Chevalley v Industrial Court of New South Wales - [2011] NSWCA 357

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Chevalley v Industrial Court of New South Wales [2011] NSWCA 357
Hearing dates: 30 August 2011
Decision date: 24 November 2011
Before: Bathurst CJ at [1]; Allsop P at [95]; Beazley JA at [96]; Basten JA at [97]; Sackville AJA at [123]
Decision:
(1) Each summons dismissed.
(2) Applicants to pay the costs of the first respondent in this Court.
(3) Applicants to pay the costs of the second respondent on a submitting basis.
(4) No order as to the costs of the Attorney General (third respondent).
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: ADMINISTRATIVE LAW - judicial review - constitutional validity of legislation - whether s 26 of the Occupational Health and Safety Act 2000 violates the principles underlying Ch III of the Constitution
CONSTITUTIONAL LAW - constitutional validity of legislation - whether s 26 of the Occupational Health and Safety Act 2000 violates the principles underlying Ch III of the Constitution
CRIMINAL LAW - director's liability for corporation's contravention - whether defences in Occupational Health and Safety Act 2000 s 26 and s 28 illusory
EVIDENCE - admissibility - whether certificate of conviction of corporation admissible and sufficient to prove essential fact of corporation's contravention of the Occupational Health and Safety Act 2000 - Evidence Act 1995 s 178
PROCEDURE - civil - documents - amendment - refusal to allow amendment - issue not raised by notice given under Judiciary Act 1903 (Cth) s 78B
STATUTORY INTERPRETATION - Occupational Health and Safety Act 2000 s 26 - whether charges bad in law for failing to particularise steps defendant should have taken to avoid contravention - whether charges bad in law for failing to particularise act or omission of defendant constituting contravention
Legislation Cited: Criminal Appeal Act 1912, s 5AE
Constitution (Cth), s 71, s 77(iii), s 78B
Evidence Act 1989
Evidence Act 1995, s 178(1)
Industrial Relations Act 1996, s 146C, s 196
Judiciary Act 1903 (Cth)
Occupational Health and Safety Act 2000, s 8, s 12, s 26, s 28, s 105
Cases Cited: APLA Limited v Legal Services Commission of New South Wales [2005] HCA 44; (2005) 224 CLR 322
Baker v R [2004] HCA 45; (2004) 223 CLR 513
Bass v Permanent Trustee Co [1999] HCA 9; (1999) 198 CLR 334
Chu Kheng Lim v Minister for Immigration [1992] HCA 64; (1992) 176 CLR 1
Commissioner of Taxation v Price [2006] QCA 108; (2006) 2 Qd R 316
Gyspy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4; (2008) 234 CLR 532
HA Bachrach Pty Ltd v Queensland [1998] HCA 54; (1998) 195 CLR 547Hogan v Hinch [2011] HCA 4; (2011) 85 ALJR 398
Hollington v F Hewthorn & Co Ltd [1943] KB 587
Hookam v The Queen [1994] HCA 52; (1994) 181 CLR 450
Inspector Aldred v Herbert [2007] NSWIRComm 170
Inspector Hayes v Santos and Lorenzo [2009] NSWIRComm 163
Inspector James v Ryan [2009] NSWIRComm 215
Inspector James v Sunny Ngai [2007] NSWIRComm 203
International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319
Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51
Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; (2010) 239 CLR 531
Kumar v Ritchie [2006] NSWIRComm 323
Liang v Inspector David Farmer [2010] NSWIRComm 156; (2010) 199 IR 116
Morrison v Powercoal Pty Limited [2004] NSWIRComm 297
Nicholas v The Queen [1998] HCA 9; (1998) 193 CLR 173
Powercoal Pty Limited v Industrial Relations Commission [2005] NSWCA 345; (2005) 64 NSWLR 406
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361
South Australia v Totani [2010] HCA 39; (2010) 242 CLR 1
T & M Industries (Aust) Pty Ltd v Sequeira [2006] NSWIRComm 25
The Prothonotary v Sukkar [2007] NSWCA 341
Williamson v Ah On (1926) 39 CLR 95
WorkCover Authority of New South Wales (Inspector Lane) v Australian Winch & Haulage Co Pty Ltd [2000] NSWIRComm 214
Texts Cited: J Heydon, Cross on Evidence (8th Australian Ed, LexisNexis)
Category: Principal judgment
Parties: Grahame Anthony Chevalley (first applicant)
Hilton Ross Grugeon (second applicant)
Inspector Rodney Morrison (first respondent)
Industrial Court of New South Wales (second respondent)
Attorney General of New South Wales (third respondent)
Representation: M Thangaraj SC with P Keyzer (first applicant)
A Moses SC with D Nagle and D Dinnen (second applicant)
R Burbidge QC with M Scott and I Taylor (first respondent)
S Lloyd QC with S Robertson (on behalf of the Attorney General)
McDonald Johnson Lawyers (first applicant)
Greg Murray Solicitor (second applicant)
Crown Solicitors Office (first, second and third respondents)

File Number(s): 2010/342090
Decision under appeal

Jurisdiction:

9105

Citation:

Morrison v Chevalley [2010] NSWIRComm 116

Date of Decision:

2010-08-24 00:00:00

Before:

Boland J President, Walton J Vice-President, Haylen J, Staff J

File Number(s):

IRC 956 and IRC 957 of 2007

Judgment

BATHURST CJ:

Background

The applicants, Grahame Anthony Chevalley ("Mr Chevalley") and Hilton Ross Grugeon ("Mr Grugeon") were directors of Hunter Quarries Pty Ltd ("the company"). The company owned and operated a quarry, Karuah Quarry, at which material for use in the construction industry was extracted. The company also owned the fixed plant equipment of the quarry including two off-road dump trucks. On 14 June 2005, one of the trucks went over an embankment at the quarry. As a result the driver of the truck, a Mr Darren Smith, was killed. Mr Smith was an employee of the company.

As a result of the incident the company was charged and pleaded guilty to an offence under s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"). Another director of the company, Mr Richard Badior, also pleaded guilty to charges under s 8(1) and s 26 of the Act.

On 5 June 2007, the first respondent made an application for an order that Mr Chevalley failed to ensure the health and safety at work of the company's employees, particularly Mr Smith, contrary to s 8(1) of the Act. The application stated that Mr Chevalley was taken to have contravened s 8(1) by virtue of s 26(1) of the Act.

On 7 June 2007, Staunton J made an order in proceedings IRC 956 of 2007 ordering Mr Chevalley to appear to answer the charges.

On 5 June 2007, a similar order was sought against Mr Grugeon and on 7 June 2007, Staunton J made a similar order in proceedings IRC 957 of 2007.

By notices of motion dated 12 February 2010 filed in the Industrial Court, each of Mr Chevalley and Mr Grugeon sought orders that the proceedings brought against them be dismissed or permanently stayed. As a consequence, a number of questions of law were referred by Backman J to the Full Bench of the Industrial Court under s 5AE of the Criminal Appeal Act 1912 and s 196 of the Industrial Relations Act 1996. By notice of motion dated 30 March 2010, Mr Chevalley sought to add an additional question on the constitutional validity of s 26 of the Act, which Backman J ordered be added to the previous list as Question 7. The questions finally referred to the Full Bench were as follows (footnotes omitted):

"1. Does the Court, in consequence of an application made during defended proceedings for offences charged pursuant to the Occupational Health & Safety Act 2000 (NSW), have jurisdiction to determine each of the following questions?

If the answer to the first question is yes:

2. Are the charges stated in the Applications for an Order in Matter Numbers 956 and 957 of 2007 so lacking in identification of the essential elements of the offence that they do not attract the jurisdiction of the Court?

3. Are the charges stated in the Applications in Matter Numbers 956 and 957 of 2007 invalid, null or void because:

(a) the Prosecutor has failed to plead or specify the essential ingredients or elements of an offence against ss 8(1) and 26 of the Occupational Health & Safety Act 2000 (NSW)? and/or:

(b) the Prosecutor has failed to specify the essential factual particulars of an offence against ss 8(1) and 26 of the Occupational Health & Safety Act 2000 (NSW)?

4. If the answer to question 3(a) and/or (b) is yes, did the Court make valid Orders requiring the attendance of each of the defendants in Matter Numbers 956 and 957 of 2007?

5. If the answer to questions 2 and/or 3(a) and/or (b) is yes and/or the answer to question 4 is no, does the Court have jurisdiction:

(a) to quash the Orders;

(b) to strike-out or dismiss the proceedings;

(c) in the circumstances of the present cases, to stay permanently the proceedings;

(d) to make a declaration that the defendants have no further obligation to attend the Court?

6. Does the Court have jurisdiction to hear and determine any application by the Prosecutor to amend the charges to amend any defect.

7. Is s 26 of the Occupational Health and Safety Act 2000 (NSW) invalid because it violates the principles that underlie Chapter III of the Commonwealth Constitution?"

The Full Bench answered Question 1 in the affirmative but answered Questions 2 and 3 in the negative. As a consequence Questions 4, 5 and 6 did not arise. The Full Bench answered Question 7 in the negative.

The Full Bench also rejected the submission made by Mr Chevalley that s 26 of the Act was constitutionally invalid.

By a summons filed on 15 October 2010, Mr Chevalley and Mr Grugeon sought orders removing the records of the Full Bench of the Industrial Court ("the Full Bench") in respect of proceedings IRC 956 of 2007 and IRC 957 of 2007 ("the proceedings") into this Court; an order in the nature of certiorari quashing the orders made by the Industrial Court in the proceedings on 7 June 2007 and 9 October 2008 (the latter being an amendment of the order against Mr Grugeon originally made on 7 June 2007), and an order in the nature of prohibition restraining the respondents from taking any further steps in the proceedings.

As they emerged, the grounds on which relief was sought may be summarised as follows:

(a) The application for orders that the applicants appear to answer charges were bad in law by reason of the failure to particularise the steps which the applicants should have taken by way of due diligence to prevent the contravention of s 8(1) of the Act by the company.

(b) Related to the first ground the charges were bad as they failed to particularise any act or omission of the applicants which constituted the offence.

