Jamal v Workers Compensation Nominal Insurer

[2023] NSWCA 4

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Jamal v Workers Compensation Nominal Insurer [2023] NSWCA 4

Hearing dates:

20 October 2022

Decision date:

03 February 2023

Before:

Macfarlan JA at [1];
White JA at [2];
Mitchelmore JA at [93]

Decision:

Appeal dismissed with costs

Catchwords:

WORKERS COMPENSATION – uninsured corporate employer – culpable director – employer deregistered after service of notices under s 145(1) of the Workers Compensation Act 1987 (NSW) – uncontentious that employer contravened s 155(1) of the Workers Compensation Act by failing to obtain a workers compensation insurance policy for injuries occasioned to employees – appellant was sole director of employer at time of contravention – where respondent sought to recover payments granted to injured employer from appellant as a “culpable director” under s 145A(1) of the Workers Compensation Act – where primary judge found that appellant actually knew of circumstances amounting to contravention for the purposes of defeating reliance on s 145A(5)(a) of the Workers Compensation Act – where primary judge also found that appellant was in a position to influence employer’s conduct in relation to the contravention so as to defeat reliance on s 145A(5)(b) of the Workers Compensation Act – whether primary judge erred in finding that the appellant actually knew of the facts amounting to contravention – whether primary judge erred in finding that appellant was in a position to influence employer’s conduct in relation to the contravention – whether primary judge erred in quantifying amount recoverable from appellant – each ground of appeal dismissed, with costs

APPEALS – evidence – credibility findings – functions and obligations of an appellate court – basis and scope for appellate intervention upon trial judge’s findings of credit

WORDS AND PHRASES – “knowledge” in s 145A(5)(a) of the Workers Compensation Act

Legislation Cited:

Occupational Health and Safety Act 2000 (NSW), s 26(1)(a)

Trade Practices Act 1975 (Cth), ss 52, 75B

Workers Compensation Act 1987 (NSW), ss 145, 145A, 155, 155AA, 174

Cases Cited:

Chevalley v Industrial Court of New South Wales (2011) 82 NSWLR 634; [2011] NSWCA 357

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Giorgianni v The Queen (1985) 156 CLR 473; [1985] HCA 29

Johnson v Youden [1950] 1 KB 544

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Pereira v Director of Public Prosecutions (1988) 63 ALJR 1; [1988] HCA 57

White Constructions Pty Ltd v PBS Holdings Pty Ltd [2020] NSWCA 277

WorkCover Authority of New South Wales v Edwin Tucker and George MacDonald [2012] NSWDC 226

Workers Compensation Nominal Insurer v Brasnovic [2013] NSWDC 131

Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65

Category:

Principal judgment

Parties:

Noora Jamal (Appellant)
Workers Compensation Nominal Insurer (Respondent)

Representation:

Counsel:
T G G Bateman (Appellant)
D C Price with M Thompson (Respondent)

Solicitors:
Bridges Lawyers (Appellant)
Turks Legal (Respondent)

File Number(s):

2022/78092

 Decision under appeal 

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Citation:

[2022] NSWDC 10; [2022] NSWDC 105

Date of Decision:

22 February 2022

Before:

Gibson DCJ

File Number(s):

2019/19349

HEADNOTE

[This headnote is not to be read as part of the judgment]

In April 2014, an employee of Al Maamoun & Co Pty Ltd (“the Company”), Mr Khaled Jamal, suffered an injury during the course of his employment. From January of that year, the Company had been in the business of running a small Mediterranean grocery store in Auburn, with plans to expand to new premises located at Bondi Junction. The appellant, Ms Noora Jamal, was the Company’s sole director at the time that Mr Jamal was injured.

In contravention of s 155(1) of the Workers Compensation Act 1987 (NSW) (“the Act”), the Company did not hold the benefit of a workers compensation insurance policy as at the date of Mr Jamal’s injury. As permitted by s 140(1)(a) of the Act, Mr Jamal, in due course, made a claim for workers compensation against the Workers Compensation Nominal Insurer (“the Nominal Insurer”). After compensating Mr Jamal in the amount of $258,565.75, the Nominal Insurer sought to recover its expenditure from Ms Jamal as a “culpable director” within the meaning of s 145A(4) of the Act (the Company having been served two notices seeking reimbursement, in accordance with s 145(1) of the Act, before its deregistration in January 2017).

