JMC Pty Ltd v FCT  FCAFC 76 – Full Federal Court finds lecturer was engaged as contractor, not employee
The Full Federal Court has overturned the first instance decision of Wigney J of the Federal Court reported at  FCA 750 (previously covered in the Birchstone Brief for the week ended 1 July 2022). Contrary to Wigney J, the Full Federal Court found that the lecturer was engaged by the appellant as an independent contractor and not an employee within either the ordinary meaning of that term or the extended definition in section 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth). The result was that the appellant was not required to make superannuation guarantee contributions in respect of the lecturer.
The principal reasons for the Full Court’s decision were as follows.
- The right of the lecturer to subcontract or assign the performance of their teaching services, although subject to written consent from the appellant, was a real and substantial right inconsistent with an employment relationship.
- The requirement for the lecturer to include signed lesson plans with the invoices they gave to the appellant did not in itself lead to the conclusion they were an employee of the appellant. Rather, the requirements were consistent with the lecturer being an independent contractor and enabling the appellant to confirm the required content he was engaged to deliver was in fact delivered.
- The fact that the lecturer charged for his services by rendering an invoice was not consistent with an employment relationship. Also, the appellant’s ability to deduct costs or withhold payment for various reasons favoured characterisation of the relationship as that of principal and independent contractor.
- Regarding section 12(3), the lecturer’s right to subcontract indicated that the contract was not ‘wholly or principally’ for his labour. Rather, it was a contract for the provision of teaching services.
Eshchenko v Commissioner of State Revenue  QSC 100 – Majority interest in a landholder acquired from a related person not an excluded interest
The Supreme Court of Queensland has held that a 51% interest in a landholder that the taxpayer acquired from his father pursuant to a special resolution, after having already held a 49% interest in the relevant entity, was not an excluded interest within the meaning of section 179(6) of the Duties Act 2001 (Qld) and was therefore subject to landholder duty. In coming to this decision, the Court held that:
- the legislative intention apparent from the wording of section 179(6) was not to exclude interests acquired by the person at the time of the relevant acquisition, but to exclude those already held by the person or a related person which were aggregated with that acquired interest for the purposes of imposing landholder duty; and
- consequently, the 51% interest the taxpayer acquired from his father pursuant to the special resolution was not an excluded interest as defined.