(c) Section 26 of the Act was invalid because "it violated the principles that underlie Chapter III of the Constitution ".

The applicants also sought to amend their summons to claim that s 105 of the Act, which at the time conferred jurisdiction to hear the proceedings on the Industrial Relations Commission in Court Session ("the Industrial Court"), was invalid as the insertion of s 146C into the Industrial Relations Act had the effect of fundamentally impairing the independence of the members of the Industrial Relations Commission, including its judicial members in the Industrial Court, as a consequence of which the Commission could not be "a repository for the exercise of judicial determination of criminal culpability consistently with the national integrated system for which Ch III of the Constitution of the Commonwealth provides". Leave to amend the summons was refused for the reasons set out subsequently in this judgment.

The charges and further procedural history

The charges against each of Mr Chevalley and Mr Grugeon are in similar form. They alleged a contravention of s 8(1) of the Act arising by operation of s 26(1). The charges contained particulars of the contravention by the company. No complaint is made about those particulars. The charge against Mr Chevalley, however, only provided the following particulars relating to the offence alleged to have been committed by him:

"A. At all relevant times the Defendant was a Director of the corporation; and

B. At all relevant times the Defendant was concerned in the management of the corporation, as the Managing Director of the corporation."

The particulars of the charge against Mr Grugeon were identical except in his case it was alleged he was "concerned in the management of the corporation, inter alia as chairman of the Board of Directors of the corporation", rather than its Managing Director.

On 7 October 2008, the trial in respect of the charges against Mr Chevalley and Mr Grugeon, together with the trial of the charges against the company and Mr Badior, commenced. On the third day of the trial the company and Mr Badior pleaded guilty to the charges against them, although they did not admit all the facts alleged by the prosecutor as relevant to sentencing. It was agreed by the company, Mr Badior and the prosecutor that the trial judge, Backman J, would determine the matters in dispute whilst Mr Chevalley and Mr Grugeon agreed that they would be bound by the factual findings of her Honour. The proceedings against Mr Chevalley and Mr Grugeon were adjourned until 15 February 2010.

During the course of the hearing of the summons the court was supplied with a document setting out the facts agreed by the parties. A copy of this document is attached to this judgment. Further, in her judgment on the sentencing hearing, Backman J made a number of further factual findings (see [2009] NSWIRComm 179 at [222]).

Neither party placed any particular reliance on these factual findings. The respondents did not contend that these findings obviated the need to supply the particulars sought by Mr Chevalley and Mr Grugeon if they were otherwise entitled to them. Similarly, Mr Chevalley and Mr Grugeon did not accept that the agreed facts or Backman J's further factual findings affected one way or the other their entitlement to the particulars sought.

The legislation

It is convenient to set out the relevant provisions of the Act (as they were at the relevant time):

" 8 Duties of employers

(1) Employees

An employer must ensure the health, safety and welfare at work of all the employees of the employer.

That duty extends (without limitation) to the following:

(a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health,

(b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used,

(c) ensuring that systems of work and the working environment of the employees are safe and without risks to health,

(d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work,

(e) providing adequate facilities for the welfare of the employees at work.

...

12 Penalty for offence against this Division

A person who contravenes, whether by act or omission, a provision of this Division is guilty of an offence against that provision and is liable to the following maximum penalty:

(a) in the case of a corporation (being a previous offender) - 7,500 penalty units, or

(b) in the case of a corporation (not being a previous offender) - 5,000 penalty units, or

(c) in the case of an individual (being a previous offender) - 750 penalty units or imprisonment for 2 years, or both, or

(d) in the case of an individual (not being a previous offender) - 500 penalty units.

...

26 Offences by corporations - liability of directors and managers

(1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that:

(a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or

(b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation.

(2) A person may be proceeded against and convicted under a provision pursuant to subsection (1) whether or not the corporation has been proceeded against or been convicted under that provision.

(3) Nothing in subsection (1) prejudices or affects any liability imposed by a provision of this Act or the regulations on any corporation by which an offence against the provision is actually committed.

(4) In the case of a corporation that is a local council, a member of the council (in his or her capacity as such a member) is not to be regarded as a director or person concerned in the management of the council for the purposes of this section.

...

28 Defence

It is a defence to any proceedings against a person for an offence against a provision of this Act or the regulations if the person proves that:

(a) it was not reasonably practicable for the person to comply with the provision, or

(b) the commission of the offence was due to causes over which the person had no control and against the happening of which it was impracticable for the person to make provision."

The construction of the legislation

As has been said by the High Court on a number of occasions, the first step in assessing the constitutional validity of a given law is one of construction of the relevant legislation: Gyspy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4; (2008) 234 CLR 532 at [11]; Hogan v Hinch [2011] HCA 4; (2011) 85 ALJR 398 at [5]. Further, in the present case each of the alternative submissions made by the applicants depends to a large extent on the construction given to s 26 of the Act and its associated sections.

The applicants ' submission on the construction issues

In his written submissions, Mr Chevalley addressed the construction issue only to a limited extent. He submitted that s 26 deprived the directors of a "real and reasonable chance to place the real facts before the Court for determination of the issue" of the director's guilt (citing Williamson v Ah On (1926) 39 CLR 95 at 117). He submitted that the defences provided for under s 28 were not available to the directors. In support of his argument that s 26 was invalid he submitted that once the question of whether a person was validly appointed a director or was concerned in management was answered, the legislature did the rest of the work leaving to the courts only the power to determine the penalty. He submitted that the case law demonstrated that s 26(1)(a) and s 26(1)(b) have no real work to do.

On the hearing of the appeal, counsel for Mr Chevalley contended for a somewhat different interpretation submitting that a due diligence defence in s 26 involved a consideration of what was reasonable in the circumstances. He accepted that if his construction was correct, much of his argument relating to the constitutional validity of the section fell away, but submitted that the expression "all due diligence" had been interpreted by the Industrial Court to mean "in effect to do everything to ensure", thereby rendering the defence illusory. He submitted that the conviction rate in prosecutions brought in reliance on s 26 was 97 percent, a submission which I did not consider particularly helpful.

Counsel for Mr Grugeon adopted a different approach. His primary submission was that s 12 of the Act created the relevant offence. That section, he submitted, required an act or omission by the contravening person. In the present case the charge did not specify any act or omission on the part of Mr Grugeon. It followed that the charge was bad in law as without the omission being properly identified, the defences in s 26 could not properly be relied upon and they would be rendered nugatory. He submitted that to the extent the requirement of an act or omission in s 12 conflicted with s 26, any conflict should be resolved in favour of the accused and that s 26 should not be read as meaning that the corporation's breach is ipso facto also the director's breach or that a director is taken to be guilty without any specific act or omission on his or her part. He submitted that culpability or a crime absent any act or omission on the part of the person is not a crime known to law.

Each of the applicants submitted that the better view was that a defence under s 28 was not available to a director who was sought to be made liable by virtue of s 26 of the Act. However, counsel for Mr Grugeon acknowledged that to the extent the company's contravention was an issue in the proceedings against the director, reliance could be placed on s 28 in resisting the allegations of contravention by the employer company. Further, counsel for Mr Grugeon said that even in circumstances where the employer corporation previously pleaded guilty to the relevant offences, the prosecution still had to prove contravention by that corporation beyond reasonable doubt. Counsel for Mr Chevalley by contrast submitted that contravention by the employer corporation could be proven in those circumstances by the tender of a certificate of conviction under s 178(1) of the Evidence Act 1995.

The respondents ' submissions

The first respondent, in his written submissions, described s 26 as an example of an offence where a person is deemed to be liable as a principal for a contravention because of that individual's role and status in the management of the body corporate, unless he or she establishes one of the facts identified in s 26(1)(a) or s 26(1)(b) of the Act.

The first respondent in common with the applicants also submitted that where no prosecution of the corporation has taken place, the defendant director may invoke the s 28 defence to demonstrate that the corporation has not contravened the Act. In his written submissions he acknowledged that this proposition may be inconsistent with a judgment of the Full Bench of the Industrial Court in Morrison v Powercoal Pty Limited [2004] NSWIRComm 297 at [159]. However, in circumstances where the corporation has previously pleaded guilty to the offence he seemed to submit that the contravention could be established by the tender of a certificate of conviction.

The first respondent also submitted that an act or omission for the purpose of s 12 was the act or omission of the employer.

So far as s 28 of the Act was otherwise concerned, the first respondent submitted that it had no application to a charge against a director (other than as described in par [24] above), as the director did not answer the description of a person charged for an offence under a provision of the Act. In that regard he relied on Morrison v Powercoal Pty Limited supra at [163].

The third respondent made no submissions on the construction issue.

Consideration

The first most critical issue of construction is the scope of the defences provided for by s 26. In my opinion, the defences in s 26 are not illusory either as a matter of construction nor as interpreted by the Industrial Court.

Section 26(1)(a) raises the issue of whether as a matter of fact the director or person concerned in management who has been charged was in a position to influence the conduct of the corporation in relation to the contravention. The answer to that question will depend both on the particular contravention and the particular position held by the defendant. The subsection assumes that in some cases both directors and particular persons concerned with management will not be in a position to influence the corporation in relation to the contravention. Each case will depend on its own facts, but it is self-evident that in relation to some contraventions the ability to influence the corporation will depend on the particular position held, for example, a works manager or a chief executive officer compared to a chief financial officer or a non-executive director.

Second, s 26(1)(b) requires in my opinion, that the charged director or person concerned in management demonstrates that he or she has carried out the due diligence appropriate to a person in his or her position to prevent the contravention. Thus, where the contravention arose as a result of systemic failure some officers may well be liable for the failure to undertake due diligence to ensure that a proper system was in place to prevent such a failure. By contrast, such a person may not be liable in the case of an isolated instance caused by a failure to follow an appropriate workplace system. If the charged person had taken all reasonable steps appropriate to his or her position to ensure the system was in place and would not be breached, he or she would not be liable. The question will, of course, depend on the facts established in each particular case.

