Aurora Construction Materials Pty Ltd v Victorian WorkCover Authority
[2017] VSC 573
•22 September 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2016 05249
| AURORA CONSTRUCTION MATERIALS PTY LTD (ACN 126 837 483) | First Appellant |
| EPPING TRANSPORT PTY LTD (ACN 126 847 587) | Second Appellant |
| v | |
| STACEY DE LUCA (VICTORIAN WORKCOVER AUTHORITY) | Respondent |
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JUDGE: | Ginnane J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 3 August 2017 |
DATE OF JUDGMENT: | 22 September 2017 |
CASE MAY BE CITED AS: | Aurora Construction Materials Pty Ltd v Victorian WorkCover Authority |
MEDIUM NEUTRAL CITATION: | [2017] VSC 573 |
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OCCUPATIONAL HEALTH AND SAFETY — Workplace incident — Investigation of suspected contravention of Act or regulations — Notices issued by the VWA requiring the giving of information and the production of documents — Whether Notices valid — Whether reasonable excuse for non-compliance with Notices — Occupational Health and Safety Act 2004 ss 9, 100, 111, 131, 132.
APPEALS — Appeals on questions of law from Magistrate’s orders — Fines without conviction for non-compliance with VWA statutory notices requiring the giving of information and production of documents — Appeal dismissed — Criminal Procedure Act2009 s 272.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr B Walters SC with Mr R O’Neill | Sparke Helmore |
| For the Respondent | Mr A Palmer with Mr D Chisholm | Victorian WorkCover Authority |
HIS HONOUR:
Introduction
The two appellant companies were fined without conviction in the Magistrates’ Court for failing to comply with Notices issued on behalf of the Victorian WorkCover Authority, requiring them to give information and produce documents. They appeal against the Magistrate’s decision contending that the Notices were invalid in form and that the Magistrate wrongly held that the prosecution had proved that neither of them had a reasonable excuse for not complying with the Notices.
The Notices issued on behalf of the Victorian WorkCover Authority (‘VWA’) under s 9 of the Occupational Health and Safety Act 2004 (‘the Act’) required the appellant companies, Aurora Construction Materials Pty Ltd (‘Aurora’) and Epping Transport Pty Ltd (‘Epping’), to give information and provide documents to the VWA. The Notices were issued in a VWA investigation into a motor vehicle accident in which the driver, an employee of Epping, was seriously injured and made paraplegic. I will generally refer both to Aurora and Epping as ‘the companies’. The VWA successfully prosecuted the two companies in the Magistrates’ Court for failing to comply with the requirements of the Notices. The companies were fined without conviction and ordered to pay costs. They appeal on questions of law from the Magistrates’ Court orders.
In essence, the companies’ grounds of appeal were: first, that the Notices were deficient in form and therefore invalid, and secondly, that even if the Notices were valid, the appellant companies had a reasonable excuse within the meaning of s 9(2) for failing to comply with their requirements.
Section 9 relevantly provides:
9 Power to obtain information
(1)For the purpose of ascertaining whether this Act or the regulations have been complied with or of investigating a suspected contravention, the Authority may (by written notice) require a person to—
(a)give the Authority such information as the Authority requires; or
(b)produce a document in the custody or control of the person.
(2)A person must not, without reasonable excuse, refuse or fail to comply with a requirement under subsection (1).
Penalty: 60 penalty units for a natural person;
300 penalty units for a body corporate.
Procedural history
The VWA laid two charges against Aurora and one charge against Epping for breaches of s 9 of the Act.
On 18 April 2016, the Magistrate delivered written reasons rejecting arguments that the Notices were invalid because they did not contain the information required by the Act.[1] His Honour also rejected other arguments made by the companies, that were not pursued on appeal based on the ‘accusatory principle’ and the expiration of the limitation period contained in s 132 of the Act. The VWA had conducted a previous investigation into the incident, but no charges had been brought as a result of it.
[1]De Luca (Victorian WorkCover Authority) v Aurora Construction Materials Pty Ltd & Anor (Unreported, Magistrates’ Court of Victoria, His Honour Magistrate T F Gattuso, 18 April 2016).
A further hearing in the Magistrates’ Court occurred concerning: (a) whether the prosecution had proved that the documents requested in the Notices existed and whether they were in the custody or control of the companies at the compliance date; (b) whether the companies did not provide the information and documents required in the Notices and (c) whether the companies did not have a reasonable excuse for non-compliance. The Magistrate found for the prosecution on each of these matters. The Magistrate on 28 November 2016 fined Aurora $25,000 without conviction and costs of $15,943. His Honour fined Epping $10,000 without conviction with costs of $15,943.[2]
[2]De Luca (Victorian WorkCover Authority) v Aurora Construction Materials Pty Ltd & Anor (Unreported, Magistrates’ Court of Victoria, His Honour Magistrate T F Gattuso, 28 November 2016).
Grounds of appeal
The grounds concerning the validity of the Notices were contained in paragraph 4 of the companies’ Notice of Appeal:
4.The Magistrate erred in law in finding that the Notices were valid in circumstances where the Notices failed to:
a.identify the matter(s) which constituted the suspected contravention(s) of the OHSA;
b.disclose on their face the section of the OHSA which was the subject of the suspected contravention(s); or
c.enable the Appellants to determine whether the requested documents had been validly sought.
The grounds of appeal concerning the issue of reasonable excuse were contained in paragraphs 5 to 7 of the Notice of Appeal:
5.The Magistrate erred in law in finding that the First Respondent had proved beyond reasonable doubt that the Appellants did not have a reasonable excuse for failing to comply with the Notices. In particular, the Magistrate erred in finding that the following expert legal advice to the effect that the Notices were invalid did not constitute a reasonable excuse within the meaning of s 9 of the OHSA in circumstances where he:
a.accepted that a ‘reasonable excuse’ could include a mistake of law; and
b.held that the Appellants’ conduct in following the legal advice ‘may have been a reasonable decision.’
6.The Magistrate erred in taking into account the consideration that the Appellants were aware of the possibility that the legal advice could be wrong and therefore took a risk in following that advice.
7.Alternatively, the Magistrate’s conclusion that the legal advice did not give rise to a reasonable excuse was not open to him in circumstances where:
a.the advice was given by senior counsel and a partner of a major law firm both specialising in occupational health and safety law;
b.the Appellants’ solicitor had openly stated to the VWA that he did not believe the notices were valid and his basis for that belief; and
c.the VWA had not provided any articulation of the legal basis for its position during the period of validity of the notice.
The companies sought orders that the appeal be allowed, that the orders of the Magistrate be set aside and the charges be dismissed.
Facts
On 5 December 2011, Mr Anthony Perito, a truck driver, was involved in a vehicle accident when the fully loaded concrete agitator he was driving tipped on its side whilst turning. The first appellant, Aurora, was the registered owner of the truck and the second appellant, Epping, was Mr Perito’s employer. Mr Perito was seriously injured as a result of the incident and rendered paraplegic.
A police incident report generated on that day recorded under the heading ‘At Fault/Reason’ the following words:
Yes, Appears travelling too fast and has tipped over whilst negotiating the bend in the road.
Soon after, Aurora’s General Manager, Mr D Crawford, notified the VWA of the incident. In early 2012, Shine Lawyers, acting for Mr Perito, requested the VWA to investigate the incident. The letter stated that ‘the central allegation of negligence is that immediately prior to Mr Perito’s accident, his brakes failed’ and:
The background information available to us at this stage is that the Defendant was on notice of the defective braking system by reason of previous verbal warnings. In addition, there was a general failure to maintain and service the vehicle.
The Magistrate was told in the companies’ submissions that a VWA inspector investigated the allegations and was shown service records of the truck. In an Entry Report, Inspector Lucas concluded that the allegations made about the brakes in the service request from Shine Lawyers could not be substantiated because they had been serviced by a competent person.
The two year limitation period contained in s 132 of the Act for the commencement of prosecutions arising from the incident expired on 4 December 2013.
