Chevally & Anor v Inspector Rodney Morrison

[2012] HCATrans 31

[2012] HCATrans 031

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S414 of 2011

B e t w e e n -

GRAHAME ANTHONY CHEVALLEY

First Applicant

HILTON ROSS GRUGEON

Second Applicant

and

INSPECTOR RODNEY MORRISON

First Respondent

INDUSTRIAL COURT OF NEW SOUTH WALES

Second Respondent

ATTORNEY GENERAL OF NEW SOUTH WALES

Third Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 FEBRUARY 2012, AT 10.49 AM

Copyright in the High Court of Australia

__________________

MR A.R. MOSES, SC:   If it pleases the Court, I appear with my learned friend, MR D. KEYZER, for the applicants.  (instructed by McDonald Johnson Lawyers)

MR R.J. BURBIDGE, QC:   May it please the Court, I appear with my learned friend, MR I. TAYLOR, for the first respondent.  (instructed by Crown Solicitor (NSW))

MR S.B. LLOYD, SC:   May it please the Court, I appear with MR S. ROBERTSON for the third respondent, Attorney‑General for New South Wales.  (instructed by Crown Solicitor (NSW))

GUMMOW J:   There is a submitting appearance from the Industrial Court.  Yes, Mr Moses.

MR MOSES:   Your Honours, there are two essential issues which are raised by the applicants in relation to the present application for special leave.  The first is whether a prosecutor has an obligation to particularise the acts or omissions of a director or manager who is subject to a criminal charge laid pursuant to section 8 and section 26 of the Occupational Health and Safety Act by reference to section 12 of that Act and, second, if there is no such requirement, is section 26 of the Act invalid because it violates the principles that underlie Chapter III of the Commonwealth Constitution?

In Kirk v Industrial Court, which is at page 40 of the applicant’s authorities, this Court analysed in detail the right of a defendant to be informed of acts or omissions in order to enable a defendant to engage defences then available under the 1983 Occupational Health and Safety Act.  The occupational health and safety legislation which was considered by the New South Wales Court of Appeal in this matter for all intents and purposes is identical to the provisions contained in the 1983 Act which this Court examined in Kirk, with one important exception, namely, section 12 of the 2000 Act which is at page 2 of the applicant’s authorities, and I will take the Court to the significance of that provision shortly.

This Court in Kirk did not expressly deal with the obligations of a prosecutor to plead or particularise the personal acts or omissions of a director who is charged pursuant to section 26 of the Act.  The reason for that, of course, is apparent from a reading of the decision.  Once the Court held that the prosecutor had failed to disclose and establish the acts or omissions of the corporate defendant in relation to the alleged contravention of section 15 of the 1983 Act which resulted in a miscarriage of justice the charge against the director defendant also fell away.

However, it is contended by the applicants that the reasoning of this Court in Kirk at paragraph 14, which is at page 26 of the authorities, paragraph 15 at page 27 of the authorities folder, paragraph 26 and in particular the first sentence of that paragraph at page 30 of the authorities folder, and paragraph 37 at page 34 of the authorities folder, again the first sentence, equally applies to a charge which a defendant director faces pursuant to section 26 of the Act. 

The essence of the Court’s reasoning in Kirk was that in a prosecution pursuant to the 1983 Act the prosecutor must set out the acts or omissions of the defendant to enable the defendant to engage a defence that is available pursuant to the Act, and that was to ‑ ‑ ‑

GUMMOW J:   Well, what do you say about paragraph 21 of the New South Wales Attorney’s submissions?

MR MOSES:   Your Honour, the submission of the applicant in respect of that issue, of course assuming that it was within the constitutional power of the State Parliament to pass a law, on our statutory construction argument the proposition put forward by the prosecutor is incorrect.  We say that procedural fairness dictates that there be identified or particularised the acts or omissions of the accused because of the nature of the offence.  It is one of complicity, which is what has been observed by Chief Justice Bathurst in the decision below, that the essential feature of a section 26 offence is that the director was somehow complicit in the contravention by the company, and I will come to that ‑ ‑ ‑

HAYNE J:   Well, by reference to the text of section 26(1), what act, fact, matter or circumstance requires particularisation?

MR MOSES:   Those matters, your Honour, which it is said the director, in essence, contributed to the act or omission of a corporation.

HAYNE J:   That is not by reference to the text, Mr Moses – by reference to what elements to section 26(1) because 26(1) provides, does it not, that each director “is taken to have contravened”.  Now, is it said that some further particularisation is required of any of those elements?

MR MOSES:   It is respectfully submitted, your Honour, by reference to section 12 of the Act that what is required to be particularised by the prosecutor, those matters by reference to section 26, that the prosecutor alleges there was a failure by the director not to exercise due diligence, for instance, in subsection (1).  Can I explain the point this way, your Honours?  At section 12 of the 2000 Act which is at page 2 of the applicant’s authorities folder, it creates the offence and penalty.  Section 26 talks about contraventions and section 8 talks about duties, but section 12 talks about offences and penalties. 