Further, contrary to the assertion of counsel for Mr Chevalley, the Industrial Court has not construed s 26 in such a way as to render the defence illusory.

In Kumar v Ritchie [2006] NSWIRComm 323 and Inspector Aldred v Herbert [2007] NSWIRComm 170, the Industrial Court adopted an interpretation of s 26 which provided some support for the contention of Mr Chevalley that the defence was illusory. In those cases the Industrial Court held that in considering the position of directors for the purpose of s 26(1)(a) the Court was entitled to assume that their influence extended to all detailed matters concerning the operation of the business in question. However, this approach was rejected in subsequent cases.

In Inspector James v Sunny Ngai [2007] NSWIRComm 203, Mr Ngai was successful in establishing a defence under s 26(1)(a). Contrary to the submissions of counsel for Mr Chevalley, this success did not depend solely on the "technicality" that a person other than Mr Ngai was the governing director. Rather, the Industrial Court found that having regard to the particular powers and responsibilities assigned to Mr Ngai and a fellow director who was also charged, a Ms Ly, they were not in a position to influence the conduct of the corporation in relation to the contravention. During the course of his judgment Staff J made the following comments:

"[127] In my view, the defence available in s 26 is designed to avoid a situation of persons being punished simply by reason of holding the office of director. In order for a director to be liable, it is necessary to establish that the director was complicit in the contravention. The evidence establishes that in respect of the practical position, the defendants, because of the limited powers, duties, responsibilities and defined roles provided to them by the Governing Director, were not in a position to influence the Corporation's contravention and were not complicit in the Corporation's contravention. Similarly, from a theoretical perspective, in light of the Articles of Association, these defendants were not in a position to influence the contravention by the Corporation.

[128] The section provides for punishment for an offence to which the person is deemed to be a party because the person is not able to establish the matters of exculpation in s 26(1)(a) or s 26(1)(b). Whether a person was not able to influence (to the requisite degree), the relevant conduct of the corporation will depend on a range of matters, both legal and factual."

His Honour rejected the approach of Backman J in Inspector Aldred v Herbert supra, saying:

"[131] In my view, to the extent that her Honour (at [54]) approached the availability of the defence simply by reference to the facts that directors are at the top of the corporation hierarchy to make decisions on matters of operations policy and management, and without examining whether the directors were in a position to influence the relevant conduct of the corporation, her Honour adopted too narrow a view of the availability of the defence under s 26(1)(a)."

In relation to the application of the defence to the facts before him, Staff J concluded:

"[137] The evidence is that the defendants were fully aware of the limitations imposed upon them by Mr Henry Ngai and I find no basis for concluding that the defendants were in any position to do anything even if they had made enquiries in respect of the guarding of machines. Ms Ly, in particular, had no knowledge about safety or training and did not have any experience at all in relation to safety issues. Furthermore, Ms Ly was overseas for a substantial period of time prior to the incident, which clearly limited, in any event, her ability to influence the operations of the Corporation in respect of occupational health and safety, or any matters outside her area of responsibility. In my view, the issue is not one of ignorance, nor wilful blindness, as submitted by Mr Docking, but rather that the defendants had neither the powers nor the authority to deal with safety matters. The defendants have established, on the balance of probabilities, that their powers and duties were excluded by the Articles of Association and by the direction and conduct of Mr Henry Ngai. At all relevant times, Mr Henry Ngai was acting within the scope of the powers bestowed upon him as Governing Director and by complying with his authority and directions, the defendants conducted themselves within the constraints imposed upon them by the Articles."

A similar approach was adopted by Marks J in Inspector James v Ryan [2009] NSWIRComm 215. In that case the defendant was successful as the prosecutor failed to establish that he was a director. However, Marks J went on to consider the application of s 26(1)(a) on the assumption that his primary conclusion was incorrect (see [2009] NSWIRComm 215 at [155]).

Marks J described the operation of s 26 in the following terms:

"[157] It is clear from its provisions that the purpose of s 26(1) is to extend criminal culpability to persons who were relevantly involved in the contravention by a corporation of the Act. The nature and extent of that involvement in the context of the purpose of the section can only be gauged by considering the prima facie application of the section in the context of the exculpatory matters described in (a) and (b). That is, given the manner in which s 26(1) is framed, it cannot, in my opinion, be concluded that anyone who is a director or anyone who is concerned in the management of the corporation will ipso facto be taken to have contravened the same provision of the Act. To conclude otherwise would render the defences contained within s 26(1)(a) and (b) of no effect.

[158] The point can be made by describing the circumstances in which s 26(1) applies in another way. I shall commence by confining this description to the circumstances of a director. The alternative way of describing the offence is that if a corporation has contravened any provision of the Act, a director of the corporation who was in a position to influence the conduct of the corporation in relation to the contravention and who did not use all due diligence to prevent that contravention is taken to have contravened the same provision. The onus of establishing that the director was not in such a position or used all due diligence falls on the director. The provisions of the section can be so described and extrapolated to apply to someone concerned in the management of the corporation.

[159] The recasting of the provision in this way, which, hopefully, retains faithfully the manner in which s 26(1) applies, demonstrates that the intent and purpose of the provision is focussed on the position of the director in terms of influence over the conduct of the corporation in relation to the contravention and the use of all due diligence to prevent that contravention by the director. This in turn focuses attention on the individual circumstances of the director. I should add for completeness that the recasting of the section in this way assumes an exact co-relationship between a director who was and a director who was not in a position to influence the corporation. The assumption is that there cannot be any logical state of affairs that would fall outside the area covered by the negation of the proposition of being in a position to influence and being in such a position.

[160] In analysing and considering the provisions of s 26(1), I also take into account the following matters:

1. A director is taken to have committed the same offence as that committed by the corporation by reason of his or her office as a director. That is, it is the defendant's position as a director per se that attracts the prima facie declaration of guilt. It follows that in examining any particular set of circumstances involving an allegation of breach brought against a person in his or her capacity as a director, that the focus of attention should be on the defendant's position as a director and not any other position which might be occupied by the defendant that would fall outside his or her duties, responsibilities and obligations as a director.

2. In considering the provisions of the defence under s 26(1)(a), the Court is required to consider, firstly, the position of the defendant, secondly, whether that position enabled the defendant to influence the conduct of the corporation and thirdly, the contravention of the Act itself because the conduct of the corporation must be one that is 'in relation to' the contravention.

3. The applicability of the defence must assume that the defendant would be in such a position despite being a director. That is, there is an express assumption contained within the provision that the defence can be raised outside of, and is not constrained by reason of, the duties, obligations and responsibilities that attach by reason of the fact that the defendant holds the office of a director.

4. The manner in which sub-sections (a) and (b) are framed must reflect an acknowledgement that not all directors will be in a position to influence all of the conduct of the corporation solely because they hold the office of director.

5. Therefore, it is necessary in applying the provisions of s 26(1) to examine what it is that may be considered beyond the mere position per se of a director, that is the fact that the defendant holds the office of director.

6. Some clue in this regard is provided by the provisions of s 26(1)(a) and (b) when read as a whole. The meaning of whether someone is 'in a position' of the kind referred in the provision is given by the Oxford English Dictionary Online Edition in the following terms:

8.a fig 'a relation in which a person stands with respect to another or others; a person's circumstances, condition or situation, esp as affecting his or her influence, role, or power to act; spec (freq in social position) status, rank, standing.'

The adoption of this meaning dictates that it is necessary to consider the individual circumstances or situation of the defendant as a director in determining whether or not the defendant was in a relevant position to influence the corporation.

7. Both defences, that is those contained within sub-sections (a) and (b), are directed to the particular contravention. This must involve a consideration of the circumstances by which the state of affairs which constitute the breach occurred. The necessity to consider the circumstances of the particular breach militates against accepting any prima facie culpability by reason only of the fact that a defendant holds the office of director in the corporation."

His Honour then expressly rejected the interpretation of s 26(1)(a) by the trial judge in Inspector Kumar v Ritchie supra and in Inspector Aldred v Herbert supra. (See [2009] NSWIRComm 215 at [179], [191].)

His ultimate conclusion was as follows:

"[214] Significantly, I conclude, on the evidence, that the defendant, as a matter of fact, had no active role to play in the occupational health and safety activities within the Dekorform business and had, as a matter of fact, no responsibilities in connection with the implementation of the occupational health and safety strategies and programs of that business. Nor did anything happen that could reasonably have alerted the defendant to any state of affairs that called for any reaction or action on his part.

...

[216] It follows that, as a matter of fact and law, I find that the defendant was not in a position to influence the conduct of Dekorform in relation to the particular contravention of the Act, which I have found occurred on 3 July 2006. This conduct covered the state of the equipment, and the failure to maintain it, the failure to ensure that it was not operated in an unsafe manner and to ensure that there were in place relevant systems and the provision of information, instruction, training and supervision and the carrying out of a risk assessment. These were matters that were outside the responsibilities, duties and obligations of the defendant as a matter of fact, assuming that he were relevantly a director of Dekorform on that date for the purpose of s 26(1) of the Act. Indeed, if the defendant did have any such duties, obligations or responsibilities as a matter of fact they would have accrued to him in his capacity as an executive of Alesco. For reasons which I have already advanced, I do not conclude that, as a matter of law, the defendant had such duties, responsibilities and obligations as would preclude him from relying on the defence available to him under s 26(1)(a)."

Although the decision of Marks J was overturned on appeal, see Inspector James v Ryan (No 3) [2010] NSWIRComm 127, the Full Bench made no criticism of the approach taken by Marks J to the s 26 defence.

The approach of Staff J in Inspector James v Ngai supra and Marks J in Inspector James v Ryan supra, was endorsed by the Full Bench of the Industrial Court in Liang v Inspector David Farmer [2010] NSWIRComm 156; (2010) 199 IR 116 at [36], [37].

