Bonner v Chief Commissioner of State Revenue [2021] NSWCATAP 180
Background
The Appellants are Chelsea Bonner and Bella Management Group Pty Ltd. Ms Bonner operated as a sole trader from 2002 to 30 June 2015, and since 1 July 2016 Bella Management Group has operated a business that represents models to the Appellants’ clients or procures models for clients for a commission on each transaction between a client and a model.
The Appellants sought a review of a decision by the Tribunal to dismiss objections to payroll tax assessments in respect of the 2014, 2015, 2016 and 2017 financial years and part of the 2018 financial year.
Issues
The central issue was whether the Tribunal erred in finding that the arrangements between the Appellants, their clients and models were “employment agency contracts” within the meaning of s. 37 of the Act.
Primary Decision
The findings of the Tribunal were as follows:
- The Appellants’ models worked at locations selected by their clients;
- Some models worked regularly for the same client;
- It was unlikely the models determined entirely for themselves how they would work in a practical sense. However, the evidence was not clear as to where demarcation lines of “creative control” would lie; and
- Having regard to the evidence… as a whole, and the Appellants’ onus of proof, the Tribunal was not satisfied that the models, as service providers, are not effectively added to the workforce of the client for the conduct of the client’s business.
Appellants’ submissions
The Appellants contended that certain findings by the Tribunal were factually incorrect; even if factually correct, were wrong at law as a misapplication of the relevant tests [16]. The impugned findings of the Tribunal were (see [15]):
- that the models worked “on site” of the clients (“Impugned Finding 1”);
- that the models were continuously or regularly employed by the clients (“Impugned Finding 2”); and
- that the models were akin to the clients’ staff (“Impugned Finding 3”).
Impugned finding 1: the models worked “on site” of the client
The Appellants contended that in finding that the models worked at a location determined by the client, the Tribunal made the “unavailable leap” that the models worked at “a worksite of the client”: [22]. Further, they submitted there are more meaningful factors than the location where a model is required to attend to provide their services, which the Tribunal could have taken into account in determining whether they were working “in and for” the business of the Appellants’ client. The position of models who provide services to “end users” and “brands” was contrasted with the position of cleaners or security guards who work regular and predictable hours and are brought into a client’s business on a regular basis: [23].
Impugned finding 2: the models were continuously or regularly employed
The Appellants contended that Impugned Finding 2 was against the weight of evidence and misstated the nature of the engagements between their models and clients. The Appellants asserted that the Tribunal had been selective in its consideration of the evidence, stating that it had referred to only one contract that provided for a 12-month duration, with the option to extend, including eight campaigns and fortnightly “shoot dates”. It was submitted that the totality of the evidence pointed to a different conclusion, namely, that the models worked ad hoc and on call, and there is no expectation of future or further work: [35] – [37].
Impugned finding 3: the models were akin to the client’s staff
The Appellants contended that Impugned Finding 3 was “clearly wrong where the entire point of using [a] talent agency to procure a model’s services is to obviate the need to keep various models employed as staff all year”: [44]. They pointed to David Jones, the retailer, as an example. It was submitted that David Jones’ staff are those “individuals manning the counter and attending on customers at the store,” but that in contrast, David Jones engages models because “they bring benefits entirely absent from the David Jones workforce….”. At the highest, it could be said that the models are working for David Jones not “in and for” the conduct of David Jones’ business: [45].
The Appellants argued that the fact that the models are required to follow directions on a photo shoot does not mean they are working “in and for” the business of the client: [46].
Chief Commissioner’s submissions
The Chief Commissioner submitted that:
- as a “matter of common sense”, the Appellants’ clients would need to supervise and direct the models on set, in order to achieve the desired “look” or “shot”; and
- the evidence before the Tribunal confirms that neither the model nor the Appellants have “any input into creative, casting or on-set decisions”: [47].
Submissions
The Chief Commissioner sought orders that the Applicants pay the Respondent’s costs of the Substantive Proceedings from 4 October 2019, and Dandanis & Associates be jointly liable with the Applicants for such costs in relation to:
- issuing summonses after the first hearing day without seeking leave of the Tribunal where a guillotine order was in effect;
- making a hopeless adjournment application prior to the second hearing day; and
- failing to give reasonable notice that the Chief Commissioner’s expert witness was not required to attend the hearing in Sydney on the second day.
The Chief Commissioner also sought orders that all these costs should be awarded on an indemnity basis as agreed or assessed.
As to special circumstances, the Chief Commissioner cited Santow JA’s statement in Cripps & Another v G & M Dawson [2006] NSWCA 81 and Burchett J’s statement in Minister for Community Services and Health v Chee Keong Thoo (1998) 78 ALR 307 at 324 as its meaning.
The Chief Commissioner submitted that the following factors constituted special circumstances when viewed collectively:
- The Applicants strenuously contested the assessments in absence of sufficient evidence to discharge their onus of proof.
- They conceded on several occasions that they were aware of their onus of proof.
