Golden Plains’ applications.  
11	Counsel for Golden Plains contended that the Judge’s reasons were inadequate, such as to amount to an appealable error.  This complaint will be discussed later but it is convenient to record the reasons of the Judge in some detail at this point.  The Judge summarised the circumstances surrounding the dispute in the following terms:
Three farmers established the hay plant: John and Barry Price, who are brothers, and their then neighbour John McKay.  Various members of their families worked in the business, including Barry’s wife Eyvonne and their son Stuart.  The original accountant for the business was Mr Graham Sweeney, a close friend of Barry Price.
The families worked hard. The business prospered and the number of workers increased.  Acting on Mr Sweeney’s advice, the Price brothers and John McKay incorporated Golden Plains Fodder Pty Ltd.  They were its original directors.  In July 1994, Mr Sweeney registered the company with Workcover as the employer of the workers at the hay plant and Workcover assigned it a registration number.  From then, until June 1996, Golden Plains performed all of the functions of an employer.  Those functions included paying the workers’ wages, deducting income tax and issuing group certificates.  Its directors, or their delegates, gave instructions to the workers and the company complied with an employer’s workplace obligations.  In that period there was a change of directors.  John McKay died in September 1994 and his son, Duncan, replaced him as a director of Golden Plains.
In about June 1996, Mr Sweeney gave new advice and, acting on it, the directors of Golden Plains instructed him to arrange for the incorporation of Macpri.  The directors were John and Barry Price and Duncan McKay.  Upon Macpri’s incorporation, Golden Plains’s registration as the employer was cancelled.  Macpri became the registered employer, was assigned a registration number and began paying the workers, deducting income tax from their wages and issuing group certificates.   It was the registered employer when Mr Millard injured his hand and it remained so registered until June 2001 when its registration was cancelled and Golden Plains was again registered as the employer, albeit with a new registration number.
By 2001, Mr Stuart Price had become a director of Golden Plains.  He first became a director in 1997, before Mr Millard was employed.  Stuart Price was never a director of Macpri.
None of what I have set out so far is disputed nor is there any dispute about the important fact that, at all times, only Golden Plains carried on a business.  Macpri never did.  The workers at the hay plant generated income for Golden Plains and, out of that income, Macpri paid them after Golden Plains had transferred the necessary funds from its bank account to Macpri’s.  But two matters are hotly disputed:  the effect of the many documents that were tendered in evidence and the reason for Macpri’s incorporation.  Those topics are important because each of them may help to identify the intention of Mr Millard and of the directors of the two companies at the time he began his employment.  The intentions of the parties may assist in identifying the parties to the contract of employment.
12	The Judge then discussed the evidence and first addressed the documentary evidence:
I received a large number of documents.  I have studied them all but shall refer to only a few of them individually.  Most of the documents have not assisted me.  Some of them suggest that Golden Plains Fodder employed Mr Millard, others suggest that Macpri employed him.  Yet others are ambiguous. None of the documents, separately or in combination, answers the issue I must decide.
The documents to which I shall refer individually are those which Mr Millard signed when he began working at the hay plant.  There was a dispute about what those documents were and when he signed them.  On those issues, I accept Eyvonne Price’s evidence and I find that, on the 1st of May 1998, she provided Mr Millard with two documents.  One was about occupational health and safety and the other was an authority for his wages to be paid directly into his bank account.  Mr Millard signed both documents and returned them to Golden Plains’s office on the 2nd of May 1998 or caused them to be returned there within a few days thereafter.
The occupational health and safety document is on Golden Plains’s letterhead.  Mr Millard has signed as “employee” in two places in the document.  Eyvonne Price has also signed twice, once as “employer” and once as “the management (on behalf of the directors;  John Cliff Price, Duncan Troy McKay, Barry Ralph Price and Stuart Price) for and on behalf of Golden Plains Fodder Australia Pty Ltd.”  
The second document, the bank authority, is also on Golden Plains’s letterhead.  Because neither document makes any mention of Macpri, Golden Plains argued that the documents show that Mr Millard knew he was contracting with Golden Plains and intended to do so.  I reject that argument.
With respect to documents signed by Mr Millard at the commencement of his employment, the Judge concluded:
Mr Millard was only 16 when he began working at the hay plant.  He had left school a few weeks earlier, only a little way into Year 10, and had been working on his family’s farm.  His mother and Eyvonne Price knew each other and, through their connection, he got the job.  It came as something of a surprise.  He was working on the farm when Eyvonne Price rang about mid morning on the 1st of May to say that there was casual work available.  He went almost immediately to the hay plant and  reported to Eyvonne Price in the office.  She took him to the area of the plant where he was to work.  There, she introduced him to a fellow worker who showed him what to do and he began work.  At the end of his first day, he received the documents to which I have referred.
I find that Mr Millard did not ever turn his mind to the precise identity of his employer.  I accept his evidence that, as far as he was concerned, he was working at and for “the hay plant” as the business was known locally, although he was aware that its full name was Golden Plains Fodder.  He first heard of Macpri a couple of weeks after his injury.  He was recovering in hospital when he received a bank statement showing that Macpri had paid wages into his bank account.  Thereafter, he became very familiar with Macpri because, as the employer registered with Workcover, all correspondence about his subsequent claim was with Macpri and, eventually, industrial proceedings were between him and Macpri.
13	On the topic of the credibility of Mr Millard and his mother the Judge reasoned:
Mr Millard’s mother also gave evidence.  She was in much the same position as her son.  She had no reason to think about the identity of the employer or of the hay plant’s corporate or administrative structure.  Like him, Ms Millard thought her son would work at the hay plant and, also like him, did not know of Macpri until after his injury.  She, too, became very familiar with Macpri because her son is dyslexic and she assisted him by reading business documents, including Workcover documents to him.  Both she and her son were honest witnesses, but the nature of the case was such that they were of very little assistance on the issue of the identity of Mr Millard’s employer.
The remaining witness for Mr Millard was a WorkCover officer, with respect to whose evidence the Judge observed:
Mr Millard also called Mr Jolley, a Workcover officer, who explained Workcover’s registration system and, by reference to documents, the history of the registration of the two companies.  It is as I have set out above.  I make it plain that I have not used Mr Jolley’s evidence that Macpri was the registered employer in May 1998 as proof of the fact that Macpri was Mr Millard’s employer at the time.  It is an item of evidence, albeit an important one, which I have considered together with all the other evidence.
14	A serious challenge was made to the credibility of the defence witnesses.  Having recited the general effect of the evidence of those witnesses, which asserted that Golden Plains was the employer, the Judge concluded that he could not rely on any of the evidence.  The Judge observed that a few years earlier in another court each of the witnesses had provided a materially inconsistent account.  The Judge reasoned:
In 2001, a number of workers at the hay plant were dismissed.  At least one of them brought unfair dismissal proceedings in the Industrial Commission.  Barry, Eyvonne and Stuart Price signed statements which were tendered in evidence.  In those  statements they asserted that Macpri was the employer of the workers.  Moreover, they included in their statements particular evidence to support that general assertion.  For instance, Barry Price said in his statement dated the 19th of October 2003 that Macpri was set up to supply labour to the hay plant and that he and his brother John, in their capacity as directors of Macpri, gave instruction to the workers.  In evidence before me, he said that each of those statements was wrong.  Eyvonne Price said in a statement made on 20 October 2003 that she understood Macpri was established to employ the staff and to supply them to Golden Plains Fodder.  In evidence before me she said that she learned of the existence of Macpri when Mr Sweeney told her he was going to create a “payroll company” for accounting purposes.  Mrs Price admitted that her statement in 2003 was not true and that, at the time she made the statement, she knew that it was not true.  In Stuart Price’s statement to the  Industrial Commission, he said that the three directors of Macpri delegated authority to deal with some issues involving employees to Golden Plains management, directors and staff.  In evidence before me, he said that that statement was not correct.  Mr Stuart Price is an intelligent man and was plainly embarrassed when he gave that evidence.  All three of the Prices tried to explain their inconsistencies by saying that they simply signed what their lawyers in the industrial proceedings asked them to sign.  I do not accept that explanation.  In the proceedings in the Industrial Commission and in the proceedings before me, the Prices gave whatever evidence better, or best, suited their purposes at the time.  I cannot rely on it.  I find that, at the time of Macpri’s registration and up to and including the time of Mr Millard’s employment, the directors of both companies intended that Macpri be the employer of the workers at the hay plant.
15	It is to be noted that in the last sentence of the paragraph just cited the Judge reached a finding that the directors of Golden Plains and Macpri intended that Macpri be the employer of Mr Millard at the hay plant.  Having reached that conclusion the Judge then discussed the relevant law before reaching his ultimate conclusion.  He drew attention to the decision of the High Court in Hollis v Vabu Pty Ltd and commented:
I have tried to apply that in the context of this case.  In doing so I have considered a number of aspects of the relationship between Mr Millard and the two companies.  I have considered who had the right to control Mr Millard but have not found that a helpful inquiry because the directors of the two companies were nearly the same.  I do not think that Stuart Price’s appointment as a director of Golden Plains in 1997 is significant.  Control of both companies, in May 1998, remained with John and Barry Price and Duncan McKay.
16	The Judge then discussed the intention of the parties and expressed the following view:
In my view, the intentions of the parties provide the answer.  That has been held to be the deciding factor in a number of cases.  I refer especially to Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 111 IR 241, a decision of Moore J., and to Textile Footwear and Clothing Union of Australia v Bellechic Pty Ltd & Ors [1998] FCA 1465 (19 November 1998), a decision of Ryan J.  Neither of those cases was about the distinction between an independent contractor and an employee.  In both of them, the issue, as here, was which of two putative employers was truly the employer.
Moore J said at p. 267 paragraph 63:
“Ultimately, however, the answer emerges in my opinion, from a consideration of the intentions of the parties and, in particular, the positions adopted by the seconded employees themselves.”
Ryan J said at p.7:
“In those circumstances, in which the employees were engaged to work in a business in which a number of separate corporate entities participated otherwise than as partners, it was open to those controlling the business to select which company should be the employer provided that the selection was consistent with the financial and administrative organisation of the business and was not otherwise a sham.”
Neither of those two cases is on all fours with this case and I acknowledge that, in Bellechic, each of the putative employees was engaged in a business.  But the tests which their Honours applied are apposite here.  The directors of Golden Plains and of Macpri were entitled to select Macpri as the employer.  That selection was not a sham in the way in which that term is understood.  See Esanda Ltd v Burgess [1984] 2 NSWLR 139, especially at 153.  They intended that Macpri be the party which entered into the contract of service with Mr Millard.  Mr Millard neither thought about nor cared about the actual identity of the other party to his contract.  In those circumstances, he contracted with Macpri.  Accordingly, I conclude that Macpri was Mr Millard’s employer.
As a result, the application of Golden Plains was dismissed.
The Appeal