Further, so far as s 26(1)(b) is concerned the Industrial Court has not approached the question of all due diligence on the basis submitted by Mr Chevalley namely that "by definition a director will not have shown all due diligence if a corporate contravention has taken place". An example is Inspector Hayes v Santos and Lorenzo [2009] NSWIRComm 163. In that case Boland J conducted a detailed analysis of the due diligence said to be undertaken by the defendant directors and found that:

"[179] For all their commendable commitment to safety, their comprehensive policies and their reiteration of the prohibition on the use of hooks to lift steel plates, a flaw in the defendants' approach was to rely on supervisors who were not qualified to perform dogging work or to give instructions in relation to the carrying out of such work. It was very clearly the case that reliance was placed on Mr Alvarez to supervise and give instructions to Mr Hair but the defendants failed to ensure that Mr Alvarez was qualified to do so."

In that case the defendants had a system of recording qualifications, and recorded that Mr Alvarez was so qualified, when in fact he was not, indicating that the defendants had accepted his assertions of qualification without ever sighting evidence of them. This obligation was found to rest with the directors by Boland J, not by virtue of the simple fact that they were directors but because the company's organisational chart and the evidence of the directors revealed that one of them was specifically responsible for workshop personnel and site work, the other for providing "a system with relevant procedures and instructions in the areas of occupational health and safety" (at [31]). The s 26(1)(b) defence failed not because the onus was impossible to discharge, but because in the circumstances of the defendant directors' specific positions and responsibilities they had not used all due diligence to prevent the contravention by the corporation.

I have dealt with these cases in some detail because they demonstrate an approach consistent with that which I have indicated as the correct approach in pars [29] and [30] above. The defences in these circumstances are not illusory.

Turning to the issues raised by s 12 of the Act, the relevant question is what is the act or omission which imposed liability to penalties on the directors under s 12. As I indicated earlier (at [21]) counsel for Mr Grugeon contended that the relevant act or omission had to be that of the director; an absence of particulars of which meant the charge was bad in law.

In my opinion, this submission is incorrect. Section 26(1) provides that when a corporation by act or omission contravenes any provision of the Act, the director or person concerned in management is taken to have contravened the same provision unless one of the defences in s 26(1)(a) or s 26(1)(b) is made out. The effect of the section is that the director is taken to have contravened the same provision. Although the legislation does not say that the director or person concerned in management is taken to have committed the same act or omission as the corporation, the expression, "taken to have contravened the same provision" means, in the context of which it appears, liability for the same act or omission which constituted the contravention. It follows that in proceedings against the director or persons concerned in management in reliance on s 26, the relevant act or omission is the act or omission for which the corporation is liable.

Such a construction, in my opinion, gives effect to what was intended by the legislature in enacting s 26 of the Act and enables the provision which is said to have been contravened (in this case s 8) and the penalty provision s 12 to operate harmoniously with s 26: See Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69]-[70].

It follows that there was no requirement imposed solely by s 12 to particularise acts or omissions of the directors in the charges.

Section 28 of the Act raises a number of issues of construction. The first is whether where, as envisaged in s 26(2), a director is prosecuted in circumstances where there has been no conviction against the corporation, the person charged can rely on s 28 of the Act in resisting the allegation that the corporation contravened the Act. Each of the parties agreed that the person charged in these circumstances could invoke s 28 in resisting the allegation that the corporation contravened the Act. However, the first respondent suggested that this was inconsistent with what was said by the Full Bench of the Industrial Court in Morrison v Powercoal supra at [163]-[165].

I do not believe that the Full Bench in those paragraphs was dealing with the question of the availability of s 28 as a defence to the allegation that the corporation contravened the Act in circumstances where no conviction had been recorded against the corporation. Rather, it was directing its attention to the situation where the corporation had in fact been convicted. That interpretation of the judgment is consistent with the view taken of it in Powercoal Pty Limited v Industrial Relations Commission [2005] NSWCA 345; (2005) 64 NSWLR 406 at [121]-[124]. In these circumstances, in my opinion, where the corporation has not been convicted, it is open to the director charged to raise the defences under s 28 to resist the proposition that the corporation had in fact contravened the Act. There is not the slightest reason to put the director in a worse position than the corporation would have been had it been charged with the offence.

A more difficult question is the extent to which a director can dispute the fact that the company contravened the provision either generally or in reliance on s 28 when the company had previously been convicted of the contravention. Put another way, is it sufficient for the prosecution to prove the contravention by the corporation by simply tendering a certificate of conviction under s 178 of the Evidence Act ?

As I have stated above, the Full Bench of the Industrial Court in Morrison v Powercoal Pty Limited supra, stated that in proceedings against the director which occurred after the corporation had pleaded guilty, the director was not entitled to contest the contravention by the company stating that it would be incongruous to permit the re-examination of the s 53 defences (the predecessor provisions to s 28) where its unavailability had already been found in relation to the corporation. In Powercoal Pty Ltd v Industrial Relations Commission supra, this Court left open the question of whether this conclusion was correct (see [2005] NSWCCA 345 at [120]-[123]).

Although the issue had not been previously considered by the Industrial Court, there were two previous decisions of the Full Bench relevant to the issue which were not cited to that Court in Morrison v Powercoal Pty Limited supra. In WorkCover Authority of New South Wales (Inspector Lane) v Australian Winch & Haulage Co Pty Ltd [2000] NSWIRComm 214, the Full Bench held that in a proceeding under s 50 of the Act (the predecessor to s 26) the fact of a contravention could not be proved merely by the tender of a certificate of conviction under s 178. It stated its conclusion as follows:

"[59] However, in our view the essential element of an offence under s 50 is the contravention of the Act by the corporation not the conviction of the corporation: s 50(1). An offence under s 50 does not require that a corporation has been proceeded against or convicted: s 50(2). As such, the conviction of the corporate defendant is not a fact in issue in proceedings under s 50 and therefore the certificate of conviction could not be tendered under s 178 of the Evidence Act ; s 91(1) operates to preclude it."

The reasoning in that case was approved by a subsequent decision of the Full Bench in T & M Industries (Aust) Pty Ltd v Sequeira [2006] NSWIRComm 25. The issue in that case was whether the director on an appeal from an adverse decision of the primary judge could raise the issue of whether the corporation contravened the Act in circumstances where the corporation had not appealed from its conviction. The Full Bench said that it was open to the director to raise this issue. In the course of its judgment it made the following comments:

"[27] One of the essential elements of an offence under s 26(1) is the contravention by a corporation of any provision of the Act or regulations - in this case, the contravention by the Company of s 92. For the purpose of s 26(1), this is simply a matter to be proved beyond reasonable doubt: sub-section (2) makes it clear that there may be a conviction under s 26(1), whether or not the corporation has been proceeded against or convicted. Sub-section (3) also emphasises the extent to which s 26(1) operates independently of any relevant criminal proceedings involving the corporation.

[28] Although the syntax of sub-section (3) is somewhat awkward, it does suggest the following scenarios: it appears that a director may be found guilty of an offence under s 26(1), and yet, in separate criminal proceedings, the corporation may be acquitted of the underlying offence. On the other hand, it is conceivable that, notwithstanding a conviction against a corporation, the director may be acquitted in separate proceedings on the basis that one of the essential elements - the contravention by the corporation - has not been proven beyond reasonable doubt. Although such cases would be highly unusual (and extremely unlikely to occur in practice), it seems to us that sub-section (3) admits these possibilities. This reinforces our preliminary view that in appellate proceedings against a conviction under s 26(1), the contravention by the corporation is open to challenge on the ordinary principles governing appeals - as is any essential element - regardless of the status of the corporation or any proceedings against it.

[29] Contrary to the respondent's submissions, WorkCover Authority of New South Wales (Inspector Lane) v Australian Winch & Haulage Co Pty Ltd (2000) 102 IR 40 does not stand in the way of this preliminary view. If anything, it supports it. In determining whether a certificate of conviction was admissible pursuant to s 178 of the Evidence Act 1995, the Full Bench held that the fact of a conviction of a corporation is not a fact in issue in separate proceedings against a director or manager of the corporation under s 50 of the 1983 Act (which is equivalent to s 26 of the 2000 Act for the purpose of this discussion). Rather, the essential element of the offence was the contravention of the Act by the corporation not the conviction of the corporation."

It seems to me in these circumstances that even where the corporation has been convicted, the prosecutor in a separate case against the director is required to prove beyond reasonable doubt the contravention alleged for which the defendant is said to be liable by virtue of s 26. It follows, in my opinion, that the directors would be entitled to challenge the detailed facts, challenge the contravention and in so doing rely on s 28 as a basis for rebutting the allegation that the corporation contravened the Act.

A certificate of conviction takes its evidentiary force from s 178 of the Evidence Act . Under the common law and the Evidence Act 1989 a conviction did not even provide prima facie evidence of the facts on which it was based: Hollington v F Hewthorn & Co Ltd [1943] KB 587; and see J Heydon, Cross on Evidence (8 th Australian Ed, LexisNexis) at 265ff. Sections 91 and 92 of the Evidence Act now change that position in particular respects in probate matters and civil proceedings.

Section 178 of the Evidence Act is in the following terms:

" 178 Convictions, acquittals and other judicial proceedings

(1) This section applies to the following facts:

(a) the conviction or acquittal before or by an applicable court of a person charged with an offence,

(b) the sentencing of a person to any punishment or pecuniary penalty by an applicable court,

(c) an order by an applicable court,

(d) the pendency or existence at any time before an applicable court of a civil or criminal proceeding.

(2) Evidence of a fact to which this section applies may be given by a certificate signed by a judge, a magistrate or registrar or other proper officer of the applicable court:

(a) showing the fact, or purporting to contain particulars, of the record, indictment, conviction, acquittal, sentence, order or proceeding in question, and

(b) stating the time and place of the conviction, acquittal, sentence, order or proceeding, and

(c) stating the title of the applicable court.

(3) A certificate given under this section showing a conviction, acquittal, sentence or order is also evidence of the particular offence or matter in respect of which the conviction, acquittal, sentence or order was had, passed or made, if stated in the certificate.

(4) A certificate given under this section showing the pendency or existence of a proceeding is also evidence of the particular nature and occasion, or ground and cause, of the proceeding, if stated in the certificate.

(5) A certificate given under this section purporting to contain particulars of a record, indictment, conviction, acquittal, sentence, order or proceeding is also evidence of the matters stated in the certificate.

