IS CROWN LIABLE?

Dominion, Volume 27, Issue 17, 14 October 1933, Page 17

IS CROWN LIABLE?

Injury to Co-operative

Contractor

APPEAL COURT ACTION Lengthy legal argument was heard in the Court of Appeal yesterday in a case continued from the previous afternoon, in which the question raised was whether persons working under co-operative contract with the Government were servants of the Government or independent contractors. The appeal arose out of a decision of Mr. Justice Kennedy in a case in which Minnie Solomon, widow, Timara, sought to recover £2OOO damages from the Grown following the death of her husband, who was killed in an accident at the Waitakl hydroelectric works on May 20, 1932. The Court comprised the Chief Justice (Sir Michael Myers), Mr. Justice MacGlregor, Mr. Justice Ostler and Mr. Justice Smith. Mr. P. J. O’Regan appeared for the appellant, and Mr. W. D. Campbell, Crown solicitor, Tlmaru, and with him Mr. J. Prendeville, for the Crown. Following the reply by Mr. O'Regan the Court adjournejl until Monday morning. It was submitted by Mr. O Regan that even if the men called themselves contractors, that was nothing more than prima facie evidence, which had to be supported by the circumstances of the employment. There was no question in the case before the Court of payment by a lump sum, which usually characterised an Independent contract, although it was not an essential characteristic. The men were working in the presence of an overseer, who had the right to take them off the contract at any time and put them on other work. The existence of that right, counsel submitted, was an argument in favour of a contract of service rather than an independent contract. Reasons for System. Mr. Justice Smith said that if the engineer had that power, he had complete control over the men. His Honour asked: What is the reason for employing men as co-operative contractors and not on wages? Mr. O’Regan explained that it amounted to eliminating the middleman’s profits, and was designed to provide the men with a fair rate of wages.

Mr. Justice Smith: Is anything in the contract to prevent the men making more money? Mr. O'Regan: The men are limited to making the current amount of Kages in the district. Mr. Campbell submitted, firstly, that the appellant must establish the relationship which she alleged existed between the Crown and members of the co-operative party from the original agreement alone. Secondly, that the relationship created by the agreement was that of principal and contractor, and not that of master and servant. Thirdly, that the evidence objected to, even if admitted, did not alter the relationship created by the agreement. Unemployment Tax Deduction.

The Chief Justice drew counsel’s attention to the fact that the unemployment tax was deducted from the payments to the men, as in the case of a deduction from wages. Mr. Campbell, in reply, admitted that the department did. not possess the right to do that, but merely deducted the tax foe the purpose of assisting the Unemployment Board in its collection.

Continuing, the Chief Justice said that against counsel’s argument was the fact that the men could be taken off and put ou to time work. In support of his contention that the relationship was one between principal and and not between master and servant, Mr. Campbell quoted some of the conditions of the agreement, stressing those relative to dismissal and to direction.

The Chief justice raised the point of who would take action if, say, for the sake of argument, the Crown refused to pay. Would each individual take a suit, or would one on behalf of the whole gang? Counsel claimed that in this event one man, on behalf of the whole gang, would take action. Mr. Justice MacGregor: Isn’t the underlying difficulty the difference between contractor and workman? For the purpose of status he is a workman; for the purpose of contract he is a contractor.

Mr. Justice Smith: Why does the Government adopt this method of contract instead of dealing with the men as wage-earners? Mr. Campbell: A contractor shall not be allowed to make a big profit, and, secondly, It gives the men some Incentive to work harder.

Mr. Campbell’s argument was supported by Mr. Prendeville, after which Mr. O'Regan made his reply. The court then adjourned.