	Adequacy of Reasons

17	As earlier observed, complaint was made about the adequacy of the reasons of the Judge.  It is convenient to deal with this issue immediately.  Counsel for Golden Plains submitted that the reasons were wholly inadequate in that they failed to adequately explain the process by which the Judge reached his conclusion that the directors of Golden Plains and Macpri intended that Macpri be the employer of Mr Millard.
18	It was further contended that the reasons did not explain the factual basis upon which the Judge made the finding concerning the intention of the directors of Golden Plains and Macpri.  Counsel for Golden Plains submitted that although the extent of the reasons a court must give will depend upon the circumstances of the case, the reasons should deal with the substantive points that have been raised and should include findings on material questions of fact, refer to the evidence or other material upon which those findings are based, and provide an intelligible explanation of the process of reasoning that has led the court from the evidence to the findings and from the findings to the ultimate conclusion.
19	There is a substantial body of case law expressing the view that a failure to give reasons amounts to an error of law.  In Carlson v King, Jordan CJ articulated the principle as follows:
It has long been established that it is the duty of a Court at first instance, from which an appeal lies to a higher Court, to make, or cause to be made, a note of everything necessary to enable the case to be laid properly and sufficiently before the appellate Court if there should be an appeal.  This includes not only the evidence, and the decision arrived at, but also the reasons for arriving at the decision.  The duty is incumbent, not only upon magistrates, Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1 at 4-5; 63 WN 34 at 36 and District Courts, but also upon this Court, from which an appeal lies to the High Court and the Privy Council: Ex parte Reid; Re Lynch (1943) 43 SR (NSW) 207 at 212; 60 WN 148 at 150.
In Soulemezis v Dudley (Holdings) Pty Ltd, Kirby P dealt with the duty in the following terms:
The duty of judicial officers to record the reasons for their decisions has been developed in recent decades in this, as in other jurisdictions of the common law as an attribute of the judicial process and an incident to the necessities of appellate review.
...
This decision [Carlson] does not require of trial judges a tedious examination of detailed evidence or a minute explanation of every step in the reasoning process that leads to the judge's conclusion.  But the judicial obligation to give reasons, and not to frustrate the legislative facility of appeal on questions of law, at least obliges a judge to state generally and briefly the grounds which have led him or her to the conclusions reached concerning disputed factual questions and to list the findings on the principal contested issues.  Only if this is done can this Court discharge its functions, if an appeal is brought to it.
20	Courts have encountered difficulty in articulating a test to determine whether or not reasons are adequate.  Much must depend upon the circumstances of each case.  The reasons must be coherent, intelligible and comprehensive.  But there is more.  The reasons must be sufficiently adequate to allow an appellate court to perform its function and they must be such that justice is seen to be done.  As was observed in Sun Alliance Insurance Ltd v Massoud:
The adequacy of the reasons will depend upon the circumstances of the case.  But the reasons, will, in my opinion, be inadequate if:
(a)	the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b)	justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap.  If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
21	On the hearing of this appeal, I encountered no difficulty in ascertaining the reasoning upon which the decision was based.  The Judge explained his reason for the rejection of the evidence of the defence witnesses.  That rejection was not challenged on appeal.  His Honour’s acceptance of Mr Millard’s witnesses and his explanation about the limitation of that evidence was adequately articulated.  His Honour’s treatment of the documentary material identified the use made and conclusions reached.  Although other judges may have analysed the documentary material in more detail, such an analysis was not necessary to the Judge’s reasons.  The Judge’s identification of legal principles and the application of those principles to the facts, as found by him, can be readily followed.  
22	These observations allow the conclusion that the Judge’s reasons were adequate to allow the appellate process to proceed without difficulty.  Further, there can be no suggestion that justice was not seen to be done.  In the circumstances, the reasons were concise, to the point and adequate.  I reject this complaint.
	The True Nature of the Employment Relationship