(6) In this section:

acquittal includes the dismissal of the charge in question by an applicable court.

applicable court means an Australian court or a foreign court.

Note. Section 91 excludes evidence of certain judgments and convictions."

Given the terms of s 178(1)(a) as one of the facts to which the section applies, s 178(2) and (3) provide for proof of a conviction of a particular offence identified in the relevant certificate. I would not read s 178(3) as providing for evidence that the offence was committed. Thus, in this case, the certificate would not be evidence of the contravention, but rather of the conviction of the offence in question (which fact is not relevant). Whether or not s 178 has a wider meaning was not the subject of argument. It need not be decided, because whatever its width, it does not provide for proof of the facts relevant to the commission of the offence in the face of the Evidence Act s 91(1); and s 26 of the Occupational Health and Safety Act should be construed so as to require the proof of the facts underlying the contravention such that the offence is proved beyond reasonable doubt.

Were it otherwise, the constitutional question posed by s 26 may have more significance.

Further, with respect to the Full Bench there seems to me to be nothing incongruous in the prosecution being required to prove in the case against the director one of the essential elements of the offence. To the extent that incongruity provides any yardstick in this context, it would be equally if not more incongruous that the prosecution was dispensed from proving one of the essential elements of the offence.

The remaining construction issue is whether a director who is unable to make out one of the defences in s 26(1)(a) or (b) can rely on s 28 in his or her own defence. In my opinion, s 28 does not extend to provide the director or person concerned with management with such a defence. This is for two reasons. First, the use of the expression "unless the director or person satisfies the court" in s 26 tends to suggest that once a contravention by the corporation is found, the only defences are those contained in s 26(1)(a) or (b). Secondly, and more importantly, the defence in s 28 does not seem to relate to a claim against a director. The defence in s 28(a), namely that it was not reasonably practicable for the person to comply with the provision, does not seem apposite to a claim against a director where the touchstone for liability is a claim against the corporation. As I indicated, the director can, however, rely on s 28 in resisting the allegation of contravention by the corporation.

The defence in s 28(b) so far as it relates to a director adds nothing to the defence in s 26. If a director was not in a position to influence the corporation in relation to the contravention or had performed all due diligence then it would follow that the contravention was due to causes over which he or she had no control and against the happening of which it was impractical for the person to make provision. Conversely, if the defendant was in a position to influence the corporation in relation to the contravention and had not performed all due diligence then the defence under s 28(b) could not be made out.

For these reasons s 28 is not available to a director or persons concerned in management in addition to the s 26 defences.

I have dealt with these issues in some detail because they are critical to the question of the constitutional validity of s 26 and relevant to the attack on the charges for want of particularity.

The constitutional validity of s 26

It was primarily Mr Chevalley who challenged the validity of s 26, although the challenge was supported by Mr Grugeon. The reference to the applicants' submissions should be understood in that context.

The applicants ' submissions

The applicants contended that s 26 was repugnant in a fundamental degree to the judicial process. They contended that this was so not because it reversed the onus of proof but because of what was described as the cumulative and restrictive effect on the judicial function in that it unacceptably limited the capacity of the defendant to rebut the criminal charges by countervailing and better evidence. The applicants contended that the substantive effect of s 26 was that the director had no real or reasonable chance to place the real facts before the Court.

The applicants further submitted that Chapter III of the Constitution forbids attempts by state parliaments to impose on courts functions which would interfere with the traditional judicial process and that s 26 infringed that principle by removing the capacity of the courts to consider whether the directors had the actus rea and mens rea associated with the offence. The applicants submitted that the legislation as interpreted meant that directors will be deemed guilty because s 26(1)(a) and (b) leave the courts with no work to do. The first applicant in that context relied heavily on the submission that the defences were illusory, a submission which I have demonstrated is incorrect.

The respondents ' submissions

The first respondent emphasised that the reversal of the onus of proof in a provision providing for a criminal offence did not of itself render the provision invalid. It submitted that the legislation was no different in effect to that held valid by the High Court in Hookham v The Queen [1994] HCA 52; (1994) 181 CLR 450. He submitted that s 26 does not directly presume guilt and pointed to the fact that a number of factual and legal issues were left open for determination by the court in considering a charge based on s 26. As a consequence he submitted that the requirements of s 26 do not remove the court's capacity to engage in a curial determination of the acts on which liability depends.

The submissions of the third respondent were broadly similar, emphasising the fact that the reversal of the onus of proof did not invalidate the provision and rejecting the proposition that the defences under s 26 were illusory.

Consideration

In Baker v R [2004] HCA 45; (2004) 223 CLR 513, the plurality (at [22]) cited with approval the following passage from the joint judgment of five members of the High Court in HA Bachrach Pty Ltd v Queensland [1998] HCA 54; (1998) 195 CLR 547 to the following effect:

"It will be apparent that the Queensland Supreme Court (including the Court of Appeal) is not a federal court created by the Parliament within the meaning of s 71 of the Constitution, and that the litigation pending in the Court of Appeal did not involve the exercise by it of federal jurisdiction invested pursuant to a law made by the Parliament under s 77(iii) of the Constitution. Hence the reliance by the plaintiff upon the decision with respect to the Supreme Court of New South Wales in Kable v Director of Public Prosecutions (NSW) .

However, Kable took as a starting point the principles applicable to courts created by the Parliament under s 71 and to the exercise by them of the judicial power of the Commonwealth under Ch III. If the law in question here had been a law of the Commonwealth and it would not have offended those principles, then an occasion for the application of Kable does not arise. The submissions for the first and third defendants and for the interveners correctly proceeded on that footing."

Consistent with that approach it is convenient to consider whether the law would have been valid had it been a law of the Commonwealth conferring jurisdiction on a court created by Parliament under s 71 of the Constitution.

In Nicholas v The Queen [1998] HCA 9; (1998) 193 CLR 173, Gummow J stated (at [146]) that the legislative powers of the Commonwealth do not extend to the making of a law which authorises or requires a court to exercise judicial power in a manner which is inconsistent with its nature. (See also APLA Limited v Legal Services Commission of New South Wales [2005] HCA 44; (2005) 224 CLR 322 at [247]; Chu Kheng Lim v Minister for Immigration [1992] HCA 64; (1992) 176 CLR 1 at 21.)

In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361, Kitto J described the nature of the judicial power in the following terms at 374-375:

"Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist. It is right, I think, to conclude from the cases on the subject that a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified."

More recently in Bass v Permanent Trustee Co [1999] HCA 9; (1999) 198 CLR 334, the majority (at [56]) described judicial power as the application of relevant law to facts as found in proceedings conducted in accordance with the judicial process and that this requires that the parties be given an opportunity to present their evidence and to challenge the evidence led against them. (See also Gypsy Jokers Motorcycle Club Inc v Commissioner of Police supra at [175]; International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319 at [88].)

As I indicated above the applicants submitted that s 26 had the effect of conferring on a court a function repugnant to or incompatible with the institutional integrity of the court, in that it required the court in proceedings against the director or person concerned in management to presume guilt and limit its function to the imposition of a penalty. If in fact the legislation had that effect it would be invalid as requiring the court to exercise judicial power in a manner inconsistent with its nature: See Chu Kheng Lim supra at 27; Nicholas v The Queen supra at [16], [19], [74]; International Finance Trust Co Limited v New South Wales Crime Commission supra at [4], [97]-[98]; South Australia v Totani [2010] HCA 39; (2010) 242 CLR 1 at [4], [69], [426]-[428]; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police supra at [39]; Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51 at 107.

In considering this issue, as the applicants correctly conceded it is clear that the fact that Parliament in enacting s 26 imposed the burden of proving the defences in s 26(1)(a) and (b) of the Act on the defendant does not render the section invalid: Nicholas v The Queen supra at [23]-[24], [153]-[156]; Hookham v The Queen supra at 458-459; Commissioner of Taxation v Price [2006] QCA 108; (2006) 2 Qd R 316 at [42]-[43].

I have dealt with the construction of s 26 and its related sections above. It follows from what I have said that the following matters are left for determination by the court should the defendant choose to put them in issue.

(a) Whether the corporation contravened a relevant provision of the Act.

(b) Whether a defence under s 28 was available to the corporation.

(d) Whether the defendant was in a position to influence the conduct of the corporation in relation to the contravention.

(e) Whether the defendant used all due diligence to prevent the contravention by the corporation.

In these circumstances it is incorrect to say that the effect of the legislation is to require the court to presume the guilt of the defendant and to deprive it of the power to adjudicate on such guilt. As Spigelman CJ pointed out in Powercoal Pty Limited v Industrial Commission of New South Wales supra at [109]-[111], the provisions are similar to those considered in Hookham v The Queen supra; they are designed to achieve the object of the Act by punishing persons complicit in the contravention. Having regard to the fact that the jurisdiction conferred on the court includes the determination of the question of whether there was a contravention and of matters relevant to complicity, the legislation does not require a court to exercise judicial power in a manner inconsistent with its nature.

It follows that s 26 of the Act is not invalid.

The challenge to the charges based on absence of particularity

As I indicated earlier (at [10]) the applicants allege that the charges against them were bad because they failed to particularise the steps they should have taken by way of due diligence to prevent the contravention by the company. Each of the applicants relied on the decision of the High Court in Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; (2010) 239 CLR 531. Counsel for the Mr Grugeon also submitted that s 12 of the Act created the offence and that the section required an act or omission of the director to be specified. As it was not, the charge was bad in law.

The argument based on s 12 of the Act

I have concluded earlier in this judgment that the relevant act or omission in a claim against a director in reliance on s 26 of the Act is the act or omission of the corporation (see at [46]-[47] above). It follows that the argument that the charge is bad because s 12 requires specification of an act or omission of the charged director is incorrect.

The applicants ' submission based on Kirk

Each applicant submitted that consistent with Kirk the director was entitled to be informed by the prosecution of the due diligence he was required to undertake. They pointed to the different roles of management, executive directors and non-executive directors and the fact that different persons had different responsibilities within the company. They gave an example of the prejudice which could be suffered in circumstances where it was first suggested to a director in cross-examination that he or she could have done something which he or she had not had the opportunity to previously consider and submitted that the prejudice would be overcome if particulars were given.