- That Mr Bares, manager of 1735 Pty Ltd and director of Sheep Station Pty Ltd, the second applicant, declared on the application for primary production exemption form that the primary production activity was part-time.
- As a result of the Applicants filing the report of Mr Hartley on 4 October 2019, the Respondent became aware of large structures on the land which had not been disclosed by the Applicants.
- That following the receipt of Mr Hartley’s report, the Chief Commissioner sought voluntary production of documents, issued summonses, retained Mr Schuster to prepare a report and arranged a site visit and the Applicants’ solicitors resisted the Chief Commissioner’s request to obtain access to documents such as photographs, aerial photographs or footage of the subject lands and the documents relied on by Mr Hartley.
- That the Applicant withdrew most of its application for review six weeks after the hearing.
In summary, the Applicants and Dandanis & Associates submitted that there were no special circumstances in relation to the proceedings and, even if there are special circumstances, they do not warrant an award of costs. Section 36 of the CAT Act stipulates the guiding principles in relation to the conduct of the proceedings require just, quick and cheap resolution and the Chief Commissioner failed until late in the proceedings to view the relevant properties so as to clarify the issues in dispute at an appropriate time, accordingly the Chief Commissioner did not seek a just, cheap and quick resolution of the proceedings and the Chief Commissioner issued the Assessments without ensuring he was aware of all relevant matters.
Decision
The Appeal Panel noted (at [26]) the comments by Ward CJ in Bayton Cleaning Company Pty Ltd v CCSR [2019] NSWSC 657 at [267] that in determining whether individuals are working “in and for the conduct of the business of the employment agent’s client”, the more meaningful factors, are whether the services are provided on-site, whether they are provided with a degree of continuity or regularity (or are ad hoc), and the extent of interaction and supervision with or by the client’s staff (and, where relevant, the client’s customers.
The Appeal Panel did not regard the factors identified by Ward CJ as necessarily being the “more meaningful factors” in all cases in determining whether individuals are working “in and for” the conduct of the business of the employment agent’s client. It noted her Honour’s acknowledgement that the question involves a “fact sensitive analysis” in each case: [27].
However, as the Appellants did not squarely identify the other factors that the Tribunal ought to have taken into account in the present case, the Appeal Panel did not address whether the Tribunal erred by restricting its consideration to the Bayton Cleaning factors: [28].
Impugned finding 1: the models worked “on site” of the client
The Appeal Panel rejected the Appellants’ contention that the Tribunal made a factually incorrect finding that the models worked at a worksite of the client. Rather, the Appeal Panel considered that the Tribunal simply noted the unchallenged evidence that the models were engaged to work at sites determined by each client: [30].
It also rejected the contention that the Tribunal misapplied the test in Bayton Cleaning. The Appeal Panel did not regard Bayton Cleaning as authority for the proposition that the provision of services at the place of business or workplace of the client is a pre-condition to a finding that the subject individuals are working “in and for the conduct of the client’s business.” It noted that the Tribunal was not required to be satisfied that a location selected by the client was the client’s usual place of business or workplace. Rather, it was for the Tribunal to determine the factors relevant to whether the models were working “in and for the conduct of the client’s business” and the weight to be given to each of those factors: [33].
Impugned finding 2: the models were continuously or regularly employed
The Appeal Panel considered that the Appellants misconstrued the finding by the Tribunal, noting at [42] that the Tribunal did not find that in all cases there is a “degree of continuity or regularity” in the work performed by models for a client. Rather, the Tribunal rejected the contention by the Appellants that the models work “ad hoc and on call” and that “there is no expectation of future or further work.” The Appeal Panel held that it was open to the Tribunal to conclude as such having regard to the available evidence.
Impugned finding 3: the models were akin to the client’s staff
The Appeal Panel observed that the Appellants’ challenge to this finding conflated two questions, namely:
- whether the models were subject to the supervision and direction of the client; and
- whether the models were “effectively added to the workforce of the client for the conduct of the client’s business.”
The Appeal Panel noted that the Tribunal was “unclear” about where the demarcation lines of creative control lay, and that it did not make a positive finding either way about supervision and control: [50]. Accordingly, the Appeal Panel rejected the Appellants’ contention that this finding of the Tribunal was wrong or against the weight of the evidence: [52].
The Appeal Panel referred to the Tribunal’s finding (at [59] of the Tribunal’s decision) that:
“…I am not satisfied that the models, as service providers, are not effectively added to the workforce of the client for the conduct of the client’s business in circumstances where those models have agreed to provide services to the relevant client in accordance with the agreements negotiated between the relevant model and the client and perform work in accordance with those agreements.”
In the Appeal Panel’s view, the above conclusion was not based on Impugned Finding 3, but rather on all three Impugned Findings: [55].
The Appeal Panel found that the Appellants failed to refer to evidence to support their contention that the models could not be considered to be added to their clients’ workforce. Therefore, this ground of appeal failed: [56] – [58].
Orders
The Appeal Panel dismissed the appeal and refused the Appellants leave to appeal.
https://www.caselaw.nsw.gov.au/decision/17a2c4067029b9e1af79211e