23	Turning now to the complaints arising from the Judge’s reasons, it was submitted that the Judge was in error in his approach to the determination that Macpri was Mr Millard’s employer.  It was said that the Judge erred in having regard to evidence of the subjective intention of the parties.
24	It was submitted that when construing a contract, a court should determine what would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened.  It is not a search for the uncommunicated subjective motives or intentions of the parties.  It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations.  What matters is what each party, by their words and conduct, would have led a reasonable person in the position of the other party to believe.  References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement.  This, it was submitted, requires consideration not only of the terms of the document but also of the surrounding circumstances known to the parties and the purpose and object of the transaction.
25	It was further contended in the present case that the arrangements entered into between Golden Plains and Macpri, as well as the arrangements between those companies and Mr Millard, were a “sham”.  It was contended that the business records that suggested and evidenced that Macpri was the employer of Mr Millard disguised or masked the true position.  Counsel for Golden Plains submitted that, notwithstanding the extensive representation by business records and conduct evidencing that Macpri was Mr Millard’s employer, this was false.  It was contended that this evidence could be swept aside and the conclusion reached that the truth was that Golden Plains was his employer.  To understand the breadth of the submission, it should be pointed out that it was said that representations as to Macpri being the employer made in certified company accounts, to the Tax Commissioner, to WorkCover, and to others were false.  Counsel for Golden Plains appeared at times reluctant to use the word “sham”, but that was the substance of the submission.
26	Before coming to discuss these submissions it is necessary to briefly summarise the legal approach to be taken to the proposition that a document or arrangement is a sham.  A convenient starting point is the observation of Diplock LJ in Snook v London & West Riding Investments Ltd:
I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the “sham” which are intended by them to give to third parties or to the Court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create.  But one thing, I think, is clear in legal principle, morality and the authorities ... that for acts or documents to be a “sham”, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating.
27	A similar approach was identified by Windeyer J in Scott v Commissioner of Taxation (Cth) (No 2):
On the other hand, if the scheme, including the deed, was intended to be a mere facade behind which activities might be carried on which were not to be really directed to the stated purposes but to other ends, the words of the deed should be disregarded. ... A disguise as a real thing: it may be an elaborate and carefully prepared thing; but it is nevertheless a disguise.  The difficult and debatable philosophic questions of the meaning and relationship of reality, substance and form are for the purposes of our law generally resolved by asking did the parties who entered into the ostensible transaction mean it to be in truth their transaction, or did they mean it to be, and in fact use it as, merely a disguise, a facade, a sham, a false front – all these words have been metaphorically used – concealing their real transaction …
28	Lockhart J, in Sharrment Pty Ltd v Official Trustee, reviewed the above and other authorities before concluding:
A “sham” is therefore, for the purposes of Australian law, something that is intended to be mistaken for something else or that is not really what it purports to be. It is a spurious imitation, a counterfeit, a disguise or a false front. It is not genuine or true, but something made in imitation of something else or made to appear to be something which it is not. It is something which is false or deceptive.
This analysis was cited with approval in the judgment of Gaudron, Gummow, Kirby and Hayne JJ in FCT v Montgomery.
29	The above references demonstrate that the intention of the parties to an arrangement is properly the subject of investigation when considering whether the arrangement is a sham.  In Sharrment, Lockhart J discussed whether this inquiry allowed an investigation of the subjective intent of the parties.  In that respect he observed:
It is not clear from Diplock LJ’s formulation whether it is the subjective intention of the parties that is determinative, although logically this seems to be the correct result. In Coppleson's case Hunt J … took the view that the authorities established that it is the intention of the parties to the transaction which determines the question whether the act or document was never intended to be operative according to its tenor at all but rather was meant to cloak another and different transaction. On the facts of the present case the absence of direct evidence as to Mr Wynyard’s intention and that of the companies controlled by him must leave the Court to identify those intentions by reference to the form of the transactions and the surrounding circumstances.
A similar view was taken in the authority referred to, by the trial Judge, of Esanda Ltd v Burgess.  There Samuels JA observed:
Hence, that evidence should ultimately have been excluded, unless it was relied on to prove that the leasing agreement was a sham; that is to say “that it was never intended by the parties to be operative according to its tenor at all, but was meant to cloak another and different transaction”: Perpetual Trustee Co (Ltd) v Bligh (1940) 41 SR (NSW) 33 at 39; (1940) 58 WN 41. But the evidence falls far short of proving any such thing, it being clear indeed that the leasing agreement was put fully into operation. That exhausts the potential of the oral evidence, because it cannot be received to prove a contemporaneous oral agreement that the leasing agreement, although intended to be an operative record of the transaction, was not intended to be operative according to its terms: see Bligh, loc cit and the cases cited.
Priestley JA commented:

In Boydell, Bligh and Hawke Jordan CJ collected and synthesized the principal English authorities. In Bligh and Hawke he also explained the relation of the “sham” doctrine to the rule in Hoyt's Proprietary Ltd v Spencer. On the basis of the law set out by Jordan CJ I think the following propositions are established: (1) when parties to an agreement disguise the nature of the transaction they intend to carry out by casting it into a form which makes it appear to third parties as a different kind of transaction evidence is receivable to show the whole of the transaction; (2) although such a transaction attracts the description “sham” and the document or documents in some cases will be wholly inoperative, one or more of the documents concerned may be operative according to its true nature: see Boydell v James at 627; that is, subject to its true nature being given effect, its terms will be operative between the parties.
These authorities confirm the appropriateness of receiving evidence directly from the parties about their intentions when directed to the topic of sham.  One inquiry is about the terms of the arrangement.  However, there is another inquiry, equally important, as to whether the parties intended there to be a façade, a misrepresentation of the position or, to put it more bluntly, a falsehood.
30	In my view the submissions of Golden Plains do raise the question of a sham.  This case involved, inter alia, an inquiry about whether the arrangements evidenced by the business records of employment between Macpri and Mr Millard and others were a sham.
31	The above analysis also explains the comparable approach taken by authorities in the area of employment law to the reception of evidence of subjective intention of parties to a contract of employment and it is convenient now to turn to those authorities.
Principles from Employment Law

32	Where there is an issue of identifying the employer of an employee when there might be two (or more) possible employers, courts have adopted the approach of resolving the issue by the application of the principles developed for determining whether a person was an employer at all. 
33	The touchstone is the practical reality of the relationship.  Courts have consistently emphasised that in determining whether a relationship between parties is one of employment or independent contract, the court should focus on the practical reality of the relationship.
34	The totality of the circumstances surrounding the relationship of the various parties, including conduct subsequent to the creation of the alleged employment relationship, is relevant. 
35	Documentation created by one or more of the parties describing or evidencing an apparent employment relationship will be relevant to, but not necessarily determinative of, the true character of the relationship.  The documentation may have been brought into existence for other purposes, for example, for tax minimisation or the reduction of insurance premiums, without reflecting the reality of the parties’ relationship.  The payment of wages by a particular entity is not conclusive of the existence of an employment relationship.  The beliefs of the employees as to the identity of the employer is admissible and is entitled to be given weight. 
	Application of the Legal Principles

36	Golden Plains was incorporated on 2 May 1994.  Its directors were John Clift Price, Barry Ralph Price and Duncan Troy McKay.  Stuart Barry Price became a director on 20 October 1997.  The shareholders were JC Price Nominees Pty Ltd, JD McKay Nominees Pty Ltd and The Toby Price Family Trust.
37	Golden Plains was engaged in the business of exporting hay.  It had a business that was expanding and needed more labour.  A decision was taken to utilise another corporate entity in the operations of the business and to that end Macpri was incorporated on 25 June 1996.  The directors and shareholders of Macpri were John Clift Price, Barry Ralph Price and Duncan Troy McKay.  The secretary of both companies was an accountant, Graham Paul Sweeney.  The Registered Office of both companies was at the accountant’s business premises.
38	Shortly before mid-1996 a decision was taken about the management operation of the hay exporting business.  Macpri became the entity that dealt with the labour force.  To that end, many documents were created that evidenced that Macpri was the employer of that labour force.  Macpri paid the wages, attended to payroll tax, issued group certificates, paid WorkCover levies and generally attended to matters pertaining to the employment of labour.  Whether that evidence should be accepted as disclosing the true position was an issue in the trial.
39	Macpri received income from Golden Plains described as consulting fees.  The records and accounts of both companies treated the fees as an expense to Golden Plains and income to Macpri.  Accounts of Golden Plains and Macpri were tendered in evidence.  For the years 1997 – 2000 the accounts include profit and loss statements, balance sheets, notes of financial statements and directors’ declarations.  These documents are business records.
40	Only comparative figures are available for the year ending June 1997.  The amount of the consulting fee was $376,000 and the amount of wages paid $330,055.  Payments of superannuation and WorkCover levies, and the deduction of tax, are all identified.
41	In respect of the year ending 30 June 1998 the directors’ report records the principal activities of Macpri as farm management.  The report approves the financial accounts.  The directors expressed the opinion that the profit and loss accounts gave a true and fair view of the profit or loss of Macpri for the financial year and that the balance sheet provided a true and fair view of the state of the company at the end of the financial year.
42	The profit and loss statement discloses the receipt of consulting fees of $475,537 as the primary income received.  Those moneys appear to have been used to meet wages of $427,609 to some 30 employees, each identified by name.  The accounts record the tax deducted and wages paid.  The accounts disclose that Macpri made superannuation contributions and paid WorkCover levies and tax.
43	The accounts for the year ending 30 June 1999 disclose a total income from consulting fees of $773,140.  In the notes this receipt is described as being in respect of the rendering of services.  The wages paid totalled $663,170, the WorkCover payment was $36,297 and superannuation contributions of $42,878 were made.  Payroll tax that year totalled $12,943.
44	The accounts for the year 2000 follow a similar format.  On this occasion the consulting fee paid totalled $981,819 and by this time there were 56 employees.
45	The analysis of the accounts presents a clear picture.  Employee and wage earner expenses are all quarantined into the Macpri operation.  Those employees work in and about the business of Golden Plains.  The conclusion to be drawn from the accounts is that the moneys used to meet wages were provided to Macpri by Golden Plains and were described as consulting fees.
46	It is apparent that a decision was made in 1996 to have the operation run through the two companies, with Macpri undertaking the role of employer of the labour force as indicated above and Golden Plains being the trading arm of the operation.
47	A number of documents tendered emanating from the defendant contained the description of Golden Plains trading as Macpri.  Counsel for Golden Plains disavowed any suggestion that this was correct.  The business records do not support the suggestion that Golden Plains traded as Macpri.  The arrangement appears to have been that Macpri would be responsible for labour requirements and would provide that labour to Golden Plains.  In return it received a consulting fee that was sufficient to meet the outgoing expenses including wages, superannuation, payroll tax and WorkCover levy.
48	There are understandable commercial reasons why the whole operation should have been structured in this way, with the responsibility for labour being with Macpri.  There is no suggestion that to do so was in breach of any law or regulation or would cut across any statutory obligations in respect to workers’ compensation, payroll tax or income tax.  This was the way those involved in the overall operation structured the business.  It was not a sham.  It was a legitimate way of doing business.
49	Counsel for Golden Plains at times referred to the reality of the arrangement and at other times to the process as a sham or as simply the paper side of the arrangement.  However advanced, this submission should be rejected.
50	Many other documents support the above analysis.  In July 1996, Macpri was the subject of an application for registration as an employer with WorkCover.  The registration was accepted by WorkCover and for the ensuing five years WorkCover treated Macpri as the employer of Mr Millard and the other employees.
51	Following Mr Millard’s injuries, his compensation entitlement was dealt with by WorkCover on the basis that Macpri was his employer.  Forms lodged with WorkCover by Macpri, relevant to his compensation entitlement, describe Macpri as the employer.  These forms contain a warning about false and misleading statements and the criminal penalties that may follow.
52	If Macpri was not the employer there would be a number of unexpected repercussions.  There may well have been breaches of the Workers Rehabilitation and Compensation Act, misstatements made to the Commissioner of Taxation in respect to payroll tax, and breaches of the superannuation laws.  There would also be concerns in regard to the use of assets of Macpri for the purpose of the company that were not legitimate.
53	Counsel for Golden Plains was inclined to sweep all of these problems aside with a broad brush statement “that is just the paper side of the arrangements”.  The authorities require the court to investigate the reality of the situation.
54	According to this submission, this Court should ignore the body of documentary evidence that evidenced that Macpri was the employer, and give much greater weight to what was said to be the reality that Golden Plains was the employer.  This submission should be rejected.
55	There are documents that provide some support for Golden Plains’ case.  However, a finding that the employer of Mr Millard was Golden Plains would necessarily involve the conclusion that those engaged in the management of the operation were involved in a serious misrepresentation of fact to a number of public bodies which in turn had acted on the statements provided to them.
56	This analysis of the evidence demonstrates that the Judge was correct to reach the conclusion that Macpri was at the relevant time the employer of Mr Millard.  I would dismiss this appeal.