The Court will note that that is the provision that provides for individuals who are previous offenders to be sentenced to a maximum term of imprisonment for two years.  Section 12, of course, was not before this Court in the Kirk determination.  But at the outset it is of course accepted by the applicants that the observations of Chief Justice Bathurst at paragraph 47, page 212 of the application book, is correct in that sections 8, 12 and 26 operate to create the relevant liability. 

We accept that the provisions operate together but not in the way that the learned Chief Justice and the court below held.  At the outset, the applicant stressed that section 12 does not, by express language, abrogate the principle of common law that a person accused of a crime is entitled to be given particulars of the crime with which they have been personally charged.  Justice McHugh in Krakouer – if I can provide your Honours with a copy of that decision, which is the second document in the bundle.

GUMMOW J:   Yes.

MR MOSES:   It is page 223.

GUMMOW J:  194 CLR 202.

MR MOSES:   Sorry, your Honour, page 223, that Justice McHugh observed that the court will not:

ignore the clear words of a provision so as to give it a meaning that would or might make it easier to convict and accused if the intention of the legislature is at best a matter of contestable opinion -

The applicants contend that it is with those principles in mind that section 12 should be interpreted.  Section 12, firstly, refers to persons – the subsections of section 12 make it clear that the word “person” is used in a legal sense to refer to corporations and individuals.  Section 12 then states:

who contravenes, whether by act or omission, a provision of this Division –

For present purposes, the relevant provision of this division is the duty in section 8 of the Act.  The next question concerns the proper interpretation of the words “whether by act or omission”, which the applicants rely upon, within a section that is concerned with contraventions and contemplates different penalties for different types of persons and remembering that section 12 is to be construed together with sections 8 and section 26 else there could be no penalties for contraventions of those provisions. 

A natural and ordinary reading of the language of section 12, yields the conclusion that the contravention by a corporation, or individual, might be by act or it might be by omission or, perhaps, by multiple acts or omissions.  The finding of guilt of an offence is based on the conclusion of the court that has a person has, by their act or omission, contravened the relevant provision.

Section 26 does not talk about guilt or penalty.  Only section 12, in the applicant’s contention, permits the Industrial Court to determine criminal guilt and order a penalty.  The Court of Appeal, of course, your Honours, did not take this approach.  The court below took the approach that section 26 has a restrictive effect on section 12.  In our respectful submission, it should have been the other way around. 

That approach, it is respectfully submitted, was inconsistent with the principles of construction enunciated by Justice McHugh in Krakouer.  It is also inconsistent with the approach taken by this Court, it is respectfully submitted in Kirk.  If the legislature intended to abrogate the principle that a person charged with a crime is given particulars of the crime charged, then the intention would need to be clearly manifested by the clear terms of the sections in the Act and, hence we respectfully submit, the significance of section 12. 

The Act itself requires that there be an act or omission on the part of a corporate defendant as a precursor to guilt as this is the essential nature of the offence and so too, it is respectfully submitted, by reading section 12 with section 26, does the same reasoning apply in respect of a director defendant.  Section 12 does not state that a person may be convicted of someone else’s act or omission and if there is any conflict between section 26 and section 12 of the Act, then the conflict should be resolved in a manner conformable to the interests of the accused. 

Your Honours, those contentions, of course, were rejected as I have said by the court below and the relevant reasoning appears at paragraphs 87 to 90 of the application book at pages 226 and 227 of the application book at paragraphs 87 to 90.  In essence, the conclusion of the court was that provided the acts or omissions of the corporation have been pleaded, the director is thereby informed of the measures that should have been taken by the corporation and, it follows, by the director to avoid the risk. 

HAYNE J:   You necessarily challenge paragraph 88 of the Court of Appeal reasoning, do you not, at page 227?  Where lies the error?

MR MOSES:   Your Honour, the reasoning of the Chief Justice in the last sentence of paragraph 88 concludes that:

A director can demonstrate that he or she was not complicit in the act or omission which constituted the offer.

That is by reference to the defences available in section 26.  The error there, it is respectfully submitted, as we contended below, was that a director is unable to demonstrate those matters unless the act or omission is relevantly pleaded, that is, the act or omission of the director which makes that individual complicit in the offence is relevantly pleaded by the prosecutor.

Section 12 was not dealt with, your Honours, as we say it ought to have been, in a consideration of section 26.  If the actions of the applicants are not the subject of a charge or allegation by the prosecutor, the applicants face the real possibility of having those acts or omissions put to them for the first time during cross‑examination.  This approach denies the applicants the opportunity to properly defend themselves.

This approach also denies the court the opportunity to ensure that only relevant evidence is admitted in the prosecution case and the accused being informed of the substance of the act or omission that is referred to in section 12 of the Act.  We say that this is identical by parity of reasoning to the error identified by this Court in Kirk at paragraph 37.  However, the basis for the legislation to be interpreted, it does not warrant the inference that the procedural safeguards required by this Court’s decisions in Johnson v Miller  and in Kirk are not to be applied.

Just before I go to the second point, your Honours, can I ask that your Honours have regard to the charge which the applicants face in respect of this matter and which I should have taken your Honours to earlier.  It is at page 160 of the application book.  The first applicant, your Honours, relevantly, is the managing director of the entity, Hunter Quarries, and the second applicant is the chairman.  The contravention of the first applicant is set out at page 160, line 50, through to page 161, line 10. 