The respondents ' submissions

The first respondent submitted that Kirk did not require the particulars sought as distinct from particulars of the contravention by the corporation. He submitted that there was no need to particularise what due diligence should be undertaken, that being a matter within the knowledge of the director. In Kirk v Industrial Court of New South Wales supra, the High Court held that in a prosecution under s 15 of the Act (then equivalent to s 8) it was incumbent on the prosecutor to identify the acts or omissions said to constitute the alleged contravention. It held that the decision of the Industrial Court to the contrary was a result of an erroneous construction of s 15 and led the Court to a jurisdictional error as the Court had no power to convict and sentence the defendant because no particular act or omission was identified as constituting the offence.

In Kirk the plurality pointed out (at [15]) that it was the relevant act or omission which gave rise to the offence. They stated (at [16]) that the necessity to identify the act or omission of the employer said to constitute the offence was even more apparent when regard was had to the defence in s 53 (the equivalent to s 28). They stated the position as follows:

"[27] The acts or omissions the subject of the charges here in question had to be identified if Mr Kirk and the Kirk company were to be able to rely upon a defence under s 53. The defendant in Johnson v Miller was placed in a similar position. The statute in question provided that a licensee of licensed premises would be liable to a penalty if a person was present on the premises during certain prohibited hours, unless the licensee could establish one of the justifications or excuses relating to that person's presence provided for in the statute. Dixon J observed that each of the justifications depended upon some feature pertaining to the person found in, or seen leaving, the premises and that no licensee could succeed in bringing the case within any of the grounds of excuse unless the person or persons were identified and their presence on a distinct occasion alleged.

[28] The statements of the offences as particularised do not identify what measures the Kirk company could have taken but did not take. They do not identify an act or omission which constitutes a contravention of ss 15(1) and 16(1). The first particular of the s 15(1) offence suggests that the Kirk company had some systems relating to the operation of the ATV in place, but that they were not sufficient. It does not identify the deficiency in the system or the measures which should have been taken to address it. The second particular does not identify what information, instruction or training was necessary to be given to Mr Palmer or the other employee of the Kirk company. The particulars of the s 16(1) offence say nothing about what should have been done to avoid exposing the contractors to risk to their health and safety from the use of the ATV. Needless to say, the appellants could not have known what measures they were required to prove were not reasonably practicable."

And:

[33] The propositions listed by his Honour appear to assume that the employer's obligation, to guarantee against risks in the workplace, remains in existence at all times and that the question of an employer's liability is to be determined by reference to it. There is no discussion of how the defences under s 53 can co-exist with that obligation. The only reference to the defences in the authorities referred to by his Honour is to the terms of s 53 and an acknowledgement that measures which may have been taken may be relevant to them. Since it was considered unnecessary for the prosecutor to identify those measures, it would appear to follow that the employer would be required to establish that there were no reasonably practicable measures, of any kind, which could have been addressed to the type of risk. If there was something further that could be done, the causal connection with the risk would remain and the employer would be guilty of an offence. The provisions of the OH&S Act relating to offence and defence were not intended to operate in this way.

[34] Walton J referred to earlier case law that the duty imposed upon an employer 'is to be construed as meaning to guarantee, secure or make certain' and that the duty is directed at obviating 'risks' to safety at the workplace. References to guarantees, and emphasis upon general classes of risks which are to be eliminated, tend to distract attention from the requirements of an offence against ss 15 and 16. The approach taken by the Industrial Court fails to distinguish between the content of the employer's duty, which is generally stated, and the fact of a contravention in a particular case. It is that fact, the act or omission of the employer, which constitutes the offence. Of course it is necessary for an employer to identify risks present in the workplace and to address them, in order to fulfil the obligations imposed by ss 15 and 16. It is also necessary for the prosecutor to identify the measures which should have been taken. If a risk was or is present, the question is - what action on the part of the employer was or is required to address it? The answer to that question is the matter properly the subject of the charge."

Their conclusion on this issue was set out at [37]-[38]:

"[37] It is not necessary to further consider the correctness of these findings. For present purposes it is sufficient to observe that his Honour's reasons disclose a wrong understanding of what constituted an offence against ss 15 and 16 and how the defence under s 53(a) was to be applied in proceedings for such an offence. His Honour did not appreciate that no act or omission on the part of the Kirk company had been charged. To the contrary, his Honour accepted the proposition that the prosecutor is not required to demonstrate that particular measures should have been taken to prevent the risk identified.

[38] A consequence of the matter proceeding to conviction on the charges as stated, absent the identification of measures the Kirk company should have taken, was that it was denied the opportunity to properly put a defence under s 53(a). Instead, the Kirk company was required to show why it was not reasonably practicable to eliminate possible risks associated with the use, or possible use, of the ATV. The guarantee against risk, seen as provided by s 15, was treated as continuing, despite a defence under s 53(a) being raised. The operation of that defence was treated as largely confined to an issue of reasonable foreseeability."

In the present case the applicants have received particulars of the acts and omissions by the corporations said to constitute its contravention.

The question of the need to particularise those acts of due diligence which a director was required to undertake to avail him or herself of the defence under s 26(1)(b) was not considered by the Court in Kirk. However, in my opinion, it does not follow from the reasoning of the plurality in that case that the prosecutor is required to particularise the due diligence which should have been undertaken if the defendant was to have the benefit of the defence under s 26(1)(b).

This is for two reasons. First, as I pointed out above, the relevant act or omission which gives rise to the offence is not the failure to exercise due diligence, but rather the act or omission of the corporation. Section 26(1)(b), like s 26(1)(a), is not an element of the offence; the subsections are defences. A director can demonstrate that he or she was not complicit in the act or omission which constituted the offer.

Second, once the director is aware of the acts or omissions constituting the contravention by the corporation, the director will have sufficient information to mount a defence under s 26(1)(b) if it is available. The director would be aware of the procedures which the corporation had in place to prevent the relevant act or omission occurring. He or she would be aware of the steps that he or she had taken by way of due diligence to ensure such procedures were adequate and that as a matter of fact they were implemented. In these circumstances it does not seem to me that it is incumbent on the prosecutor to inform the defendant of what was required to constitute a defence under s 26(1)(b).

That is not to say that if the prosecution proposes to contend that some particular conduct of the directors was required to satisfy s 26(1)(b) it should not inform the defendant of this fact. Failure to do so may lead to the defendant being denied procedural fairness at the trial and to a conviction being quashed on that ground. However, it does not follow that the charges are required to anticipate the defence and particularise what the prosecutor claims will be necessary for the defence to succeed.

It follows that this ground of attack on the charge is not made out.

The application for leave to amend

As I indicated the applicants sought leave to file an amended summons claiming that s 105 of the Act, which conferred jurisdiction on the Industrial Court to hear the proceedings, was invalid following the insertion of s 146C in the Industrial Relations Act. That section required the Industrial Relations Commission to give effect to certain aspects of government policy on public sector employment. It was said this fundamentally impaired the independence of members of the Commission, in particular its judicial members in the Industrial Court, as a result of which the Commission could not be a repository for the exercise of judicial determination of criminal culpability.

During the course of the hearing the applicants accepted that if s 146C had the effect contended for, rather than provisions such as s 105 of the Act conferring judicial power on the Court, it would be invalid. In these circumstances, the issue sought to be raised by the applicants would have no effect on the outcome of the proceedings. Further, the notice under s 78B of the Judiciary Act 1903 (Cth) did not raise the question of the validity of s 146C. In these circumstances, the Court refused leave.

Conclusion

It follows that each summons should be dismissed. The applicants should pay the costs of the first respondent in this Court, and of the second respondent on a submitting basis. There should be no order as to the costs of the Attorney General (the third respondent).

ALLSOP P: I agree with Bathurst CJ.

BEAZLEY JA: I agree with Bathurst CJ.

BASTEN JA : The issues and the procedural background to this matter have been set out by the Chief Justice and need not be repeated here. Subject to what follows, I agree with his Honour's reasons and with the orders he proposes.

Procedural issues

The applicants sought to invoke the supervisory jurisdiction of this Court under s 69 of the Supreme Court Act 1970 (NSW). To that end, they sought an order "removing the records of the Full Bench" of the Industrial Court into this Court. Given the terms of s 69, that order was otiose; however, the request might have focused attention on the nature of the proceedings in the Court below. If the records of the Full Bench were in issue, what was sought to be challenged were the answers given by the Full Court to the seven questions identified at [6] above. Those questions had been referred to the Full Bench by an order of Backman J made (in relation to the first six questions) on 8 March 2010 and (in relation to the seventh question) on 31 March 2010. However, the relief sought in this Court was not directed to the jurisdiction of the Full Bench to answer the questions, nor the answers given to those questions, but to the validity of two procedural steps taken in the course of the proceedings before a single judge of the Industrial Court.

Proceedings were commenced on 5 June 2007 by Mr Morrison, the prosecutor, filing applications in respect of each applicant for an order that he appear before the Industrial Court to answer the charge set out in the application. Such orders were made, ex parte, on 7 June 2007 by Staunton J.

On 9 October 2008 (16 months after the first order) an amended application for orders was made in respect of each applicant. Orders were, presumably, made on that day by a judge of the Court, although no copy of the orders appears in the application book in this Court. How the amendments came about was not explored. However, the Full Bench described the procedural history in its judgment, Morrison v Chevalley [2010] NSWIRComm 116, as follows:

"[3] On 7 June 2007, Staunton J made orders exparte in respect of each of the four defendants requiring each to appear before the Court on 27 July 2007 to answer the offence charged in each Application for Order filed on 5 June 2007.

[4] Mr Chevalley and Mr Grugeon entered pleas of not guilty before Staunton J on 15 February 2008. Hunter Quarries and Mr Badior subsequently entered pleas of not guilty.

[5] On 7 October 2008, the trials in respect of all four defendants commenced before Backman J; by consent, all matters were heard together. During the course of that and the following day the prosecutor opened the prosecution case and tendered five volumes of documentary evidence without objection.