57	WHITE J:	The plaintiff in these proceedings claims damages from Golden Plains Fodder Australia Pty Ltd in respect of an injury he sustained in a work accident on 2 May 1998.  By reason of a statutory bar the plaintiff cannot recover damages from Golden Plains if it was his employer.  A judge of the District Court determined on the trial of a preliminary issue that Macpri Pty Ltd, a company associated with Golden Plains, was the plaintiff’s employer at the time the injury occurred. 
58	Golden Plains appeals against that decision.  The principal issue is whether the judge was correct in identifying Macpri as the plaintiff’s employer.  A subsidiary issue is whether the judge gave adequate reasons for his decision.
The Two Companies
59	Golden Plains has carried on a business as a hay processor at Thomas Plains on the Yorke Peninsula (the hay plant).  Initially, the business was conducted by a partnership comprising two brothers, John and Barry Price, and their then neighbour, John McKay.  Various members of the Price families worked in the business, including Barry’s wife Eyvonne and their son Stuart.  In 1994, Golden Plains was incorporated to conduct the business.  The original partners became the directors of Golden Plains.  Its shareholders were two companies and a family trust which reflected the interests of the original partners.  John McKay died in September 1994 and his son Duncan replaced him as director.  Stuart Price became a director on 20 October 1997.
60	From an early stage, the partnership employed workers at the hay plant.  Golden Plains became the employer of those workers from 1 July 1994.  The WRCA applied to the employment of those workers.
61	Section 59(1) of the WRCA provides that, unless exempted, an employer can only employ a worker in employment to which the WRCA applies if the employer is registered by WorkCover Corporation.  A new employer has 14 days to apply for registration after the employment of workers commences (s 59(3)).
62	In July 1994, Mr Sweeney (Golden Plains’ accountant) registered Golden Plains with WorkCover as the employer of the workers in the hay plant.  From that time until June 1996, Golden Plains performed all the functions of an employer of the workers at the hay plant, such as paying wages, deducting income tax and issuing group certificates.
63	Macpri was incorporated in June 1996 following the advice of Mr Sweeney.  Macpri then registered as an employer with WorkCover and performed all of the functions of the employer previously carried out by Golden Plains.  The registration of Golden Plains as an employer with WorkCover was cancelled.  It was Macpri, and not Golden Plains, which was registered with WorkCover as an employer at the time of the plaintiff’s injury on 2 May 1998.  Macpri remained a registered employer with WorkCover until 30 June 2001 when its registration was cancelled.  Golden Plains was then registered again with WorkCover as the employer.
64	Apart from Stuart Price, the directors of Golden Plains and Macpri have been the same.  Macpri’s shareholders at the relevant times were John and Barry Price and Duncan McKay.  Until his death in 1999, Mr Sweeney provided accountancy services and acted as secretary to both Golden Plains and Macpri.  Since the death of Mr Sweeney, Stuart Price has been the secretary of both companies.
65	The judge accepted that at the material times only Golden Plains carried on the hay processing business.
Relevant Statutory Provisions
66	Section 54(1) of the WRCA provides that no liability attaches to an “employer” in respect of an injury arising from “employment” by that employer, except a liability arising under the WRCA itself.
67	Section 3(1) of the WRCA provides the relevant definitions for the purposes of s 54 and s 59.  An “employer” is “a person by whom a worker is employed under a contract of service, or for whom work is done by a worker under a contract of service”.  A “contract of service” is “a contract under which one person (the worker) is employed by another (the employer)”.  “Employment” includes “work done under a contract of service”.
68	It was common ground at trial that the plaintiff was a worker performing work under a contract of service and that he was engaged in employment for the purposes of the WRCA.  The only issue which the District Court was determining was whether Golden Plains or Macpri was the employer.
Legal Principles
69	The principles to be applied in cases such as this were considered by Finn J in In the Matter of C & T Grinter Transport Services Pty Ltd (In Liquidation) & Grinter Transport Pty Ltd (In Liquidation); Ex Parte Fitzgerald & Adams (“Grinter”).  Drawing very much on that judgment, I summarise the principles as follows:
1.	Regard is to be had to the totality of the circumstances surrounding the relationship of the parties.

2.	The circumstances may include the factors considered in determining whether a given relationship is an employment relationship at all.

3.	Events which occurred after the relevant contract was formed may also be considered.

4.	It is the reality of the contractual arrangements which is to be considered.  Effect may be given to that underlying reality despite the absence of any submission that certain arrangements are a sham. 

5.	Payment of wages and issuing a taxation group certificate by one entity is important but not conclusive as to the identity of the employer.  It may reflect no more than financial convenience between entities within one corporate group.  Nevertheless, such factors will in most cases require active consideration.

6.	Documents created by one or more of the entities describing or evidencing their relationship will be relevant, but not necessarily conclusive as to the true character of the relationship.  The Court should consider the purpose for the creation of the documents.  For example, certain documents may have been prepared for a purpose other than describing the contractual relationship, such as taxation minimisation or reduction of insurance premiums.

7.	Conversations and conduct at the time of the engagement of the worker are of considerable significance.  The belief of the worker as to the identity of the employer is admissible and should be given due weight.

8.	When new employees are engaged to work in a business in which a number of separate corporate entities participate other than as partners, it is open to those controlling the business to select the company which is to be the employer.  However, that selection must be consistent with the financial and administrative organisation of the business and not otherwise be a sham.