Your Honours will see that all that is pleaded is that the defendant was a director of the corporation and that the defendant was concerned in the management of the corporation as the managing director of the corporation.  It then pleads the contravention of the corporation at page 161.  There is no allegation from the terms of the provision that the defendant director was in any way complicit in the contravention by the corporation, other than, of course, impliedly by the person holding the office of managing director.              That is all that the applicant, the first applicant and, indeed, the second applicant, have been informed as to how it is that they come before the Court in respect of this particular charge.

HAYNE J:   Your argument has to go so far as to say that that is insufficient to state the relevant offence.  It is not a question of particulars.  There is an element missing on your argument, is there not?

MR MOSES:   We say that is by reference to section 12, where it stipulates act or omission, and I know, your Honour, I have come back to that a number of times, but we say that is the guiding provision in respect of how the Act is to be interpreted and that is all, your Honour, that the prosecutor asserts in the proceedings below.  It needs to establish that there existed a corporation of which the individual was a director and, secondly, that the corporation contravened the Act and that is all and that prima facie the individual was guilty of an offence unless they make good a defence that is available pursuant to section 26. 

It is held against us, your Honours, that such a provision is not remarkable by reference to the decision of this Court in Hookham, which is relied upon by our friends.  Your Honour, that decision is located at page 106 of the applicant’s authorities which our friends have referred to in their submissions.  Section 8Y(2) of the Taxation Administration Act, which is at page 111 of the authorities folder, is of course nothing like section 26 of the Occupational Health and Safety Act at any rate.  It expressly contemplates lack of complicity as a defence.  That is not the defence that is available to an individual in respect of this matter. 

Your Honours, if I can then quickly turn to the second point.  In the event that the Court of Appeal’s approach to the construction of sections 8, 12 and 26 is correct, the alternative submission was advanced below that section 26 is constitutionally invalid.  On that construction, the effect of section 26 is that when a corporation is in breach of the Act the directors are also taken to be in breach of the Act unless sections 26(1)(a) or (b) or satisfied.  The construction presumes the guilt of the accused and places the onus on the accused to resist a conclusion that he or she is guilty without being accorded the procedural fairness of being told of their actions.

GUMMOW J:   I think there is an attempted misapplication of the International Trust Case in paragraph 18 of your reply.  Do not take up time with it now, but International Trust was all about the vice of ex parte proceedings, and that is not this case. 

MR MOSES:   I accept that, your Honour, the context of the principles of procedural fairness that were referred to by the Court in that matter.  Your Honour, the applicants do not contend that section 26 is invalid because it reverses the onus of proof in a criminal proceeding.  If the Court of Appeal’s approach to the construction of section 26 is correct section 26 is invalid because of its restrictive effect on the judicial function.  It presumes the guilt of the accused directors for the crime of a legally separate entity and abrogates principles of procedural fairness by denying them the details of their acts or omissions.  We have referred to, in that context, observations of your Honour Justice Gummow in Nicholas 193 CLR 173 at page 232.

GUMMOW J:   The law challenged in Nicholas was upheld.

MR MOSES:   It was, your Honour, but your Honour made observations at page 181 of the applicant’s bundle of authorities in respect of if there is an interference with the governance of a trial and the distortion of its predominant characteristics as to involve a court in a determination of criminal guilt, otherwise than by the exercise of judicial power then that would render a law invalid.  To similar effect, your Honours, we rely upon observations made by Justice Hayne in South Australia v Totani, which is at page 427 of the applicant’s authorities, at line 40, paragraph 232 of that decision, that:

A central and informing principle of criminal liability in Australia, as elsewhere, is that guilt is personal and individual.

Corporate liability, of course, we accept, can be sheeted home to directors, but there still has to be a criminal trial and that criminal trial must be compatible with the principles that underlie Chapter III of the Constitution, placing persons charged with complicity in a criminal offence in a position where they are not told how they were complicit is inconsistent with traditional judicial process and imposes on the court a proceeding not otherwise known to law and repugnant to the judicial process.

Your Honours, there is one final matter that I wish to address the Court on.  I notice the red light but I should note that section 26, a central feature of this legislation, is of course no longer in the form that is the subject of this special leave application; it was repealed effective on 7 June 2011 and further, on 1 January this year the Work Health and Safety Act, as part of the Commonwealth harmonisation of occupational health and

safety laws came into effect and the provision that now relevantly applies to directors is section 27, which is at page 3C of the applicant’s authorities. 

It is said against us, your Honours, that because the law has amended this does not raise a matter of sufficient public interest and we respectfully contend that given that this case is one of a number before the Court where an individual’s liberty may be potentially at stake, that that would not detract from leave being granted in this matter.  Those are the submissions of the applicants.  Thank you, your Honour. 

GUMMOW J:   We do not need to call on you, Mr Burbidge and Mr Lloyd.

The decision of Chief Justice Bathurst is not attended by doubt.  Special leave is refused.

AT 11.13 AM THE MATTER WAS CONCLUDED