More than two years after the incident, Shine Lawyers wrote again to the VWA on 19 June 2014 requesting under s 131(1) of the Act that a prosecution be brought against the companies or one of them. The letter enclosed expert reports and stated:
We submit that our client’s accident occurred due to breaches by Epping Transport Pty Ltd and/or Aurora Construction Materials Pty Ltd of the Occupational Health and Safety Act 2004 (‘the Act’).
On 3 July 2014, Stacey De Luca, who was a VWA Inspector, commenced an investigation into the incident.
On 9 September 2014, following telephone conversations between Mr M Hammond, the companies’ solicitor, and Inspector De Luca, Mr Hammond emailed Ms L Close, who was a Principal Lawyer, with the VWA Enforcement Group, stating that:
As the original power to prosecute expired more than a year ago, the coercive investigatory powers under the OHS Act which would be required if an investigation into the ‘act, matter or thing’ forming the basis of the request were to be possible, have also expired.
Ms Close replied stating that the VWA considered the investigation mandatory as it followed a request under s 131 of the Act.
On 15 September 2014, Mr Hammond met with VWA representatives including Ms De Luca. In an email sent to Ms De Luca, but not received by her, Mr Hammond described his impression of the meeting in the following terms:
Thank you for meeting with me earlier this morning. Unfortunately, the meeting concluded with little more than an agreement that we do not agree on the several issues raised in my emails to Louise Close dated 9 and 11 September 2014.
The Notices
Section 9 notices were served on Aurora and Epping on 23 September 2014 and required compliance by 6 October 2014. The Notices were in near identical terms and relevantly stated:
1.The Victorian WorkCover Authority (the Authority) is conducting an investigation arising from a workplace incident that occurred on Bulla Road, Bulla, Victoria on 5 December 2011. In that incident, Mr Anthony Perito (an employee of O’Hearns Transport Pty Ltd and The Trustee for Transport Investment Trust) sustained serious injuries when the Kenworth (2008) T350 Concrete Agitator he was operating failed to brake (the incident).
Requirement to Give Information Pursuant to s 9(1)(a) of the Act:
2.For the purpose of investigating suspected contraventions of the Occupational Health and Safety Act 2004 (and associated regulations), the Authority requires Aurora Construction Materials Pty Ltd to give the Authority the information described in Schedule 1 to this Notice by 4.30pm on 06/10/2014 (the Compliance Date).
Requirement to Produce Documents Pursuant to s 9(1)(b) of the Act:
3.For the purpose of investigating suspected contraventions of the Occupational Health and Safety Act 2004 (and associated regulations), the Authority requires Aurora Construction Materials Pty Ltd to produce to the Authority the documents which are in Aurora Construction Materials Pty Ltd custody or control and which are described in Schedule 2 to this Notice by 4.30 pm on the Compliance Date.
Production of information and documents pursuant to ss 9(1)(a) and (b) of the Act:
4.Unless otherwise agreed by Aurora Construction Materials Pty Ltd and the Authority in writing, the documents and information required under Schedules 1 and 2 of this Notice are to be received by the Authority at the following address by 4.30 pm on the Compliance Date:
Attention: Mr Brendan Johnson
Enforcement Group
The Victorian WorkCover Authority
Level 22/222 Exhibition Street
Melbourne Vic 3000.
NOTES
1.The Authority has the power under section 9 of the Act to obtain information. Section 9(1) of the Act provides:
(1)For the purpose of ascertaining whether this Act or the regulations have been complied with or of investigating a suspected contravention, the Authority may (by written notice) require a person to—
(a)give the Authority such information as the Authority requires; or
(b)produce a document in the custody or control of the person.
2.You should note that where a person refuses or fails to comply with a requirement under section 9(1) of the Act, without reasonable excuse, the person commits a criminal offence contrary to section 9(2) of the Act. Section 9(2) of the Act provides:
(2)A person must not, without reasonable excuse, refuse or fail to comply with a requirement under sub-section (1).
Penalty: 60 penalty units for a natural person; 300 penalty units for a body corporate.
3.You may refuse or fail to give any information if giving the information would tend to incriminate you personally. Section 9(3) of the Act provides:
(3)A notice under sub-section (1) directed to a natural person must inform the person that he or she may refuse or fail to give any information if giving the information would tend to incriminate him or her.
4.You should also note that under section 153 of the Act, it is a criminal offence for a person to give information in complying or purportedly complying with the Act that the person knows to be false or misleading in a material particular. Section 153 of the Act provides:
Offence to give false or misleading information
(1)A person must not give information in complying or purportedly complying with this Act or the regulations that the person knows to be false or misleading in a material particular.
Penalty: 240 penalty units for a natural person; 1200 penalty units for a body corporate.
(2)A person must not produce a document in complying or purportedly complying with this Act or the regulations that the person knows to be false or misleading in a material particular without —
(a)indicating the respect in which it is false or misleading;
(b)if practicable, providing correct information.
Penalty: 240 penalty units for a natural person; 1200 penalty units for a body corporate.
5.For the purposes of this Notice, including the Schedules to this Notice, unless the contrary intention appears:
‘communication’ includes oral or written communications;
‘document’ includes—
(a)a book, plan, paper or other material on which there is writing or printing, or on which there are marks symbols or perforations, having a meaning for persons qualified to interpret them;
(b)a disc, tape, paper or other device from which sounds or messages are capable of being produced including computer hard-drives, discs and tapes;
(c)diary entries, invoices, correspondence, notices, circulars, memoranda, notes, facsimiles, electronic mail and records or oral conversations including conversations, speeches and addresses at meetings, by video transmission or by telephone;
(d)electronic records (including computer files and electronic mail) which are stored on back-up tapes, hard disks, CD-ROM, DVD or other media by the Company or by third parties engaged by the Company; and
(e)telephone accounts records.
The Schedules to the Notice listed specific questions and requests for information. Schedule 1 included 5 separate topics of inquiry, by way of example, paragraph 1 was stated in the following terms:
1.In relation to the vehicle known as 2009 Green Kenworth with Concrete Agitator with [registration number]:
1.1.who was the owner of the vehicle on 5 December 2011?
1.2.who holds the Certificates of Registration?
1.3.who holds the “owners manual” or similarly described document(s) pertaining to the operation, load recommendations and use?
1.4.who holds the “warranty and service handbook” or similarly described document(s) which include recommendations for maintenance?
1.5.who holds documentation showing the load capacity of the vehicle?
1.6.who holds risk assessments, hazard identification processes, hazard management plan or similarly described documentation relevant to the use of the vehicle applicable between 1 April 2011 and 1 June 2012 inclusive?
1.7.who holds policies, procedures, Job Safety Analysis’ (JSA’s), Standard Operating Procedures (SOP's), safe work practices/method statements or similarly described documents in relation to the use/maintenance/servicing of the vehicle applicable between 1 April 2011 and 1 June 2012 inclusive?
1.8.who holds documentation relating to identification of vehicle faults applicable between 1 April 2011 and 1 June 2012 inclusive?
1.9.who holds internal maintenance schedules, maintenance reports, service records, checklists, assessments, inspection reports or similarly described documents applicable between 1 April 2011 and 1 June 2012 inclusive?
1.10.who holds external maintenance schedules, maintenance reports, service records, assessments, inspections, subsequent reports or similarly described documentation applicable between 1 April 2011 and 1 June 2012 inclusive?
1.11.what person/business(es) serviced and maintained the vehicle between 1 April 2011 and 1 June 2012 inclusive, including person/business(es) name, address and contact details?
1.12.who holds consignment dockets relating to the vehicle between 1 November 2011 and 5 December 2011 inclusive?
The companies’ response to the Notices
On 29 September 2014, Mr M Hammond, who was a lawyer of considerable experience in occupational health and safety matters and was acting for the companies, emailed Mr D Crawford of the companies stating:
I have now reviewed all the documents you provided on Friday and have come to the conclusion that notwithstanding many were provided to Inspector Lucas in early February 2012, there are some that could now be provided to WorkSafe without compromising your position in any way. Indeed their provision would show once more the level of your cooperation and once again would provide the moral high ground advantage, should that be required in the future.