70	In the present case, particular regard must be had to the circumstances surrounding the commencement of the plaintiff’s employment.  It was accepted by both parties at trial, and on appeal, that events which occurred after the commencement of the plaintiff’s employment could also be considered.  
The Circumstances of the Plaintiff’s Employment
71	The plaintiff commenced working at the hay plant on 1 May 1998 (the day before he suffered his injury).  He had left school a few weeks earlier, shortly after having commenced Year 10.  At about mid morning on 1 May 1998, Eyvonne Price telephoned the plaintiff’s mother and indicated that casual work was available for the plaintiff.  He went almost immediately to the hay plant and reported to Mrs Price.  She took him to the area of the plant where he was to work, introduced him to a fellow worker and then left.  A fellow worker then showed the plaintiff what was required of him.  
72	At the end of that first day the plaintiff received three documents from Mrs Price.  The first was a statement of the occupational health, safety and welfare policies applicable to the hay plant.  The second was an authorisation for the plaintiff’s wages to be paid directly into his bank account.  The third was an employment declaration from the Australian Taxation Office.  The plaintiff took the documents with him and completed them with his mother’s assistance.  He either returned them the following day or caused them to be returned a few days later.  Reference will be made later to these documents.  
73	On 2 May 1998, the plaintiff worked at the hay plant from the rostered starting time until mid morning, when he suffered a severe crush injury to his right hand.  He was incapacitated for work for an extensive period.  Apart from a relatively short attendance for rehabilitation purposes, he has not returned to work at the hay plant.
74	Macpri paid wages to the plaintiff for 1 and 2 May 1998 and also the income maintenance to which the plaintiff was entitled during his incapacity thereafter.  Although the judge did not make a specific finding about this, it seems that it was Macpri, and not Golden Plains, which discharged the employer’s liability for income maintenance during the first two weeks of the plaintiff’s incapacity for work (see s 46(3) of the WRCA).
75	It was common ground that there was no written contract of employment.
The Decision of the Judge
76	The judge found that the identity of the plaintiff’s employer was to be determined by reference to the intention of the parties.  The judge accepted that the plaintiff had been indifferent as to the identity of the employing entity until he received correspondence from WorkCover after his injury which identified Macpri as his employer.  He had thought that he was going to work at the “hay plant”, as that was the way that the business was known locally.  He was aware of the name Golden Plains Fodder, as the hay plant was also known by that name.  The plaintiff first heard of Macpri through the WorkCover correspondence after his injury occurred.  The evidence of the plaintiff’s mother was to similar effect.
77	Golden Plains led evidence at trial from Barry, Eyvonne and Stuart Price.  Their evidence was to the effect that Golden Plains was (and had been intended to be) the employer of all workers at the hay plant, including the plaintiff.  It was suggested that Macpri was a mere administrative convenience.  It did not operate as a labour hire company but instead as a “payroll company”.  This was solely for the convenience of Mrs Price who did the book-keeping work.
78	The judge was not prepared to act on that evidence, as he regarded the evidence of each of the Prices as unreliable.  In the Industrial Relations Commission of South Australia in 2003, Golden Plains defended an unfair dismissal application brought by another worker.  Eyvonne and Stuart Price gave oral evidence and Barry Price provided a written witness statement.  This evidence was a direct contrast to the evidence presented before the District Court.  The judge considered that the Prices gave whatever evidence best suited their purposes at the time.  The finding by the judge about the reliability of the evidence of the Prices was not challenged on the appeal.
79	The judge concluded that it had been open to the directors of Golden Plains and of Macpri to select Macpri as the employer of the plaintiff, and that that is what they had done.  He reached this conclusion by considering the intention of the directors.
Who Did the Parties Intend to be the Plaintiff’s Employer?
80	The finding of the judge concerning the state of mind of the plaintiff and his mother meant that no useful inferences about intention could be drawn from their evidence.  Neither had considered the identity of the employing entity at all before the plaintiff suffered his injury.
81	The rejection by the judge of the evidence of the Prices that they had intended Golden Plains to be the employer of the workers did not have the consequence that they must have intended Macpri to be the employer.  It meant simply that their evidence could not be used to make findings of fact about the intention of either Golden Plains or Macpri.
82	This left only the documentary evidence.  The judge stated that none of the documents had assisted him and that none resolved the issue which he had to decide.  This means that the basis upon which the judge found that the parties intended Macpri to be the employer is not clear.  Despite saying that the documentary evidence had not assisted him, the judge must have had regard to it.  He said that he had considered, and relied upon, the totality of the relationship between the parties.  He could not have done so without considering the documentary evidence.  Further, the judge expressly referred to the statement of Ryan J in Bellechic that it was open to those controlling a business in which a number of separate corporate entities participated (other than as partners) to select which company should be the employer “consistent with the financial and administrative organisation of the business”.  The judge considered that reasoning to be apposite to the present case and stated that he was applying it.  As the evidence of the Price witnesses was rejected, the financial and administrative organisation of the hay plant business could only have been ascertained by reference to the tendered documentary material.
83	The documentary evidence supports almost overwhelmingly the judge’s conclusion regarding intention.  It shows that Golden Plains had been the employer of workers at the hay plant from 1 July 1994 to 30 June 1996.  As already noted, Macpri was then incorporated and registered as an employer with WorkCover.  Golden Plains’ registration with WorkCover was cancelled.  No steps were taken to re-register Golden Plains as an employer until June 2001.  This meant that Golden Plains could not have been the lawful employer of the plaintiff in May 1998.  It is reasonable to suppose that the directors of Golden Plains and of Macpri intended their employment practices to be in accordance with the law.
84	The documentary evidence confirms that Macpri paid the wages; deducted the income tax; remitted the deducted tax to the Australian Taxation Office; issued the group certificates; attended to the payment of the compulsory superannuation on behalf of the workers at the hay plant; submitted the annual returns to WorkCover; paid the WorkCover levies; engaged in communications with WorkCover about the applicable levies; and registered as an employer with the Commissioner of Pay-roll Tax.  Specifically, Macpri paid the wages and superannuation contributions of the plaintiff, deducted his taxes, and calculated its WorkCover levies taking into account the amounts paid to the plaintiff.  In Macpri’s application for registration under the Pay‑roll Tax Act 1971 (SA) dated 7 April 1999 (apparently completed by Mr Sweeney), Macpri described its principal business as the “supply of labour”.  Likewise, in the application to WorkCover for registration as an employer dated 1 July 1996 (signed by Barry Price), Macpri described itself as an employer of nine persons (eight labourers and one office worker).  Except for one matter, which I will mention later, in the dealings with the Australian Taxation Office, the Commissioner of Pay-roll Tax and WorkCover, Macpri and not Golden Plains held itself out as the employer of the hay plant workers.  If Macpri was not the employer, then each of those authorities was being materially misled.
