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Racing NSW v NSW Self Insurance Corporation &c [2008] NSWSC 6. Einstein J. 

"32 In my view the defendant's submissions are of substance. The reasons which follow generally accept the defendant's stance:

Each of cl 9(1)(c) and s 158 employ a deeming device to create a statutory fiction as that term is used in Muller v Dalgety & Co Limited (1909) 9 CLR 693 at 696. The following passage identifies the correct approach to the construction of such provisions:

When 'deemed' is used in this way, Griffith CJ pointed out that it is important to consider the purpose for which the fiction has been introduced. Care must be taken to observe that the extended meaning of the word is applied but equally the reader must be aware that it is a fictitious use of the word and is only applicable in its particular context. (Pearce DC and Geddes RS, Statutory Interpretation in Australia (6th ed) at 148.)

ii. Hence in Ebb v Fast Fix Steel Fixing PL [2007] NSWCA 236 at [57] Basten JA said:

"Where a deeming provision is found in a particular provision having a specific purpose, rather than a general provision of the kind now under consideration [referring to clause 2 of Schedule 1 of the WIMWC Act, different factors may arise. Thus, a conclusion that the constraints on common law damages contained in Part 5 of the 1987 Act and Chapter 7 of the 1998 Act apply in relation to injuries occurring in the course of deemed employment, will cast no doubt on the different approach adopted in relation to sections 15, 16 and 17 of the 1987 Act, in cases such as Hobbs , University of New England and Kotevski . [Emphasis added.]

iii. It follows that in construing a deeming provision, regard must be had as to whether the purpose of the provision is general as in clause 9(1)(c) or specific as in s 158. Clause 9(1) is expressed to be 'for the purposes of this Act'. However s 158 is not so expressed and has a limited and specific purpose.

iv. Clause 9(1) requires that the injured person be 'taken to be a worker' of the Wellington Race Club. However it does not follow from that provision that for the specific purpose of s 158(3) , the Wellington Race Club should be deemed to hold a policy nor that the Wellington Race Club should be excused from the compulsory requirement of obtaining relevant workers compensation insurance.

v. The expression 'for the purposes of this Act' in this context is for the purpose of ensuring that the worker's rights to compensation under the Act are against the particular club in circumstances where because the injured person was not employed pursuant to a contract of service, he would not be entitled to payments. The purpose of the Act is to provide for the payment of compensation benefit to the injured worker and to impose the obligation to pay compensation on an 'employer'. In the case of persons within clause 9(1), as there may not be a contract of service, it is necessary to impose the obligation to pay compensation on an organisation which by definition is not the employer in fact.

vi. Although it may be conceded that clause 9(1)(c) has wide application 'for the purpose of the Act' it does not follow that the fictional 'employer' is to be substituted for the actual employer in every section of the Act. Clause 9(1) does not at least in express terms, provide that for the purposes of the Act 'employer' means those persons deemed by the clause to be employers.

vii. Section 158 is contained in Part 7 which is entitled 'Insurance' a Part which makes specific arrangements with respect to the (non) insurance of employers of trainees. Section 158 provides access to a fund of money for the payment of compensation benefit but does not in fact provide for an insurance indemnity.

viii. The purpose of s 158 is to provide an incentive to the engagement of trainees and apprentices by relieving the employer of the burden of complying with the requirements of s 155. The employer of an apprentice or trainee is excused from holding otherwise compulsory workers compensation insurance covering the trainee or apprentice concerned. The statutory fiction is contained in s 158(3), namely, that such an employer is deemed to hold a policy of insurance. There is in fact no policy of insurance. The terms of the policy are likewise a fiction, in the sense that the employer is deemed to hold a policy on terms of the statutory policy. The compensation is paid from the consolidated fund not from the proceeds of any insurance policy: s 158(8).

ix. It is unnecessary for the purpose of s 158 to give the word 'employer' an extended meaning to include a deemed employer. The employer of the trainee or apprentice is the actual employer by whom the trainee or apprentice is employed. Clause 9(1) does not on its terms make the racing club or association the employer. On its terms, the injured worker is taken to be a worker employed by the racing club.

x. Section 158 maintains a distinction between an employer in fact and a person 'deemed to be an employer' as is apparent from s 158(7)(d). If the plaintiff's argument were correct the words 'or a person deemed to be the employer' would be redundant. The plaintiff's argument points out correctly, in relation to the doctrine of common employment, that the Act maintains separate conceptions of employer and deemed employer.

xi. Hence where the Act intends to refer to the deemed employer it does so specifically. The proper construction is informed by the circumstance that where the Act intends to include deemed employers, it does so expressly.

xii. Section 158(5) only operates in the case of trainees. That subsection is consistent with the purpose of s 158 of ensuring that the employer of the trainee is not burdened with liability for workers compensation insurance.

xiii. Furthermore, the logic of clause 9(1)(c) is that the racing club or association which conducts meetings and the like will always have compulsory insurance under s 155 of the WC Act . (This is because a race club could not conduct its business without employees and therefore it is required to have workers compensation insurance generally.) However, the true employer of the trainee may have only one employee namely the trainee. Accordingly, it may not have, and may not be obliged to have, a workers compensation insurance policy.

xiv. The distinction between a true employer and a deemed employer was pointed up by the High Court in Sydney Turf Club v Crowley (1972) 126 CLR 420 where Barwick CJ observed at 424-425:

The extension of the definition of a worker to include a stablehand riding work on a racecourse operated by a racing club is made by the Workers' Compensation Act 'for the purposes of the Act'. Such a person is deemed for the purposes of the Act to be a worker employed by the racing club. But the stablehand is not required to be treated as a worker in the employ of the racing club for any other purpose. Thus section 6(10) of the Workers' Compensation Act will not itself make the stablehand riding work for a horse trainer, a worker in the employ of the racing club within the meaning of the policy. Nor will his claim for injuries received in so riding work be, by virtue of the Workers Compensation Act, a claim in respect of bodily injury to a person arising in the course of the employment of that person in the service of the racing club.'

xv. The decision in Sydney Turf Club v Crowley turned on this distinction Barwick CJ (at 426) put the matter as follows:

In my opinion, the exception or exclusion, so far as relevant, is no more than an exception or exclusion of claims by actual employees for damages or compensation for injury received in the course of their employment by the appellant and does not extent to claims by persons, who for the purposes of the Workers' Compensation Act , would be deemed to be workers in the employ of the appellant.

xvi. Accordingly, the Sydney Turf Club case maintains the distinction between a true employer and a deemed employer for the purposes of the insurance policy.

xvii. The Ebb case was concerned with whether or not a deemed employer ought to have the benefit of the restrictions [imposed by the Workers Compensation Legislation] on workers rights and benefits: the conclusion being in the affirmative.

xviii. The proper construction of s 158 treats with a completely different circumstance, namely a clause designed to exempt an employer from the requirement to obtain insurance. 

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