I am still considering whether to provide WorkSafe with the Hart Report. Having read it through over the weekend, I cannot see that it would do you any harm and [in] fact seems to me to put a complete halt on any suggestion that the truck ‘failed to brake’. On the other hand, having not seen the precise allegation/s being made by Perito’s/Shine Lawyers nor the basis of WorkSafe’s suspicion that there has been a contravention of the Act, it’s impossible to say with any absolute confidence the Hart Report will deliver the knock out blow.
Please see below my draft response letter to WorkSafe for our discussions with Frank tomorrow. In the meantime, I need you to read the letter to make sure that I haven’t misunderstood anything particularly in relation to the timing of events.
On 3 October 2014, Mr Hammond wrote to the VWA summarising his clients’ position as follows:
1.The traffic accident which occurred on 5 December 2011 at Bulla Rd Bulla, involving Mr Anthony Perito, was investigated by the Victoria Police and the Victorian WorkCover Authority (the Authority) and both investigations concluded that the accident was caused by Mr Perito driving too fast. Both investigations also concluded that the truck being driven by Mr Perito did not contribute to the cause of the accident and that there was no evidence of brake failure.
2.The statutory limitation period in which the Authority may bring a prosecution without first obtaining an authority from the DPP, has expired.
3. Any statutory powers which the Authority or an Inspector of the Authority may have had to investigate the traffic accident involving Mr Perito which occurred on 5 December, 2011, have lapsed.
4. Any statutory powers which the Authority or an lnspector of the Authority may have had to investigate the traffic accident involving Mr Perito which occurred on 5 December, 2011, cannot continue indefinitely or be resuscitated on the basis that the Authority might make application to the DPP in writing to commence a prosecution and that such an application if in fact made, might be authorised.
5. The Authority has no statutory obligation pursuant to s. 131(2)(a) to re-investigate the occurrence of an "act matter or thing" alleged by the person making the request to prosecute, to constitute an offence against the Act which has previously been investigated by the Authority.
6. In this case, the Authority's statutory obligation to respond to the request to prosecute does not extend further than investigating the reasons why a prosecution was not brought and advising Shine Lawyers of those reasons.
In the same letter, Mr Hammond attached documents to comply with the Notices stating:
Despite all of the issues raised above and in a final attempt to bring a stop to any further unnecessary business interruptions and costs being incurred in relation to this matter, we have attached documentation relevant to the requests made in your document. In doing so, we again note the list of documents that the Authority has already been directly provided through Inspector Lucas’ investigation in February 2012.
Charges
Ms De Luca on behalf of the VWA filed charges against Aurora and Epping on 23 February 2015. The first charge against Aurora was that:
On or about 6 October 2014 at Epping in the State of Victoria pursuant to section 9(2) of the Occupational Health and Safety Act 2004 (‘the OHS Act’) you were guilty of an offence in that you, without a reasonable excuse, refused or failed to comply with a requirement to give the Victorian WorkCover Authority such information as the Authority required.
The second charge was that:
On or about 6 October 2014 at Epping in the State of Victoria pursuant to section 9(2) of the Occupational Health and Safety Act 2004 (‘the OHS Act’) you were guilty of an offence in that you, without a reasonable excuse, refused or failed to comply with a requirement to produce documents in your custody and control to the Victorian WorkCover Authority as the Authority required.
The charges were accompanied by particulars, which following amendment alleged that there had been a failure to give information or to produce documents. The amended particulars of the second charge alleged a failure by Aurora to produce consignment dockets relating to the truck that Mr Perito drove at the time of the accident for the period between 1 November and 5 December 2011 inclusive. The accident occurred on that latter day. In her evidence in the Magistrates’ Court, Ms De Luca stated that Mr Perito had informed her that he had notified his employer both verbally and in writing on his consignment dockets of ‘issues with the truck, mainly the brakes’.[3]
[3]Transcript of Proceedings, De Luca (Victorian WorkCover Authority) v Aurora Construction Materials Pty Ltd & Anor (Magistrates’ Court of Victoria, F10879483, His Honour Magistrate T F Gattuso, 13 July 2016) 15.
The VWA brought one charge against Epping which contained the same allegation as the first charge against Aurora.
The Occupational Health and Safety Act 2004
The relevant provisions of the Act state:
7 Functions of the Authority
(1) The Authority has the following functions—
…
(c)to monitor and enforce compliance with this Act and the regulations;
…
(e)to cooperate with, and give advice and information to the following persons in relation to occupational health, safety and welfare—
(i) corresponding Authorities;
(ii)registered employee organisations (within the meaning of Part 8) and other organisations representing employers or employees;
(iii) other interested persons;
(f)to disseminate information about the duties, obligations and rights of persons under this Act or the regulations and to formulate standards, specifications or other forms of guidance for the purpose of assisting persons to comply with their duties and obligations;
…
(i)to engage in, promote and co ordinate the sharing of information to achieve the objects of this Act.
…
9 Power to obtain information
(1)For the purpose of ascertaining whether this Act or the regulations have been complied with or of investigating a suspected contravention, the Authority may (by written notice) require a person to—
(a)give the Authority such information as the Authority requires; or
(b)produce a document in the custody or control of the person.
(2)A person must not, without reasonable excuse, refuse or fail to comply with a requirement under subsection (1).
Penalty: 60 penalty units for a natural person;
300 penalty units for a body corporate.
(3)A notice under subsection (1) directed to a natural person must inform the person that he or she may refuse or fail to give any information if giving the information would tend to incriminate him or her.
Note
Under section 153, it is an offence for a person to give information in complying or purportedly complying with this Act that the person knows to be false or misleading in a material particular.
…
100 Power to require production of documents etc.
(1) An inspector who enters a place under this Division may—
(a)require a person to produce a document or part of a document located at the place that is in the person's possession or control; and
(b) examine that document or part; and
(c)require a person at the place to answer any questions put by the inspector.
(2)A person must not, without reasonable excuse, refuse or fail to comply with a requirement under subsection (1).
Penalty: 60 penalty units for a natural person;
300 penalty units for a body corporate.
(3)Before requiring a person to produce a document or part of a document or to answer questions under subsection (1), an inspector—
(a)must produce his or her identity card for inspection by the person and warn the person that a refusal or failure to comply with the requirement, without reasonable excuse, is an offence; and
(b)must inform the person that he or she may refuse or fail to answer any question if answering the question would tend to incriminate him or her.
(4)A person is not liable to be prosecuted for an offence against subsection (2) if the inspector concerned failed to comply with subsection (3).
Notes
1The powers conferred by this section are limited if all or part of the place is used only for residential purposes (see section 107).
2This section does not affect legal professional privilege or client legal privilege (see section 155) or, in the case of a requirement to answer questions, the privilege against self-incrimination (see section 154).
…
111 Power to issue improvement notice
(1) If an inspector reasonably believes that a person—
(a)is contravening a provision of this Act or the regulations; or
(b)has contravened such a provision in circumstances that make it likely that the contravention will continue or be repeated—
the inspector may issue to the person an improvement notice requiring the person to remedy the contravention or likely contravention or the matters or activities causing the contravention or likely contravention.
(2) An improvement notice must—
(a)state the basis for the inspector's belief on which the issue of the notice is based; and
(b)specify the provision of this Act or the regulations that the inspector considers has been or is likely to be contravened; and
(c)specify a date (with or without a time) by which the person is required to remedy the contravention or likely contravention or the matters or activities causing the contravention or likely contravention, that the inspector considers is reasonable having regard to the severity of the risk to the health or safety of any person and the nature of the contravention or likely contravention; and
(d)set out the penalty for contravening the notice; and
(e)state how the person may seek review of the issue of the notice; and
(f)include a statement of the effect of section 117 (proceedings for offences not affected by notices).
(3)An improvement notice may include directions concerning the measures to be taken to remedy the contravention or likely contravention, or the matters or activities causing the contravention or likely contravention, to which the notice relates and may, in particular, include—
(a)a direction that if the person has not remedied the contravention, likely contravention, matters or activities (as the case may be) by the date and time (if any) specified in the notice, an activity to which the notice relates is to cease until an inspector has certified in writing that the contravention, likely contravention, matters or activities have been remedied; and
(b)interim directions, or interim conditions on the carrying on of any activities to which the notice relates, that the inspector considers necessary to minimise risks to the health or safety of a person.