85	The trading profit and loss statements of Golden Plains for the financial years ending 30 June 1998 and 30 June 1999 indicate that it did not pay any amount for wages, salaries, superannuation contributions or WorkCover levies.  The corresponding trading profit and loss statements of Macpri show that it paid those items.  The payments to Macpri from Golden Plains were recorded in the financial accounts of each company as “consulting fees”.
86	The financial arrangements between Golden Plains and Macpri were relatively straightforward.  There was no written contract and Macpri did not issue invoices to Golden Plains in respect of any worker.  Instead, when Macpri needed money to pay outgoings such as wages, superannuation contributions, or WorkCover levies, Mrs Price, as book-keeper for both companies, simply transferred sufficient monies from the bank account of Golden Plains into that of Macpri.
87	In some of the correspondence written on behalf of the hay plant, Mrs Price described the employer as “Golden Plains Fodder Australia Pty Ltd trading as Macpri Pty Ltd”.  This appears to involve a certain confusion or uncertainty on her part as Macpri Pty Ltd was not a business or trading name.  I doubt that much significance can be attached to that usage by Mrs Price.  What is more significant is that when Mrs Price had to identify the actual employer, she indicated clearly that it was Macpri.  The clearest example is a letter written on 11 June 2001 to WorkCover seeking a reduction in the workers compensation levy rate payable by Macpri.  Mrs Price emphasised the steps being taken by Macpri to reduce the incidence of claims.  The following paragraph gives the flavour of the letter:
Macpri Pty Ltd are doing everything in their power to alleviate unnecessary WorkCover claims (ie OH and Safety Employment courses, OH and Safety, Manual Handling, Safe Work Practices using safety wear provided, Drug & Alcohol policy courses, Fire Drill courses) and apart from this disputed case have kept our injury claims to a reasonable minimum.
88	The repeated references in this letter to Macpri as the employer indicate an appreciation by Mrs Price as to the identity of the employer at the hay plant.  If Macpri was not the employer, then it would appear that WorkCover was being misled.
89	All this documentary evidence indicates that the “financial and administrative organisation of the business” had Macpri as the employer and supplier of labour to Golden Plains.
Was the Arrangement a Sham?
90	The judge found that the arrangement between Golden Plains and Macpri was not a sham.  The apparent effect of the arrangement was not different to that intended by the directors of Golden Plains and Macpri.  Golden Plains contested that finding, submitting that the arrangement involving Macpri was a mere “paper arrangement” put in place as an “accounting device”.  
91	The rejection of the evidence of the Prices meant that there was little evidence upon which a finding of sham could have been made.  It is not uncommon within a corporate group for the employees to be engaged by an entity which is not involved in the ownership of assets or in the group’s trading operations.  This may be done for perceived taxation advantages or to distance the group’s assets from claims by workers in respect of unpaid entitlements.  When properly implemented, it cannot be said that such an arrangement is a sham in the sense described above.  On the contrary, such arrangements are often quite transparent, and the apparent effect is precisely the actual legal effect sought to be achieved by those arrangements.
92	As already noted, the Price’s evidence was to the effect that Macpri had been established to facilitate the book-keeping by Mrs Price in relation to the payment of wages.  The rejection of their evidence by the judge included rejection of that explanation.  The judge did not make a finding as to the purpose of the establishment of Macpri.  Despite that, I consider the finding of the judge that the arrangement was not a sham has not been shown to be wrong.
Did the Documents Reflect the Reality of the Arrangements?
93	Mr Stanley QC, for Golden Plains, then submitted that even if the arrangement was not a sham, the inferences arising from the documents did not reflect the reality of the arrangement.  The parties had instead conducted themselves on the basis that Golden Plains was the employer.  Reliance was placed on the judgments of Priestley and Handley JJA in Pitcher v Langford and on the Federal Court decision in Damevski v Guidice and Ors.
94	Mr Stanley emphasised a number of features of the business arrangements to support this submission.  The evidence indicated, he submitted, that all of the workers were employed by the one entity.  It was not the case that some workers were employed by Golden Plains and some by Macpri.  The employer, prior to 1 July 1996, was Golden Plains.  The employees of Golden Plains at 30 June 1996 could only have become employees of Macpri on 1 July 1996 if there was a consensual transfer, or if their employment by Golden Plains was terminated and they were then engaged by Macpri.  There was no evidence that either event had occurred.  Similarly, in July 2001 when Macpri is said to have ceased as employer and Golden Plains resumed (having re-registered with WorkCover), there was no evidence of any consensual transfer of employment from Macpri to Golden Plains.  Nor was there evidence of any other changes in worker arrangements as at 1 July 1996, or for that matter, at 1 July 2001.  That indicated, it was submitted, that there must have been continuing employment of workers by Golden Plains from 1 July 1996 to 30 June 2001.
95	To some extent, the evidentiary basis for this submission depends upon the rejected evidence of the Price witnesses.  But there are other reasons why this submission should not be accepted.  First, the niceties of contractual arrangements are not always appreciated and observed in the employment context.  It would not be surprising if, despite the intention of the parties, all the legal steps necessary to make Macpri the employer of the workers in 1996 had not been observed.  Secondly, it is possible that some of the employees were casual workers engaged under a series of consecutive short-term contracts of employment.  If so, each contract would have come to an end on its own terms, without any requirement for termination by Golden Plains, or assignment to Macpri in July 1996.  Finally, and perhaps of most significance, the plaintiff’s employment commenced after 1 July 1996.  Whatever failings might have existed in the arrangements concerning the employment of those engaged at 30 June 1996 could not affect the reality of the plaintiff’s employment relationship.  That reality is to be assessed having regard to the circumstances which existed on 1 May 1998.
96	For these reasons, I do not consider that the events or omissions which occurred in June and July 1996 alter the assessment of the plaintiff’s status as at 1 May 1998.
97	Golden Plains submitted that the only reasonable inference to be drawn from the documents was that Macpri did not trade as an independent business.  Its trading profit and loss statements did not include the kinds of expenditure normally incurred by an operating business, such as accounting expenses, office expenditures, insurance, telephone and power.  Instead it seems that Macpri operated out of the office of Golden Plains.  Further, Mr Stanley QC pointed to the absence of any suggestion of a written contract between Golden Plains and Macpri.  Nor did Macpri render invoices to Golden Plains for the employees it allegedly supplied.  There was nothing, it was submitted, to indicate that Macpri operated as a labour hire company such as that considered in Mason & Cox Pty Ltd v McCann.  The factual premises upon which these submission were made may be accepted.  In my opinion, they do not, however, lead to the conclusion contended by Golden Plains.  The matters emphasised are consistent with Macpri being a single purpose company operating within a small corporate group to provide labour. The absence of any documentation such as a contract or invoice to evidence the relationship with Golden Plains is attributable to the informality of the group arrangements.  The relationship between Golden Plains and Macpri meant that formal documentation of the kind to which counsel referred was not necessary.