[6] On 9 October 2008 the prosecutor, following discussion between counsel and without objection, sought and obtained orders from Backman J, substituting Amended Applications for Order in all four matters. ... Following the amendment, Hunter Quarries and Mr Badior entered a plea of guilty to the amended charges, though not accepting the truth of all the facts alleged by the prosecutor against them."

That situation invited attention to a number of issues. First, it would, if the applicants made good their substantive challenges, have raised questions as to the utility of the relief sought setting aside either or both of the orders to appear. Secondly, if the charges could validly be amended, it would have been necessary to consider whether or not a conditional injunction would have been appropriate, rather than an order prohibiting any further steps in the proceedings. Thirdly, if the real complaint was a failure to particularise, again, conditional relief might arguably have been sufficient. Fourthly, in circumstances where the Full Bench had, by consent, been invited to answer questions, there would have been an issue as to why this Court, in the exercise of the supervisory jurisdiction, should give relief not sought in the Court below. (The answers to the questions would no doubt have guided the trial judge in disposing of a motion to strike out or permanently stay the proceedings.) In the event, none of these questions need be answered.

There are further issues. It may have been assumed from the outcome of the proceedings in the High Court in Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531, that this Court's jurisdiction can be invoked in relation to any stage of the proceedings in the Industrial Court, without regard to the challenges raised in that Court or the relief sought there. It also appears to have been assumed that the protection provided by s 179 of the Industrial Relations Act 1996 (NSW) in respect of decisions of the Commission, other than decisions of the Full Bench made without jurisdiction, is ineffective, thus rendering an appeal to the Full Bench an optional diversion. Again, these questions need not be addressed in this case.

Finally, in respect of procedural issues, the first question referred to the Full Bench was whether that Court had power to determine the questions asked of it. It answered that question in the affirmative and there has been no challenge to that answer. The real complaint in this Court is that the Full Bench answered questions 2, 3 and 7 erroneously, although the answers were not appellable.

Validity of provision creating offence

There were, in substance, two primary issues to be determined in this Court. The first was whether the charges prepared by the prosecutor were defective in terms of their pleading. The second concerned the validity of s 26 of the Occupational Health and Safety Act 2000 (NSW), which, in combination with s 8(1) of that Act, constituted the legal basis for the charges. Logically, the latter question should be considered first. The answer to that question does not depend upon how the charges were formulated in the present case, nor the approach adopted by the Industrial Court in other cases, nor the conviction rate in the Industrial Court; rather, it depends upon the proper construction of the section within the statutory scheme and correct identification of the constitutional provision which, when applied to the section properly construed, would result in invalidity.

It is important to identify the constitutional principle against which the legislation is to be tested. In that regard, it is important to bear in mind that statutory invalidity invokes a constraint on legislative power and that the legislative power in question is that of the State, not the Commonwealth. The provision creates a statutory offence, the subject matter of which lies within the constitutional limits of the State legislature. At the heart of the applicants' argument is the proposition that the offence is defined in terms which permit conviction without the proper exercise of judicial power. The Constitution prevents a State legislature conferring a power on a State court incompatible with the status of that court as a potential recipient of federal judicial power. So understood (in broad terms, which require some refinement) the argument turned not solely on the terms of s 26, but the operation of s 105 of the Occupational Health and Safety Act , which conferred jurisdiction in respect of proceedings for an offence, including an offence under s 26, in the following terms:

" 105 Summary procedure for offences

(1) Proceedings for an offence against this Act or the regulations are to be dealt with summarily:

(a) before a Local Court constituted by a magistrate sitting alone, or

(b) before the Industrial Relations Commission in Court Session."

It is not in doubt that the principle of the separation of powers, as revealed in the Constitution, imposes greater restraints on the Commonwealth Parliament with respect to the exercise of federal judicial power than it imposes on State legislatures in respect of their own courts, even if potential recipients of federal judicial power. Accordingly, it is permissible to consider whether State legislation would contravene the relevant constitutional principle, had it been enacted by the Commonwealth Parliament as jurisdiction conferred on federal courts with the consequence that, if it passed that test, it must also clear the lower hurdle in respect of State legislation: H A Bachrach Pty Ltd v State of Queensland [1998] HCA 54; 195 CLR 547 at [14]. However, there are risks in adopting such an approach. First, it is apt to lead to an erosion of the basic distinction between the two situations. Secondly, it distracts attention from the characteristics and jurisdiction of the State court in question. Thus, s 105, for example, did not confer any jurisdiction on the Supreme Court. The essential characteristics of the Supreme Court are protected from interference by the State legislature because, in part, such courts are expressly identified in the Constitution as part of the "unitary national system of law" identified by Deane J in Breavington v Godleman [1988] HCA 40; 169 CLR 41 at 121 speaking of the general law, though not of course statutory law, and adopted in respect of the institutional structure of judicial power in Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; 189 CLR 51.

The argument for the applicants in the present case bore some similarity to that relied upon in Baker v The Queen [2004] HCA 45; 223 CLR 513. That case involved the operation of s 13A of the Sentencing Act 1989 (NSW) (since repealed) which permitted the Supreme Court to transform a life sentence into a minimum term and an additional term, the latter being a period during which the prisoner would be eligible for release on parole. However, where a person had been subject to a recommendation by the sentencing judge that he or she should never be released, additional statutory hurdles were placed in the way of both an order under s 13A and release on parole. Section 13A(3A) required the applicant to demonstrate "special reasons", a requirement "said to be devoid of content, and illusory": at [11] (Gleeson CJ). The Chef Justice continued:

"On that premise, in its application to people the subject of non-release recommendations, s 13A involved the Supreme Court in a charade. The legislature was using the forms of judicial procedure to mask the reality of the legislative decree, which was that these people were never to be released. On that premise, as a matter of principle, the case would be very close to Kable . It is the premise that is in contest."

The Chief Justice had earlier identified the principle in Kable as involving conferral of a power inconsistent with the exercise by the Supreme Court of federal judicial power. That principle was explained in the following terms:

"[5] The kind of inconsistency relied upon is that identified in Kable .... The principle for which that case stands as authority is that, since the Constitution established an integrated Australian court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts, State legislation which purports to confer upon such a court a function which substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid.

[6] The strength of that principle lies in its constitutional legitimacy. It was not an invention of a method by which judges may wash their hands of the responsibility of applying laws of which they disapprove. In some of the judgments in Kable , references were made to public confidence in the courts. Confidence is not something that exists in the abstract. It is related to some quality or qualities which one person believes to exist in another. The most basic quality of courts in which the public should have confidence is that they will administer justice according to law. As Brennan CJ said in Nicholas v The Queen :

'It is the faithful adherence of the courts to the laws enacted by the Parliament, however undesirable the courts may think them to be, which is the guarantee of public confidence in the integrity of the judicial process and the protection of the courts' repute as the administrator of criminal justice.'"

In the passage immediately before that quoted by Gleeson CJ in Baker , Brennan CJ had said in Nicholas v The Queen [1998] HCA 9; 193 CLR 173 at [37]:

"To hold that a court's opinion as to the effect of a law on the public perception of the court is a criterion of the constitutional validity of the law, would be to assert an uncontrolled and uncontrollable power of judicial veto over the exercise of legislative power. It would elevate the court's opinion about its own repute about to the level of a constitutional imperative".

As explained in Baker by McHugh, Gummow, Hayne and Heydon JJ at [40], the argument required that the phrase "special reasons" constituted a criterion devoid of meaning. That was necessary in order to establish the "charade". Their Honours rejected that submission at [41]:

"The qualification to s 13A(3A) may be attended by difficult questions of construction. Whether or not that is so, it is a qualification to which meaning not only can, but must, be given in the context of the facts advanced in any particular case as warranting the description 'special reasons'. The fact that reasons identified as 'special' may (indeed almost certainly would) be relevant to the exercise of the power of determination does not strip the expression 'special reasons' of meaning."

In the present case, as in Baker , the real question raised by the applicants was whether the statutory scheme embodied in s 26 of the Occupational Health and Safety Act rendered the exercise of jurisdiction by the Court "a charade", wherein judicial procedure was used as a mask for a legislative decree. That was so, the applicants submitted, because s 26 deemed each director of a company to have committed the offence committed by the company, the defences ostensibly provided in paragraphs (a) and (b), being illusory and devoid of practical content.

The criteria to be found in s 26(1)(a) and (b) do not come close, in terms of vagueness and uncertainty, to a phrase such as "special reasons". No doubt these provisions may involve questions of construction, but they adopt relatively certain criteria. For example, the concept of "influence" in paragraph (a) may involve matters of degree, varying from insignificant to controlling. The Court may need to determine whether the relevant influence must be at least material and not insignificant. The context in which the influence is relevant is the contravention by the corporation. The contravention will need to be specified, and there may be questions as to when, prior to the contravention, the influence could have been effective. The section can thus be seen to give rise to questions of legal construction and questions requiring the determination of factual matters involving evaluative assessment. A criterion is not, for those reasons, devoid of content. Similarly, paragraph (b) envisages that the director was not necessarily in a position to control the action of the corporation in the relevant respect but, being in a position of influence, could yet exercise due diligence to prevent the contravention. The fact that a contravention occurs does not deny the possibility that due diligence was exercised.

The applicants accepted that the reversal of the onus of proof did not render the proceedings incompatible with the exercise of judicial power. That concession was inevitable: see the examples of such laws being upheld noted by Gummow J in Nicholas at [152]. That being accepted, the suggestion that the exercise was in someway a charade, seeking to cloak a legislative decree of guilt with the false appearance of a judicial determination, cannot be sustained.