(4)A person to whom an improvement notice is issued must comply with the notice.
Penalty: 500 penalty units for a natural person;
2500 penalty units for a body corporate.
(5) An offence against subsection (4) is an indictable offence.
Note
However, the offence may be heard and determined summarily (see section 28 of the Criminal Procedure Act 2009).
(6)If an application for review of a decision under this section has been made under Part 10, an inspector must not give a certificate under subsection (3)(a) in relation to the improvement notice concerned until after the review ends.
131 Procedure if prosecution is not brought
(1) If—
(a) a person considers that the occurrence of an act, matter or thing constitutes an offence against this Act; and
(b) no prosecution has been brought in respect of the occurrence of the act, matter or thing within 6 months of that occurrence—
the person may request in writing that the Authority bring a prosecution.
(2) Within 3 months after the Authority receives a request it must—
(a) investigate the matter; and
(b) following the investigation, advise (in writing) the person whether a prosecution has been or will be brought or give reasons why a prosecution will not be brought.
(3) If the Authority advises the person that a prosecution will not be brought, the Authority must refer the matter to the Director of Public Prosecutions if the person requests (in writing) that the Authority do so.
(4) The Director of Public Prosecutions must consider the matter and advise (in writing) the Authority whether or not the Director considers that a prosecution should be brought.
…
Other relevant legislation
Section 159 of the Criminal Procedure Act 2009, which the VWA relied as providing a possible path for prosecutions even though the limitation for commencing prosecutions contained in the Occupational Health and Safety Act had expired states:
159. DPP or Crown Prosecutor may file an indictment
(1) Subject to the Public Prosecutions Act 1994, the DPP or a Crown Prosecutor in the name of the DPP may file an indictment.
(2)An indictment may be filed at any time, except where otherwise provided by or under this or any other Act.
Note: Section 163 provides time limits for the filing of certain indictments.
The Magistrate’s reasons
The Magistrate dealt with the validity of the Notices in a ruling of 18 April 2016. He did not accept that the Notices required the level of particularisation and specificity submitted by the companies. He stated that s 9 of the Act did not require that the Notices must specifically identify which part of the Act or regulations may not have been complied with or what suspected contravention was being investigated. Section 9 simply specified that the VWA may require a person to give or produce, required information or documents in the person’s custody or control.
His Honour concluded that the relevant incident was clearly identified by the Notices and the ‘issue of brake failure’, if not already known, was clearly raised. The purpose of the s 9 Notices was clearly disclosed.
His Honour considered that s 9 of the Act was significantly different from, and could be readily distinguished from, the more prescriptive terms of s 111 of the Act and s 155 of the Trade Practices Act 1974. As a result, the cases relied on by the companies were distinguishable and of limited utility.
After further hearings, in a separate judgment of 5 September 2016, the Magistrate found the charges against the two companies proved. In that judgment he considered the issue of the companies’ reasonable excuse and wrote:
Whilst the decision of each of the accused to follow their legal advice may have been a reasonable choice for them to make in the circumstances, after weighing up the potential consequences, it was nevertheless a choice that they elected to make. That choice was made of their own free will, with full knowledge of the potential consequences. Whilst the choice may have been based on a reasonable belief, hope or even an expectation that they would be successful, it cannot amount to an excuse of the sort contemplated by the law.
It is true that advice in this matter was given by very experienced legal representatives, but that advice came with a caution that there was a contrary view which, if correct, could result in a charge being laid. The consequences of acting on that advice, with full knowledge of such caution, cannot now be avoided by arguing that the decision to take the risk provides a reasonable excuse.
As the Prosecution argued in its closing submission, it would make a mockery of the law if circumstances were to lead to an outcome whereby if an accused’s lawyer’s advice was correct, then the accused would not have to comply with the s 9 notice for invalidity, but if the accused’s lawyer’s advice was wrong, they would still not have to comply with the s 9 notice, despite its validity, because of a reasonable excuse defence based on the acceptance of that advice.
The Magistrate also concluded that:
Whilst the defence argued that a reasonable excuse can extend beyond mistakes of fact, to also include mistakes of law, that the tests being the reasonableness of the mistake, I do not find that the mistake was a reasonable one in the circumstances of this case.
Whilst it may have been a reasonable decision to take the risk and accept the advice, that does not equate to a reasonable excuse for the consequences if the advice is proven to be wrong. It is a matter that may have some relevance in mitigation of penalty, but nothing more than that. [Italics in original].
Submissions concerning the s 9 Notices
The companies submitted that the s 9 Notices were invalid as they did not specify the matter that constituted or might constitute a contravention of the Act or regulations so as to enable them to learn from the face of the Notices that the information and documents required to be provided or produced related to that matter. The companies alleged that the Notices should have, but did not, state the nature of the breaches of the Act or regulations which the VWA suspected had occurred. The Notices did not provide a point of reference for the recipient to judge whether they validly required the specified information to be given or the specified documents to be produced.
The parties made extensive reference to cases decided under s 155 of the Trade Practices Act. I will refer to those decisions later. The companies submitted that although the words of s 9 of the Occupational Health and Safety Act differed from the words of s 155(1), the more general the power said to authorise the requirement that information be given and documents produced, the more was the need for the Notice containing that requirement to specify the basis for the exercise of the power.
The companies pointed out that the Act contains more than 50 provisions that might be contravened and the regulations more than 200 such provisions. For example, s 21 contains many possible offences that might arise from a work place incident. A recipient of a s 9 Notice could not determine whether it was validly connected to a suspected contravention of the Act or regulations without being told the provisions to which the suspicions related. Merely stating that the truck ‘failed to brake’, as the Notices did, was not to allege a contravention of the Act or the regulations. The Notices should have specified what the VWA alleged each company, or some other person, failed to do under the Act or the regulations. The companies gave the following example of what the VWA might have validly required: ‘The VWA is investigating X company for suspected contraventions of ss 21(1) and (2)(a) for failing to provide or maintain plant and ss 21(1) and (2)(b) for failing to make arrangements for ensuring so far as reasonably practicable, safety and the absence of risks to help in the connection with the use, handling, storage or transport of substances in that it failed to properly maintain the brakes of the relevant truck’.
The VWA agreed that a notice under s 9 should provide a point of reference by which to judge whether the requested information and documents had been validly sought. However, the VWA denied that there was any requirement that s 9 notices identify a specific provision of the Act or regulations that are the subject of suspected contraventions. The exercise of the power in s 9 is subject only to the condition that it is exercised ‘for the purpose of ascertaining whether this Act or the regulations had been complied with or of investigating a suspected contravention’. Because the power in s 9 was intended to be used in investigations, the VWA would be acting prematurely in most cases to nominate the provisions of the Act or regulations that were suspected of having been contravened.
Section 9 could be contrasted with other provisions of the Act such as s 111 which requires that an improvement notice issued under the Act state the basis for the inspector’s belief that a person was contravening or had contravened a provision of the Act or regulations in circumstances which make it likely that the contravention would continue to be repeated.
Legal authorities relevant to s 9 Notices
As mentioned the parties referred to cases concerning notices given under s 155(1) of the Trade Practices Act requiring the furnishing of information or the production of documents. The early years of that Act led to a great deal of litigation about s 155 (1). Those decisions have been applied in the interpretation of similar statutory provisions.[4] Section 155(1) states:
Where… the Chairman… has reason to believe that a person is capable of furnishing information, producing documents… relating to a matter that constitutes, or may constitute, a contravention of this Act… a member of the Commission may, by notice in writing served on that person, require that person —
(a) to furnish to the Commission…any such information;
(b) to produce to the Commission…any such documents;
…
[4]Thorson v Pine (2004) 139 FCR 527 (Workplace Relations Act 1996(Cth)), Construction Forestry Mining and Energy Union v Alfred [2016] FCA 591 (Fair Work Act 2009 (Cth)) and D’Anastasi v Environment, Climate Change and Water (NSW) (2011) 81 NSWLR 82 (Protection of the Environment Operations Act 1997 (NSW)).
