JMC Pty Limited v Commissioner of Taxation

• Jurisdiction: Australia Federal only
• Judgment Date: 29 June 2022
• Neutral Citation: [2022] FCA 750
• Date: 29 June 2022
• Court: Federal Court

Federal Court of Australia

JMC Pty Limited v Commissioner of Taxation [2022] FCA 750

File number:	NSD 175 of 2020
Judgment of:	WIGNEY J
Date of judgment:	29 June 2022
Catchwords:	TAXATION – applicant provides accredited higher education creative industries courses – Mr Harrison engaged by applicant as lecturer – respondent deemed Mr Harrison an employee of applicant under the Superannuation Guarantee (Administration) Act 1992 (Cth) – applicant issued notices of assessment of superannuation guarantee charges – applicant lodged objection to notices of assessment – respondent disallowed applicant’s objection – applicant appealed respondent’s objection decision under s 14ZZ(1) of the Taxation Administration Act 1953 (Cth) ; CONTRACTS – whether Mr Harrison was an “employee” per its ordinary meaning in s 12(1) of the Superannuation Guarantee (Administration) Act 1992 (Cth) – common law principles inform ordinary meaning of “employee” – issue of whether contract between applicant and Mr Harrison was one of employment or independent contractor – consideration of recent statement of test in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 96 ALJR 89; [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek (2022) 96 ALJR 144; [2022] HCA 2 – consideration of totality of parties’ contractual rights and obligations – parties’ contracts contained in memoranda of agreement and email correspondence – right to sub-contract or assign required applicant’s written consent – not an “unlimited power of delegation” – Mr Harrison remunerated referable to hourly rate for “teaching services” provided – provision of teaching services under the contracts could not reasonably be considered delivery of a “product or result” – balance of the terms of the contracts favoured characterisation as one of employment – Mr Harrison held to be an “employee” on ordinary meaning in s 12(1) ; CONTRACTS – whether contracts were wholly or principally “for” Mr Harrison’s labour per extended meaning of “employee” in s 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) – application of Dental Corporation Pty Ltd v Moffet (2020) 278 FCR 502; [2020] FCAFC 118 – contracts were at least “principally” for Mr Harrison’s labour – applicant contracted for the benefit of teaching services by Mr Harrison that complied with its accreditation obligations – right to sub-contract or assign work was limited given the need for applicant’s consent and compliance with accreditation obligations – Mr Harrison held to be an “employee” on extended meaning in s 12(3)
Legislation:	Fair Work Act 2009 (Cth) Privacy Act 1988 (Cth) Taxation Administration Act 1953 (Cth) ss 14ZZ(1), 14ZZO(b) Tertiary Education Quality and Standards Agency Act 2011 (Cth) ss 21(1), 49(1), 58(1) Superannuation Guarantee (Administration) Act 1992 (Cth) ss 12(1), 12(3) Higher Education Standards Framework (Threshold Standards) 2011 (Cth) Higher Education Standards Framework (Threshold Standards) 2015 (Cth)
Cases cited:	ACE Insurance Ltd v Trifunovski (2013) 209 FCR 145; [2013] FCAFC 3 ACT Visiting Medical Officers Association v Australian Industrial Relations Commission(2006) 232 ALR 69; [2006] FCAFC 109 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth(1977) 139 CLR 54 Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 40 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Commissioner of State Revenue v Mortgage Force Australia Pty Ltd [2009] WASCA 24 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 96 ALJR 89; [2022] HCA 1 Dental Corporation Pty Ltd v Moffet (2020) 278 FCR 502; [2020] FCAFC 118 Federal Commissioner of Taxation v Jayasinghe (2016) 247 FCR 40; [2016] FCAFC 79 Hollis v Vabu Pty Ltd(2001) 207 CLR 21; [2001] HCA 44 Neale v Atlas Products (Vic) Pty Ltd(1955) 94 CLR 419 On-Call Interpreters & Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) (2011) 214 FCR 82; [2011] FCA 366 OneSteel Manufacturing Pty Ltd v BlueScope (AIS) Pty Ltd (2013) 85 NSWLR 1; [2013] NSWCA 27 Queensland StationsPty Ltd v Federal Commissioner of Taxation(1945) 70 CLR 539 Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance[1968] 2 QB 497 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; [1986] HCA 1 The Queen v Allan; Ex parte Australian Mutual Provident Society (1977) 16 SASR 237 Vabu Pty Ltd v Commissioner of Taxation (1996) 81 IR 150 Victoria v Tatts Group Ltd (2016) 90 ALJR 392; [2016] HCA 5 World Book (Australia) Pty Ltd v Commissioner of Taxation (1992) 27 NSWLR 377 ZG Operations Australia Pty Ltd v Jamsek (2022) 96 ALJR 144; [2022] HCA 2
Division:	General Division
Registry:	New South Wales
National Practice Area:	Taxation
Number of paragraphs:	201
Date of last submission:	22 March 2022
Date of hearing:	7-11 December 2020 and 29 March 2022
Counsel for the Applicant	Mr J Lockhart SC with Mr J Byrne
Solicitor for the Applicant	Holding Redlich
Counsel for the Respondent	Mr L Livingston SC with Ms C Ensor
Solicitor for the Respondent	ATO Review and Dispute Resolution

ORDERS

		NSD 175 of 2020
BETWEEN:	JMC PTY LIMITED (ACN 003 572 012) Applicant
AND:	COMMISSIONER OF TAXATION Respondent

order made by:	WIGNEY J
DATE OF ORDER:	29 June 2022

THE COURT ORDERS THAT:

1. The applicant’s appeal against the appealable objection decision made by the respondent on 17 January 2020 be dismissed.

2. The applicant pay the respondent’s costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WIGNEY J:

1. JMC Pty Limited provides higher education programmes within the creative industries sector. It has campuses in Sydney, Melbourne and Brisbane. One of the degrees it offered to its students was a Bachelor of Creative Technologies (Audio Engineering and Sound Production). Mr Nichollas Harrison is a qualified sound engineer or technician. During the periods from 1 April 2013 to 30 June 2016 and 1 July 2017 to 31 March 2018 (the relevant periods), JMC engaged Mr Harrison to provide it with “teaching services”. Those teaching services comprised delivering lectures to JMC’s students at its Melbourne campus and marking student examinations or assignments.

2. The terms and conditions upon which Mr Harrison was engaged to provide teaching...