98	Mr Stanley QC submitted that Golden Plains had the day-to-day control of the workers at the hay plant.  The close similarity between those who controlled Golden Plains and those who controlled Macpri made it difficult to sustain this submission.  With the exception of Stuart Price, the directors of both companies were the same.  To the extent that Stuart Price gave directions to the workers, there is no reason to suppose that he had not been clothed with relevant authority to do so by Macpri.  He was in any event the company secretary of Macpri from late 1999.  Mrs Price, who was an employee only of Macpri and not an employee or office holder in Golden Plains, did give directions to the workers.  It seems more likely that in a small workplace such as Golden Plains, in which the family interests must have been widely known, directions from a member of the Price or McKay families were recognised as being authoritative.  That authority did not depend upon the particular office or position occupied by that family member.  In these circumstances the trial judge concluded that an enquiry into the exercise of control was not useful.  I respectfully agree with that conclusion.
99	Golden Plains placed considerable emphasis on the statement of the occupational health, safety and welfare policies issued to, and signed by, the plaintiff on 1 May 1998.  This statement (which appears to be a pro forma document) was printed on the letterhead of Golden Plains.  It was signed by Mrs Price on behalf of the directors of Golden Plains.  The document described itself as relating to “the health and safety requirements under s 20 of the Occupational Health, Safety and Welfare Act 1986 (SA) with reference to practices and procedures at the workplace Golden Plains Fodder Australia Pty Ltd”.  It stated in some detail particular practices and procedures which were to apply.  Golden Plains submitted that this document was significant for two reasons.  First, the statement was issued in purported discharge of the obligation of an employer under s 20 of the Occupational Health, Safety and Welfare Act 1986 (SA) (“OHSWA”).  It was Golden Plains which was purporting to discharge that obligation and not Macpri.  Secondly, the statement constituted a form of notice to the plaintiff that the entity employing him was Golden Plains.
100	There is some force in those submissions.  That force is, however, diminished by the fact that the trial judge had little oral evidence at all, let alone evidence upon which he was prepared to act, as to the purpose for the creation of the statement, the reason it was in the name of Golden Plains, and the reason it was provided to the plaintiff.  The obligation imposed by s 20 of the OHSWA is not confined to the employer of an employee under a common law contract of employment.  An employer, for the purposes of the OHSWA, includes a principal of an independent contractor (and any employee of an independent contractor) who performs certain kinds of work for that principal.  Thus it was possible that the document was prepared for use in all situations in which a worker or a contractor came onto the hay plant site.  Further, the obligation established by s 20 of the OHSWA applies in relation to the “workplace” of the employer.  Golden Plains had a “workplace” as defined in the OHSWA.  However, as the activity of Macpri was only the supply of labour, it is doubtful that it had any such “workplace”.  It is possible that the preparation of the policy in the name of Golden Plains was for that reason, rather than indicating any belief or intention of the directors as to the identity of the employer.
101	Even without those two considerations, my opinion is that the assistance provided by the statement of occupational health, safety and welfare practices to the claim of Golden Plains is outweighed by the other documentary evidence.  That evidence indicates almost overwhelmingly that Macpri was intended to be the employer of the plaintiff.
102	The Australian Taxation Office declaration signed by the plaintiff on 1 May 1988 does not materially assist Golden Plains.  The employer details had not been completed by Mrs Price when the plaintiff signed that declaration.  Mrs Price subsequently entered the employer’s registered business name as “Golden Plains Fodder Australia Pty Ltd” and the employer’s trading name as “Macpri Pty Ltd”.  This was consistent with the practice discussed previously of Mrs Price writing correspondence using the description “Golden Plains Fodder Pty Ltd trading as Macpri Pty Ltd”.  I have already stated that I do not consider that any particular implication can be drawn from that manner of expression.
103	In my opinion, in all these circumstances, it cannot reasonably be held that the various documents did not reflect the reality of the arrangements between the parties.
Decision of the Industrial Relations Commission
104	Next, Golden Plains pointed to the apparent inconsistency of the decision of the trial judge with a decision of the Industrial Relations Commission concerning the identity of the employer at the hay plant.  In Perkins v Golden Plains Fodder Australia Pty Ltd and Macpri Pty Ltd, the Commission determined an unfair dismissal claim brought by a former worker at the hay plant.  One issue in the proceedings was whether the employer was Golden Plains or Macpri.  The oral evidence of Stuart and Eyvonne Price before the Commission and the written statement of Barry Price filed with the Commission in connection with those proceedings was to the effect that Macpri was the employer.  The Commission found that Golden Plains had been the employer.  Golden Plains emphasised the inconsistency between the finding of the judge in this case and the conclusion of the Commission in Perkins.
105	The precise circumstances of Mr Perkins’ employment were not proved in the District Court proceedings.  From the decision of the Industrial Relations Commission it is clear however that, unlike the plaintiff, Mr Perkins had a written contract of employment.  He had entered into an Australian Workplace Agreement with Golden Plains.  In addition, Mr Perkins had been issued with a job specification entitled “Golden Plains Fodder Australia Pty Ltd Job Specification as from May 24 1999”.  These two factors by themselves indicate that Mr Perkins’ employment arrangements were quite different from those of the plaintiff.  The different decision of the Industrial Relations Commission is therefore explicable on this basis.
Adequacy of Reasons
106	There is some force in the complaint of Golden Plains that the reasons of the trial judge were inadequate.  The judge could have stated more explicitly the basis of his finding as to the intention of the directors of Golden Plains and Macpri.  His judgment instead left much of his reasoning to inference.
107	However, it is unnecessary to consider this ground of appeal further.  As Golden Plains does not contest the finding by the judge as to the unreliability of the evidence of the Price witnesses, the relevant evidence was almost wholly documentary.  Golden Plains accepted that this Court is in as good a position as the trial judge to form a conclusion as to the identity of the employer.  I accept that this is so.  The above review of the evidence indicates, almost overwhelmingly, that in May 1998 it was the intention of the directors of both Golden Plains and of Macpri that Macpri would be the employer of the plaintiff.  Effect was given to that intention in a way which did not involve sham or a departure from the underlying reality of the situation.  If I had formed the view that the reasons of the trial judge were inadequate, I would have reached the same conclusion on a reconsideration as did the judge.
Conclusion
108	The appeal should be dismissed.
109	DAVID J:		I would dismiss the appeal for the reasons given by Gray J.