The key phrase in s 155(1) is ‘relating to a matter that constitutes, or may constitute, a contravention of this Act’. The key phrase in s 9 is ‘for the purpose of investigating a suspected contravention’ [of the Act or regulations]. Caution should be exercised in applying decisions concerning other statutes to the words of s 9. However as previously mentioned, the principles developed in cases decided about notices issued under s 155 have been applied to other differently worded statutes authorising a regulator to serve a notice requiring a person to give information or produce documents.
The following points have been adopted in respect of notices issued under s 155 of the Trade Practices Act. First, that the notice must show an entitlement to obtain the information.[5] Even if this is not expressly required by the words of the section, this is regarded as a requirement of the proper exercise of power.
[5]Federal Commission of Taxation v Australia and New Zealand Banking Group (1979) 143 CLR 499, 515 (Gibbs ACJ), applied in Pyneboard Pty Ltd v Trade Practices Commission (1982) 39 ALR 565, 570 (Northrop, Fisher and Deane JJ).
The general requirement that the notice must show the entitlement of the regulator to seek the documents in fact stems from the following statement of Gibbs ACJ in Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd[6] concerning the Commissioner’s powers to issue such a notice:
To be valid a notice to produce documents under s. 264(1)(b) must of necessity identify with sufficient clarity the documents which are required to be produced. However the notice must in my opinion go further: it must show the person to whom it is addressed that any document which he is required to produce is one whose production the Commissioner is entitled to require.
[6]Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 515.
Secondly, the notice is not to be construed in an overtechnical or hypercritical manner.[7] Thirdly, the notice need not plead all the facts necessary to found a contravention or possible contravention of the Act. It need only state the facts on which the suspected contravention is based.[8] Fourthly, the notice does not have to specify the sections of the Act that are suspected of being contravened.[9]
[7]Pyneboard Pty Ltd v Trade Practices Commission (1982)39 ALR 565, 571 (Northrop, Deane and Fisher JJ). SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357, 370 (Fisher and French JJ).
[8]Ibid 371-2.
[9]Ibid.
Fifthly, the facts specified in the notice must be capable of constituting a contravention of the relevant Act.[10] Sixthly, the issuing of the notice is part of the investigation of suspected contraventions of the Act and will be issued before the completion of the investigation.
[10]Seven Network Ltd v Australian Competition and Consumer Commission (2004) 140 FCR 170, 182-3[49] (Emmett and Sackville JJ).
Most of the principles that I have drawn from the s 155 cases are discussed in two decisions of the Full Court of the Federal Court. First, Northrop, Deane and Fisher JJ stated in Pyneboard Pty Ltd v Trade Practices Commission,[11] that:
The requirement that a notice under s. 155 (1) show the person to whom it is addressed that the Commissioner is entitled to require that he furnish the information or produce the documents which the notice specifies will not be satisfied unless it appears from the notice that the information or documents sought are information or documents ‘relating’ to one or more ‘matters’ of a kind described in the sub-section.[12]
…
The relevant question is whether the information or documents sought are capable, in a broad investigative context, of being properly regarded as related to any one of the ‘matters’ which the notice identifies.[13]
[11](1982) 57 FLR 368 (‘Pyneboard’). The High Court dismissed an appeal from the Federal Court decision, but the appeal concerned grounds not of present relevance: Pyneboard v Trade Practices Commission (1983) 152 CLR 328.
[12]Ibid 375.
[13]Ibid 376.
Secondly, the joint judgment of Fisher and French JJ in SA Brewing Holdings Ltd v Baxt,[14] contains a helpful summary of the authorities concerning notices under s 155. After referring to the Pyneboard decision, their Honours stated:
It is clear from what follows in that judgment that the description of the relevant ‘matter’ must go beyond a mere assertion that it constitutes or may constitute a contravention of some identified section. The notice must disclose the necessary relationship between the information sought and the matter in respect of which it is sought. This requires a sufficient description of the ‘matter’ to enable the relationship to be discerned. We shall refer to this for convenience as the ‘entitlement disclosure condition’.
As with the requirement that the notice be clear in its terms, this will not support an over-technical or hypercritical approach to its construction: … And it is fundamental, that given the investigative nature of the power under consideration, there is no requirement that the notice ‘plead’ all the facts necessary to constitute a contravention or possible contravention. The words ‘may constitute’ enable a court to judge from the material in the notice whether, if other facts which may or may not have occurred come to light, the whole body of facts would constitute a contravention … In doing so however, it is not necessary for the Court to determine whether a contravention has occurred or will occur, nor will it idly speculate or draw on improbable circumstances to uphold the validity of a notice.[15]
[14](1989) 23 FCR 357.
[15]Ibid 370 (Citations omitted).
After describing the ‘entitlement disclosure condition’, their Honours stated:
Neither the constructional nor policy supports for the entitlement disclosure condition requires that a notice plead a contravention or suspected contravention. It is fundamental that the proper progress of legitimate investigation be not disrupted by what may amount to a demurrer or strike out motions on the terms of the notice. Where, however, the ‘matter’ referred to in the notice is incapable, after allowing for undiscovered facts, of amounting to a contravention, then the issue of the notice is not a valid exercise of power. As Brennan J said W A Pines Pty Ltd v Bannerman …:
The character of the matter is determined objectively, and if it could be shown that a convention would not be constituted by a concatenation of facts which exist or have existed and facts which might reasonably be suspected to exist or to be about to exist or to have existed, there would be no ‘matter’ relating to which a person could furnish information etc, as provided for by s 155(1).[16]
[16]Ibid 371–2.
Consideration of the submissions about the Notices
It is important as a first step to take into account that the VWA’s decision to issue the Notices followed Shine Lawyers’ request made on behalf of Mr Perito under s 131 of the Act. As stated, that provision enables a person who considers that the occurrence of an act, matter or thing constitutes an offence against the Act, when no prosecution has been brought, to request in writing that the VWA begin a prosecution. Thereafter within three months, the VWA must investigate the matter and advise the person what prosecution has, or will be, brought or give reasons why it will not be brought. Therefore, in issuing the Notices, the VWA was investigating the occurrence of an act, matter or thing which Mr Perito, through his lawyers, alleged contravened the Act. The effect of s 131 is that when so requested the VWA must hold an investigation. The purpose of the VWA investigation was to gather facts and material in order to identify facts.[17]
[17]Definition of ‘investigate’, Susan Butler (Ed), Macquarie Dictionary (Macquarie Dictionary Publishers, Vol 1, 7th ed, 2017) 797.
It is also of importance that the VWA did not issue the Notices under the first limb of s 9(1) which permits the issuing of a notice ‘for the purpose of ascertaining whether this Act or the regulations have been complied with’. That is probably explained by the fact that the Notices were issued as part of an investigation that followed Mr Perito’s request made under s 131(1). Following that request, the VWA was obliged to ‘investigate the matter’, being the occurrence of an act, matter or thing that the person requesting the investigation considered constituted an offence against the Act. The VWA may have considered that the path by which the investigation had arisen made the second limb of s 9(1) the appropriate limb under which to issue the Notices.
Unlike an improvement notice, a s 9 notice is issued as part of the VWA’s investigative role which role is conferred by s 7. In conducting an investigation, the VWA may need to obtain information or documents before reaching its conclusion as to whether particular provisions of the Act have been contravened.
As previously mentioned, s 9 unlike s 155 of the Trade Practices Act does not refer to ‘a matter’ but authorises the issue of a notice for the purposes of investigating a suspected contravention of the Act or the regulations. The cases to which I have referred establish that the notice must allege facts establishing that the VWA was entitled to require the recipient to give information or produce documents, although s 9 contains no express statement of that requirement. The effect of the authorities is that a notice must sufficiently describe the workplace incident being investigated and can only request information or documents that relate to that identified incident. The recipient of a s 9 notice is entitled to assess its validity to see if the requested information and documents are referrable and relevant to the identified incident.