Challenge to pleading of charges

Although the applicants relied upon principles explained by the High Court in Kirk , counsel acknowledged that success for the applicants in the present case would require an extension of Kirk . In broad terms, Kirk required that a charge for a contravention of the statutory obligations of health and safety specify that which the employer did, or omitted to do. For an employer to be able to invoke a defence under s 53 of the Occupational Health and Safety Act 1983 (NSW) (the equivalent of s 26 of the current Act) by establishing that it was "not reasonably practicable" to comply with the provision of the Act or that the commission of the offence was due to causes over which the employer had no control and against which it was impracticable to make provision, it was necessary to know what steps were said to have been required (or avoided): 239 CLR 531 at [15]-[18] and [28]; see also Kirk Group Holdings Pty Ltd v WorkCover Authority (NSW) [2006] NSWCA 172; 66 NSWLR 151 at [100]-[102]. As the High Court explained at [14]:

"A statement of an offence must identify the act or omission said to constitute a contravention of s 15 or s 16. It may be expected that in many instances the specification of the measure which should have been or should be taken will itself identify the risk which is being addressed. The identification of a risk to the health, safety and welfare of employees and other persons in the workplace is a necessary step by an employer in discharging the employer's obligations. ... Sections 15 and 16 are contravened where there has been a failure, on the part of the employer, to take particular measures to prevent an identifiable risk eventuating. That is the relevant act or omission which gives rise to the offence."

The applicants sought to go a step further: they contended that, in the case of a director, it was necessary for the prosecutor to specify with precision what the director, as opposed to the company, ought to have done (in the case of an omission) and did not do.

There is an air of artificiality surrounding the submission. To adopt a simplified hypothetical based on the present case, let it be assumed that the driver lost control of the truck because of a failure of the braking system. That in turn was caused by a loss of brake fluid which should have been identified had a pre-start check been carried out. The act or omission of the company was failing to require the driver to carry out a pre-start check.

Section 12 provides that a person who contravenes, whether by act or omission, a relevant provision is guilty of an offence. In the example, the contravention was a failure to ensure the safety of the driver of the truck. The act or omission of the employer was a failure to require the driver to undertake a pre-start check. Each of those elements must be pleaded by the prosecutor. The employer could then determine whether it had a defence under s 28. If the site manager had taken the driver through the pre-start check, had given clear and firm directions to the driver to undertake the check when commencing work each day, set schedules which provided time for the check to be undertaken, and observed from time to time that the instructions were followed, a defence might be made out. A contravention by the employer would then depend on failure by the manager to have taken one of the necessary steps. In that case, a director might wish to establish that:

(a) no material risk had arisen;

(b) but, if it had, the company had taken all reasonably practicable steps to guard against it;

(c) but, if the case failed at the earlier stages, he or she, as a director, had not been in a position to influence the conduct of the corporation or, if in such a position, had acted with due diligence in seeking to prevent the contravention.

In order to be able to defend the charge at the first two stages, Kirk requires that the prosecution plead the elements which would permit that course. In a practical sense, the director may not be able to raise a defence under s 28, until it be known in what respect the company failed in its defence. That, however, does not involve a pleading question in respect of the charge: rather it depends upon the defences pleaded by the company and their success or failure. Thus, in the example given above, the company may have been found to contravene the Act because the manager directed the driver to carry out the pre-start check on a weekly basis, rather than a daily basis, in contravention of the company's safety manual. On the assumption that the director and the company have no conflict of interest, and in the interests of avoiding inconsistent verdicts, one may expect the charges against the company and against the director to be heard concurrently. Nevertheless, procedural fairness may require that the director's defence be adjourned until after a judgment has been given in respect of the charge against the company. The director will then be bound by the outcome in that matter, in respect of that element of the charge against the director personally, but will be able to reserve his or her defence until the outcome is known.

The example given is entirely hypothetical and based on assumptions which will not arise in every case. Its purpose is to demonstrate that procedural fairness in respect of a director will not impose pleading requirements on the prosecutor beyond those engaged by the need to plead:

(a) each element of the charge against the corporation, and

(b) the status of the defendant as a director or as a person concerned in the management of the corporation and, if necessary, the facts necessary to establish that status, for the purposes of s 26(1).

The hypothetical example is not dependent upon whether the corporation is in fact charged. Nor is it necessary for present purposes to address the significance of a conviction in separate proceedings.

Conclusions

I agree with the reasons given by the Chief Justice for refusing leave to amend the summons: at [92]-[93] above.

For the reasons given by the Chief Justice, and for the further reasons set out above, I agree that the summons should be dismissed. The applicants should pay the costs of the first respondent in this Court, and of the second respondent on a submitting basis. There should be no order as to the costs of the Attorney General (the third respondent).

SACKVILLE AJA: Subject to one matter, I agree with the orders proposed by the Chief Justice and with his Honour's reasons.

The qualification is that I prefer to express no view as to whether a director who is unable to make out a defence under either s 26(1)(a) or s 26(1)(b) of the Occupational Health and Safety Act 2000 can nonetheless rely on the defences available under s 28. It is not necessary to resolve this issue for the purposes of the present case and, although raised in the course of argument, was not the subject of fully considered submissions. In my opinion, the issue should be decided in a case where the facts make it necessary to do so.

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Annexure (PDF)

Decision last updated: 28 May 2013

Medium Neutral Citation:	Chevalley v Industrial Court of New South Wales [2011] NSWCA 357
Hearing dates:	30 August 2011
Decision date:	24 November 2011
Before:	Bathurst CJ at [1]; Allsop P at [95]; Beazley JA at [96]; Basten JA at [97]; Sackville AJA at [123]
Decision:	(1) Each summons dismissed. (2) Applicants to pay the costs of the first respondent in this Court. (3) Applicants to pay the costs of the second respondent on a submitting basis. (4) No order as to the costs of the Attorney General (third respondent). [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	ADMINISTRATIVE LAW - judicial review - constitutional validity of legislation - whether s 26 of the Occupational Health and Safety Act 2000 violates the principles underlying Ch III of the Constitution CONSTITUTIONAL LAW - constitutional validity of legislation - whether s 26 of the Occupational Health and Safety Act 2000 violates the principles underlying Ch III of the Constitution CRIMINAL LAW - director's liability for corporation's contravention - whether defences in Occupational Health and Safety Act 2000 s 26 and s 28 illusory EVIDENCE - admissibility - whether certificate of conviction of corporation admissible and sufficient to prove essential fact of corporation's contravention of the Occupational Health and Safety Act 2000 - Evidence Act 1995 s 178 PROCEDURE - civil - documents - amendment - refusal to allow amendment - issue not raised by notice given under Judiciary Act 1903 (Cth) s 78B STATUTORY INTERPRETATION - Occupational Health and Safety Act 2000 s 26 - whether charges bad in law for failing to particularise steps defendant should have taken to avoid contravention - whether charges bad in law for failing to particularise act or omission of defendant constituting contravention
Legislation Cited:	Criminal Appeal Act 1912, s 5AE Constitution (Cth), s 71, s 77(iii), s 78B Evidence Act 1989 Evidence Act 1995, s 178(1) Industrial Relations Act 1996, s 146C, s 196 Judiciary Act 1903 (Cth) Occupational Health and Safety Act 2000, s 8, s 12, s 26, s 28, s 105
Cases Cited:	APLA Limited v Legal Services Commission of New South Wales [2005] HCA 44; (2005) 224 CLR 322 Baker v R [2004] HCA 45; (2004) 223 CLR 513 Bass v Permanent Trustee Co [1999] HCA 9; (1999) 198 CLR 334 Chu Kheng Lim v Minister for Immigration [1992] HCA 64; (1992) 176 CLR 1 Commissioner of Taxation v Price [2006] QCA 108; (2006) 2 Qd R 316 Gyspy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4; (2008) 234 CLR 532 HA Bachrach Pty Ltd v Queensland [1998] HCA 54; (1998) 195 CLR 547Hogan v Hinch [2011] HCA 4; (2011) 85 ALJR 398 Hollington v F Hewthorn & Co Ltd [1943] KB 587 Hookam v The Queen [1994] HCA 52; (1994) 181 CLR 450 Inspector Aldred v Herbert [2007] NSWIRComm 170 Inspector Hayes v Santos and Lorenzo [2009] NSWIRComm 163 Inspector James v Ryan [2009] NSWIRComm 215 Inspector James v Sunny Ngai [2007] NSWIRComm 203 International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319 Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51 Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; (2010) 239 CLR 531 Kumar v Ritchie [2006] NSWIRComm 323 Liang v Inspector David Farmer [2010] NSWIRComm 156; (2010) 199 IR 116 Morrison v Powercoal Pty Limited [2004] NSWIRComm 297 Nicholas v The Queen [1998] HCA 9; (1998) 193 CLR 173 Powercoal Pty Limited v Industrial Relations Commission [2005] NSWCA 345; (2005) 64 NSWLR 406 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 South Australia v Totani [2010] HCA 39; (2010) 242 CLR 1 T & M Industries (Aust) Pty Ltd v Sequeira [2006] NSWIRComm 25 The Prothonotary v Sukkar [2007] NSWCA 341 Williamson v Ah On (1926) 39 CLR 95 WorkCover Authority of New South Wales (Inspector Lane) v Australian Winch & Haulage Co Pty Ltd [2000] NSWIRComm 214
Texts Cited:	J Heydon, Cross on Evidence (8th Australian Ed, LexisNexis)
Category:	Principal judgment
Parties:	Grahame Anthony Chevalley (first applicant) Hilton Ross Grugeon (second applicant) Inspector Rodney Morrison (first respondent) Industrial Court of New South Wales (second respondent) Attorney General of New South Wales (third respondent)
Representation:	M Thangaraj SC with P Keyzer (first applicant) A Moses SC with D Nagle and D Dinnen (second applicant) R Burbidge QC with M Scott and I Taylor (first respondent) S Lloyd QC with S Robertson (on behalf of the Attorney General) McDonald Johnson Lawyers (first applicant) Greg Murray Solicitor (second applicant) Crown Solicitors Office (first, second and third respondents)
File Number(s):	2010/342090
Decision under appeal	Jurisdiction: 9105 Citation: Morrison v Chevalley [2010] NSWIRComm 116 Date of Decision: 2010-08-24 00:00:00 Before: Boland J President, Walton J Vice-President, Haylen J, Staff J File Number(s): IRC 956 and IRC 957 of 2007