Cagney v D&J Building Contractors Pty Ltd [2025] QCA 116

David Pearce  |  Charlotte Gordon  |  Jack Gibney

Key takeouts

• For the purpose of a common law claim, common law principles rather than administrative decisions or statutory criteria will determine whether a person is a ‘worker’ under the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WRC Act), giving consideration to the nature of the employment relationship, contractual rights and obligations and the context.
• A decision by WorkCover Queensland or the Workers’ Compensation Regulator (Regulator) to accept a compensation claim does not create an estoppel that would prevent an employer from disputing employment status in a common law damage claim.
• This case is a reminder that contractors need to exercise caution in their engagements, especially under informal terms involving cash payments – a practice that remains common in many industries, particularly construction.

Facts

Mr Cagney (Cagney) sustained injuries after falling from a ladder while performing one day of carpentry work on a construction site operated by D&J Building Contractors Pty Ltd (DJBC). The arrangement between Cagney and DJBC was informal, negotiated via text messages, and remunerated in cash. Immediately preceding the accident, Cagney and DJBC had both been subcontractors on another building site operated by a third party.

Cagney successfully claimed workers’ compensation from WorkCover, which accepted he was a ‘worker’ under the WCR Act. DJBC challenged this decision. However, the challenge was rejected by the Regulator with no further appeal pursued.

Cagney later sued DJBC for common law damages, asserting his status as an employee and contending that the Regulator’s decision created an estoppel preventing DJBC from denying his status as a worker. The District Court of Queensland rejected his claim on the grounds that:

• there was a contract for services (i.e. a commercial subcontracting arrangement) between Cagney and DJBC, rather than a contract of service (i.e. an ongoing employment relationship); and
• Cagney was not a worker under the WCR Act.

The trial judge concluded that the decision by WorkCover to provide compensation to Mr Cagney was only final in respect of the relevant provisions of the WCR Act and did not preclude DJBC from disputing his status as a worker in proceedings at common law or in equity.

Issues on appeal

Cagney appealed to the Queensland Court of Appeal. The principal issues were:

1. whether Cagney was a ‘worker’ within the meaning of section 11(1) of the WCR Act; and
2. whether the Regulator’s confirmation of WorkCover’s decision created an estoppel preventing the respondent from denying Cagney’s status as a worker.

Decision

While leave to appeal was granted, the appeal itself was ultimately dismissed. The Court of Appeal upheld the primary judge’s findings that Cagney was not a worker under section 11(1) of the WCR Act and was properly characterised as an independent contractor at the time of the injury.

Determining estoppel

Cagney asserted that:

• WorkCover’s acceptance of his compensation claim under the WCR Act necessarily entailed his status as a worker under section 11;
• the Regulator’s review, instigated by DJBC, affirmed WorkCover’s decision; and
• DJBC did not exercise its rights of appeal following the Regulator’s confirmation.

The Court of Appeal did not agree. It held that the acceptance of a compensation claim does not bind an insurer in subsequent damages proceedings, based on distinctions within the statutory scheme between compensation claims and actions at common law. Therefore, even if an estoppel arose from the Regulator’s decision, it would be confined to the compensation framework and would not prevent DJBC from challenging Cagney’s ‘worker’ status at common law. The Court concluded there was no error in the trial judge’s approach.

Test to determine if someone is a ‘worker’

The Court of Appeal confirmed that determining the nature of an employer-worker relationship includes consideration of the context in which the relationship was formed, including reference to any extraneous documents and overall purpose of the relationship. In this case, both parties operated their respective businesses as building subcontractors for a third party when the job that led to Cagney’s injury was arranged.  This was considered relevant.  The absence of any proposed changes to the usual nature of Cagney’s engagement as an independent contractor was also persuasive.

The informal and limited nature of the engagement, cash payment and absence of control over how the work was performed led the court to conclude Cagney conducted his own business and was not an employee of DJBC.