The investigatory powers of the VWA are broad and at the time when a s 9 notice is issued there is no requirement that the particular provisions of the Act, which the VWA suspects have been contravened are specified. The identification of any specific provisions of the Act or regulations said to have been contravened is one of the tasks of the investigation. Section 9 does not require the VWA to do more than describe in the notice the facts on which its suspicion of contraventions of the Act or regulations are based. The VWA was entitled to issue a s 9 notice as part of its investigation of Mr Perito’s accident and who was legally responsibility for it.
To suspect something is to imagine ‘with insufficient proof or with no proof’.[18] When the VWA has no, or insufficient, proof of a suspected contravention of the Act or regulations, s 9 does not require the VWA to specify a contravention of a particular provision. In complex situations the VWA, at the commencement of an investigation, may not be able to identify the acts that caused the incident, for instance, a workplace fire causing injury to employees could have a number of possible causes. The Act does not require a notice to identify who may have committed or been responsible for any contravention.
[18]Definition of ‘suspect’ Susan Butler (Ed), Macquarie Dictionary (Macquarie Dictionary Publishers, Vol 2, 7th ed, 2017) 1508.
Other analogous provisions of the Act do not support the companies’ submissions that a s 9 notice must particularise the provisions of the Act suspected of having been contravened. Rather, they show that Parliament made that requirement clear when it was intended. For example, s 111(2)(b) with respect to an improvement notice, requires that such a notice must ‘specify the provision of this Act or the regulations that the inspector considers has been or is likely to be contravened’. Likewise s 104 requires that a search warrant must state the offence suspected. Section 100, on the other hand, which enables an inspector who enters a workplace to require a person to produce documents or to answer questions, does not require any provision to be specified in the notice. These other provisions of the Act are relevant to the interpretation of s 9 because the primary object of statutory interpretation is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute.[19]
[19]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 [69]; D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis, 8th ed, 2014) 147.
The Notices state that the employee sustained serious injuries when the vehicle he was operating ‘failed to brake’. They did not specify whether the allegation is that the vehicle failed to brake because the driver failed to apply the brakes or because the brakes did not operate entirely or to some degree, once applied. However, I consider as the investigation was ongoing, it was sufficient to state that the vehicle ‘failed to brake’.
In my opinion, the Notices issued to the companies do sufficiently indicate that the VWA was acting within power as part of its investigation of the incident on 5 December 2011 and establish its entitlement to seek the information and documents. They identify the facts which founded the VWA’s suspicion that there has been a contravention or contraventions of the Act or the regulations. The Notices have to be read as a whole and not in an overtechnical or hypercritical manner. When that it done the following appears. First, the Notices state that the VWA is investigating a workplace incident. Secondly, the Notices state where that incident occurred. Thirdly, the Notices state who was involved in that incident and who is said to be the employer. Fourthly, the Notices state the consequences of the injuries to the employee. Fifthly, the Notices state how, in the immediate sense, those injuries occurred. Sixthly, the Notices state that information and documents are required for the purposes of investigating suspected contraventions of the Act.
The ‘reasonable excuse’ grounds of appeal
The companies’ grounds of appeal 5, 6 and 7 contend the Magistrate erred in law in finding the appellants did not have a ‘reasonable excuse’ within the meaning of s 9(2) for not complying with the requirements contained in the Notices.
As previously stated, the Magistrate’s reasons for finding that the companies did not have a reasonable excuse were that:
Whilst the decision of each of the accused to follow their legal advice may have been a reasonable choice for them to make in the circumstances, after weighing up the potential consequences, it was nevertheless a choice that they elected to make. That choice was made of their own free will, with full knowledge of the potential consequences. Whilst the choice may have been based on a reasonable belief, hope, or even expectation that they would be successful, it cannot amount to an excuse of the sort contemplated by the law.
It is true that advice in this matter was given by very experienced legal representatives, but that advice came with a caution that there was a contrary view which, if correct, could result in a charge being laid. The consequences of acting on that advice, with full knowledge of such caution, cannot now be avoided by arguing that the decision to take the risk provides a reasonable excuse.
…
Whilst the defence argued that a reasonable excuse can extend beyond mistakes of fact, to also include mistakes of law, with the test being the reasonableness of the mistake, I do not find that the mistake was a reasonable one in the circumstances.
I will restate and expand upon the dealings between the companies and the VWA at about the time the Notices were issued. As previously stated, on 9 September 2014 Mr Hammond emailed Ms Close of the VWA referring to the 2012 investigation of the incident and to Mr Perito’s attempt to have WorkSafe effectively re-investigate the crash. He referred to the limitation period in s 132 and suggested that a meeting occur the following day at VWA’s office. Mr Hammond had sought advice from senior counsel experienced in occupational health and safety matters.
Later that day, Ms Close replied to Mr Hammond inviting the submission of any material relevant to the investigation. She stated that the VWA considered that investigations were mandatory when the conditions of s 131(1) were met. However, she invited elaboration of the concerns Mr Hammond had raised and said that the VWA would consider any specific issues raised. Mr Hammond replied that all relevant information about the crash was provided to the VWA and Victoria Police shortly after the crash and ’in cooperation with the respective investigations’. He suggested that WorkSafe retrieve and examine those investigations and the information already provided by Aurora ‘as part of it meeting its obligations under s 131(2)’. He suggested that WorkSafe needed to decide the question of what it was investigating and that the relevant ‘matter’ to be investigated was why WorkSafe had not brought a prosecution. He referred to the expiration of a limitation period and expressed Aurora’s wish to assist WorkSafe to comply with its statutory obligations.
The companies’ ‘reasonable excuse’ submissions
The companies’ submitted that the VWA had not proved that, as at the compliance date, 6 October 2014, that they did not have a reasonable excuse for non-compliance with the Notices. Their reasonable excuse was that they had sought legal advice from specialist legal advisors, they had relied on that advice in declining to provide all the information or documents sought and had, through their legal advisers, written to the VWA setting out their legal concerns, but had received no reply. It was reasonable for the companies not to comply with the Notices at least until the VWA provided a considered response to their letter. The companies relied on VWA’s failure to provide them with any indication of its legal advice. It had only said that it had received advice from counsel and did not agree with Mr Hammond’s legal analysis. While the VWA did not have a strict obligation to disclose details of its legal position, its failure to do so made the companies’ approach to compliance all the more reasonable. The significance of the VWA’s unwillingness to provide details of its legal advice was to be assessed against the VWA’s statutory functions including:
(a) to co-operate with, and give advice and information to interested persons; and
(b) to disseminate information about the duties, obligations and rights of persons under the Act or the regulations for the purpose of assisting persons to comply with their duties and obligations.[20]
[20]Section 7(1)(e)(iii), (f) and (i).
While the companies accepted that the VWA had no strict legal obligation to disclose the details of its legal position about the validity of the notices, its choice not to do so was relevant to the reasonableness of the companies’ approach.
The approach adopted in the New South Wales decision in R v Bacon[21] was applicable to the terms of s 9 and established that it was an ingredient of the offence of non- compliance that the accused had no ‘reasonable excuse’. That element must be proved by the prosecution beyond reasonable doubt. The authorities established that the determination of whether matters, circumstances or things provided a ‘reasonable excuse’ was a matter for the judgment of the Court. The words ‘reasonable excuse’ should not be given a narrow meaning as they appear in a provision which imposes a criminal sanction for its breach and amounts to a drastic derogation from the ordinary liberties of citizens.[22] The words a ‘reasonable excuse’ could include a mistake of law or fact.
[21][1977] 2 NSWLR 507, 510.
[22]Ganin v NSW Crime Commission (1993) 32 NSWLR 423, 436.
Mr Hammond’s evidence established that, acting on the companies’ behalf, he had challenged the validity of the VWA’s investigation by email and telephone calls and had hand delivered a letter, setting out objections to the Notices. He had met with his clients on many occasions and had taken them through the contents of the Notices and showed the companies a draft of the letter to be sent to the VWA. He had consulted with senior counsel. The companies accepted and relied on this advice.
The reasonableness of the companies’ excuse as at 6 October 2014, the date for compliance, should be assessed against the following features of the legislation. First, the two year limitation period for the commencement of prosecutions issued by the VWA (subject to the observations of the Court of Appeal in DPP v Patrick Stevedores Holdings Pty Ltd)[23]. Secondly, the requirement that s 9 notices must state the purpose for which the power is exercised and thirdly, the inclusion of a defence of reasonable excuse in s 9(2).
[23]Director of Public Prosecutions v Patrick Stevedores Holdings Pty Ltd (2012) 41 VR 81 (‘Patrick Stevedores’).
The Magistrate had been wrongly distracted by the notion that the companies had exercised a ‘choice’ in not complying with the Notices and as a result, had wrongly limited the concept of reasonable excuse and made an error or law. Once it was accepted that a mistake of law could be a reasonable excuse, it could not be maintained that a choice made on the basis of legal advice, could not be a reasonable excuse for non-compliance with the Notices. It is inherent in the giving of legal advice that the advice may be mistaken.
VWA’s ‘reasonable excuse’ submissions
The VWA submitted that the assessment of the reasonableness of the excuse was a matter for the judgment or assessment of the court. The judgment or assessment was capable of different outcomes. Reasonable minds could differ about the reasonableness of an excuse and no error of law was involved in the Magistrate’s conclusions. The companies had to establish that it was not open to the Magistrate to find that they did not have a reasonable excuse. They had not done so.
In fact, the companies had not claimed that they failed to comply with the Notices on the basis of a mistake of law, but rather on the basis that their legal advisor, Mr Hammond, had advised them that, in his opinion, the Notices were invalid. But, he had also advised them that the VWA disagreed with this opinion. The VWA submitted that it was open to the Magistrate to conclude that a person who knowingly runs the risk of not complying with a notice where non-compliance might constitute a criminal offence does not have a reasonable excuse for non-compliance.
Mr Hammond’s opinion was based on a number of matters, including the expiration of the two-year limitation period fixed by s 132(a) of the Act. However, that advice was given with the knowledge: that the Court of Appeal had reached a different conclusion in the Patrick Stevedores case and that the VWA held a contrary view to Mr Hammond about its powers under s 9; and with awareness that there was a risk that the companies could be committing an offence if they did not comply with the Notices. The Magistrate had not erred in taking into account that the companies had ‘taken a choice’ by following, what transpired to be, incorrect legal advice. They had indeed exercised a choice.
The VWA drew attention to the following passages of Mr Hammond’s oral evidence in cross-examination at the Magistrates’ Court that, it submitted, indicated that the companies chose to rely on legal advice after a calculated assessment of risk rather than under a bona fide mistake of law:
COUNSEL: And therefore they’re making a decision which is in some ways based on an assessment of risk, isn’t it?
WITNESS:Yes.
COUNSEL:There’s a risk that the notice might be valid and therefore we might be committing if we don’t comply with it. You’ve got to be telling them there’s that risk, aren’t you?
WITNESS:Of course I’m telling them the risk.
COUNSEL:Yes so when they’re making their decision as to whether or not to comply with the notice, they’re making that decision based on an assessment of risk. If Mr Hammond is right, then we’re in the clear but if Mr Hammond is wrong, then we are committing an offence?
WITNESS:They’re making their assessment based on their knowledge of my experience in the jurisdiction, they’re making their assessment, of course of the risks, as we all agree. Any litigation has its risks. Their decision to do what they did were my instructions.
COUNSEL:And you knew that you were putting – you knew that there was a risk that if your client didn’t comply with the notice that it would be committing an offence, you knew that risk existed?
WITNESS:I thought it was an extremely small risk…[24]
[24]Transcript of Proceedings, De Luca (Victorian WorkCover Authority) v Aurora Construction Materials Pty Ltd & Anor (Magistrates’ Court of Victoria, F10879483, His Honour Magistrate T F Gattuso, 13 July 2016) 68-69.
Mr Hammond also gave the following evidence in cross-examination:
COUNSEL:So really the point we’re at, I think I understand your evidence and again I’m wanting to not be critical about it. Your position was fundamentally that the notice was invalid, therefore it didn’t have to be complied with. But nevertheless you’d ask your client to see what documents they have that were relevant to the request?
WITNESS:Well relevant to the investigation.
COUNSEL:Relevant to the investigation?
WITNESS:That we’d been told about which was an investigation which is the preamble to the section 9 document.[25]
[25]Ibid 83.
The VWA submitted that the evidence suggested that the companies miscalculated their risk of criminal liability by choosing not to comply with the Notices. That miscalculation was not a reasonable excuse for non-compliance.
Authorities on ‘reasonable excuse’
The parties referred to authorities about the content of a ‘reasonable excuse’ many of which concerned differently worded statutory provisions.
In Taikato v The Queen,[26] a woman had been charged with possessing a prohibited item under the Crimes Act 1900 (NSW) after police searched her handbag and found a pressurised can of formaldehyde. She said, and it was accepted, that she carried the canister in case she was attacked, having been the victim of a burglary some years before. The offence provided a defence:
if the person satisfies the court that he or she had a reasonable excuse for possessing it or possessed it for a lawful purpose.
[26](1996) 186 CLR 454.
Brennan CJ, Toohey, McHugh and Gummow JJ accepted that, however desirable an object that criminal laws be applied uniformly, the courts must give effect to their own ideas of what is a reasonable excuse. Their Honours stated:
However, the reality is that when legislatures enact defences such as ‘reasonable excuse’ they effectively give, and intend to give, to the courts the power to determine the content of such defences. Defences in this form are categories of indeterminate reference that have no content until a court makes its decision. They effectively require the courts to prescribe the relevant rule of conduct after the fact of its occurrence. That being so, the courts must give effect to the will of Parliament and give effect to their own ideas of what is a ‘reasonable excuse’ in cases coming within s 545E even when it requires the courts to make judgments that are probably better left to the representatives of the people in Parliament to make. It is therefore impossible to say that ‘self-defence’ could never be a ‘reasonable excuse’ for the purpose of s 545E(2) and perhaps even s 93G.[27]
[27]Ibid 466.
Dawson J, in a dissenting judgment, stated:
A reasonable excuse is no more or less than an excuse which would be accepted by a reasonable person. It is different from a lawful excuse (36) but, as has already been noted, it is difficult to conceive of an unlawful purpose which would constitute a reasonable excuse. Reasonableness provides a test which is well-known in both criminal and civil law and, though it may involve a judgment of degree, has a ready application in widely differing circumstances. The fact that the test of reasonableness frequently involves a question of degree so that minds may differ upon the answer does not relieve a tribunal of the duty to apply the test where that is the test laid down and does not justify confining its scope for the sake of greater precision or certainty.[28]
[28]Ibid 470. Kirby J also dissented.
In Ganin v New South Wales Crime Commission[29], the New South Wales Court of Appeal considered whether a person appearing at a hearing before the Commission had a reasonable excuse for not answering a question. Kirby P, with whom Meagher JA and O’Keefe AJA agreed, stated:
There is no apparent reason to read down exemptions for ‘reasonable excuse’ in s 18(2) of the Act. On the contrary, there is every reason to give the words used their ordinary construction. They simply ask whether the refusal to answer the question was ‘without reasonable excuse’. As Ireland J rightly pointed out, the question is not whether the excuse stated or subjectively conceived was reasonable. It is whether, at the relevant time of refusal to answer the question as required, there was, or was not, a reasonable excuse. In accordance with orthodox canons of construction these words would not be given a narrow meaning. They appear in a provision which imposes a criminal sanction for its breach. They appear in an enactment which, as has been said, amounts to a drastic derogation from the ordinary liberties of citizens. They appear in a subsection which, giving ample meaning to the words ‘without reasonable excuse’ will be defensive of fundamental rights recognised both by the common law and by international law.
Of course the ‘reasonable excuse’ must be one relevant to the refusal or failure to answer a question.[30]
[29](1993) 32 NSWLR 423.
[30]Ibid 436.
Kirby P stated that it was undesirable that a different formulae should be substituted for that which parliament had enacted by the words ‘reasonable excuse’.[31]
[31]Ibid 439.
The parties also referred to the decision in Australian Securities and Investments Commission v Albarran[32], which concerned legislation providing that a person appearing as a witness at a hearing must not refuse or fail to answer questions, but which also provided that that requirement did not apply to the extent that the person had a reasonable excuse. A defendant bore an evidential burden in relation to the reasonable excuse. Mr Albarran’s reason advanced for not answering questions was that he relied on legal advice, but Jacobson J considered that he had not established that he so relied. His Honour stated:
[32](2008) 169 FCR 448.
First, the question of what constitutes ‘reasonable excuse’ is to be determined from the terms and structure of the particular statute and the circumstances of each particular case.
Second, reasonable excuse is not confined to physical or practical difficulties in complying with the statutory prescription. It includes any excuse which would be accepted by a reasonable person as sufficient to justify non-compliance but it is necessary to bear in mind the importance of the particular statutory prescription to the overall statutory regime.
Third, the question of what constitutes reasonable excuse involves an objective determination in all the circumstances. These include the adverse consequences to an individual of being compelled to answer and the adverse consequences to an inquiry if the questions are not answered.
Applying these principles, it is quite plain that reliance on legal advice as a ground of reasonable excuse would be inconsistent with the statutory scheme contained in particular in s 1292 of the Corporations Act and ss 68, 217 and 219 of the ASIC Act.
The primary function of the Board is to hear disciplinary proceedings bought by ASIC in respect of auditors and liquidators. Privilege against self-incrimination and privilege against exposure to a penalty do not constitute reasonable excuse for failing to answer. It seems to me that the Board’s statutory functions would be rendered otiose if reliance on legal advice were to constitute reasonable excuse.
In my view, support for this proposition is to be found in the remarks of the High Court in Ostrowski v Palmer per Gleeson CJ and Kirby J; per McHugh J and per Callinan and Heydon JJ
The point was put in strong terms by Callinan and Heydon JJ at [85] as follows:
A mockery would be made of the criminal law if accused persons could rely on, for example, erroneous legal advice, or their own often self–serving understanding of the law as an excuse for breaking it…
It is true that in Ostrowski their Honours were concerned with s 24 of the Criminal Code (WA) which applied to mistakes about the factual ingredients of an offence, not mistakes about the existence of the law creating the offence, or to the question of reasonable excuse. However, the approach stated by their Honours is applicable by analogy in the present context.
In Re Modern Woodcraft Pty Ltd (in liq) Lindgren J appears to have considered that reliance on legal advice was reasonable excuse for failure to file affidavits within the time limited for the purpose of s 597A(3) of the Corporations Law. Nevertheless for the reasons stated by his Honour, that decision is confined to its own facts.[33]
[33]Ibid 462-3 (citations omitted)
His Honour cited the decisions of the Federal Court in Bank of Valletta PLC v National Crime Authority[34] in support of his propositions.
[34](1999) 165 CLR 45 (Hely J) and (1999) 165 ALR 60 (Wilcox, Whitlam and Lehane JJ).
In MacDonald v Australian Securities Commission (No 2),[35] Hill J considered a notice to produce books issued by the Commission. The enabling section creating an offence for non-compliance which applied where the Commission was satisfied that a person had, without reasonable excuse, failed to comply with the notice to produce. His Honour concluded that the mere fact that litigation was current at the time the certificate of failing to comply with the notice was given did not constitute a reasonable excuse for failure to produce the documents. His Honour stated:
If the addressees of the notice wish to challenge the certificate on the basis that the issue of the certificate was vitiated in some way then such a challenge would presumably proceed under the ADJR Act. In the absence of any evidence other than the certificate and the common ground of the parties that no documents in fact have been produced by the notices and no suggestion of any excuse other than the litigation which has to date been unsuccessful, is hard to see how the respondents to the Commission’s application can succeed. The mere fact that the litigation is current at the time a certificate is given does not constitute in my view reasonable excuse. This must be particularly so where the grounds of that litigation have now been found by me to be ill-founded. [36]
[35](1994) 48 FCR 210.
[36]Ibid 220.
In this case no legal challenge was made to the Notices before the expiration of the time for compliance. The evidence suggests that some documents were produced but the Magistrate found, and his finding was not challenged on appeal, that other requested documents relating to the vehicle were not produced and were in the possession or the control of the companies.
As mentioned, the companies relied on the decision in R v Bacon,[37] in which a group of squatters who were engaging in a protest occupation of a property to defend the rights of tenants subject to eviction were charged with a summary offence that provided:
A person who enters or remains in or upon any part of a building or structure, or any land occupied or used in connection therewith and has no reasonable cause for so doing is guilty of an offence.
[37](1977) 2 NSWLR 507.
Street CJ, accepted that the squatters genuinely believed in the validity and propriety of their actions, stated that a bona fide mistake of fact or law, based on reasonable grounds could amount to a reasonable cause but cautioned that ‘the mistake itself must be reasonable’,[38] stating:
In short, where the inquiry is, as here, centred upon a bona fide mistake of law, the character of reasonableness must be found, not only in the ultimate mistake, but also in every error or mistake that may be present in the stages and elements leading up to the ultimate mistake of law.[39]
[38]Ibid 512.
[39]Ibid.
The sum of these authorities is that it is the Court, in this case the Magistrate, who had to assess whether, in all the circumstances, matters relied on as constituting a reasonable excuse for failing to comply with the Notices, were reasonable. The existence of a mistake does not relieve the Court of its task in assessing the reasonableness of the excuse.
Consideration of submissions
The parties accepted that once a ‘reasonable excuse’ was raised by the accused, the absence of the reasonable excuse must be proved by the prosecution beyond reasonable doubt as an element of the offence.
The companies ran the risk that if they did not comply with the Notices they might be prosecuted and in that event need to be able to provide evidence of a reasonable excuse for non-compliance. The evidence suggests that the companies acted on legal advice, although knowing that the VWA did not agree with that advice. The legal advice was given after Mr Hammond had consulted with senior counsel who was very experienced in the field of occupational health and safety law. No written advice from senior counsel was in evidence. In my opinion, it is not material that the VWA did not reveal the detail of its legal advice. It made clear that it maintained that the Notices were valid. Despite the expiration of the two year limitation period the VWA was entitled to seek to have the DPP file an indictment at any time or seek written authorisation to commence a prosecution.
The Magistrate did not hear evidence from any company owner, director or employee who made decisions on behalf of the companies about compliance with the Notices. The companies did not commence a legal challenge to the Notices despite the VWA making it clear that the Notices had to be complied with. The companies produced some documents, but the Magistrate found, not all the required documents.
His Honour found that in all the circumstances the excuse relied on by the companies was not reasonable because the legal advice they relied upon contemplated the possibility that they would be found guilty. That conclusion revealed no legal error. His Honour’s reference to the companies’ choice did not involve an error, he was stating what was obvious: that the companies exercised a choice. The existence of a choice can be relevant to the assessment of the reasonableness of an excuse.
On the whole of the evidence, particularly the fact that the VWA made it clear that it did not accept the propositions advanced by Mr Hammond and regarded the Notices as valid, I consider that it was open to the Magistrate to find that the companies’ reliance on legal advice did not constitute a reasonable excuse within the meaning of the Act. The legal advice on which the companies’ acted has been found by the Magistrate to have been incorrect, at least in part. I have found no error in the Magistrates’ interpretation of s 9. It would severely restrict the utility of the investigative powers given to the VWA by s 9, if incorrect legal advice could provide a reasonable excuse for non-compliance with a s 9 notice.
The majority of the High Court in Taikato[40] stated that the Court was to determine the content of a provision such as ‘reasonable excuse’ in a case where the issue arose. That is what the Magistrate did and his conclusion involved no error of law.
[40](1996) 186 CLR 454.
Conclusion
Grounds 1 to 3 of the Notice of Appeal were not pressed.
None of the grounds of appeal relied on by the appellants has been established. The appeal is dismissed.
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