The Nominal Insurer commenced proceedings against Ms Jamal in the District Court of New South Wales on 18 January 2019. The appellant did not challenge the primary judge’s finding that the Company was not an “exempt employer” for the purposes of s 155AA(1) of the Act.

The primary judge (Gibson DCJ) held that the appellant was liable to reimburse the respondent for the full amount received by Mr Jamal following his claim for workers compensation, plus interest and costs. The appellant’s evidence, along with the evidence of the Company’s manager, Mr Mark Richerdson, that she was unaware of the Company’s contravention of the Act and that she was not in a position to influence the Company’s conduct in relation to that contravention, was rejected by the primary judge.

On appeal, the issues before the Court were:

1. Whether the primary judge had erred in finding that the appellant had actual knowledge of the Company’s contravention of s 155(1) of the Act, so as to disentitle her to the exculpatory ground contained in s 145A(5)(a) of the Act (“Ground 1”);

2. Whether the primary judge had erred in finding that, if the appellant did not have actual knowledge of the Company’s contravention of s 155(1) of the Act, the appellant had been wilfully blind to such contravention, so as to disentitle her to the exculpatory ground contained in s 145A(5)(a) of the Act (“Ground 2”);

3. Whether, as contended by the respondent, the appellant was required to establish she had neither actual nor constructive knowledge of the Company’s contravention to be exercised under s 145A(5)(a);

4. Whether the primary judge had erred in finding that the appellant had not established that she had not been in a position to influence the Company’s conduct in relation to its contravention of s 155(1) of the Act, so as to disentitle her to the exculpatory ground contained in s 145A(5)(b) of the Act (“Ground 3”);

5. In the alternative to Grounds 1-3, whether the primary judge had erred in finding that the appellant was liable to pay the full amount of $258,565.75, as specified in the respondent’s second notice for reimbursement served under s 145(1) of the Act (“Ground 4).

The Court held (White JA, Macfarlan and Mitchelmore JJA agreeing), dismissing the appeal in its entirety with costs:

As to issues (i) and (ii):

1. There was no error in the primary judge’s conclusion that the Company contravened s 155(1) of the Act with the appellant’s actual knowledge. It was open to the primary judge to reject the evidence of the appellant and Mr Richerdson and to conclude that the appellant had not discharged the onus that lay on her to establish a ground of exculpation

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22; Lee v Lee (2019) 266 CLR 129; [2019] HCA 28, considered.

1. There was no error in the primary judge’s alternative finding that the appellant had been wilfully blind to the Company’s contravention of s 155(1) of the Act: [1] (Macfarlan JA), [71] (White JA), [93] (Mitchelmore JA).

2. With respect to the respondent’s notice of contention, there was no error with the primary judge’s decision that “knowledge” within the context of s 145A(5)(a) means actual knowledge: [1] (Macfarlan JA), [67]-[69] (White JA), [93] (Mitchelmore JA).

Workers Compensation Nominal Insurer v Brasnovic [2013] NSWDC 131, approved.

WorkCover Authority of New South Wales v Edwin Tucker and George MacDonald [2012] NSWDC 226, disapproved.

Giorgianni v The Queen (1985) 156 CLR 473; [1985] HCA 29; Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65; Pereira v Director of Public Prosecutions (1988) 63 ALJR 1; [1988] HCA 57, considered.

As to issue (v):

1. There was no error in the primary judge’s conclusion that the appellant had failed to discharge her onus of proving that she was not in a position to influence the Company’s conduct in relation to its contravention of the Act: [1] (Macfarlan JA), [81]-[83] (White JA), [93] (Mitchelmore JA).

2. In any event, though not agitated by the parties on this basis, it might be the case that the appellant’s position as sole director of the Company would have been sufficient to disentitle the appellant to exculpation under s 145A(5)(b) of the Act: [1] (Macfarlan JA), [74]-[76] (White JA), [93] (Mitchelmore JA).

Chevalley v Industrial Court of New South Wales (2011) 82 NSWLR 634; [2011] NSWCA 357, considered.

As to issue (v):

1. There was no error in the primary judge’s quantification of the debt owed by appellant to the respondent. The appellant’s submission that a second notice served upon the Company was invalid, was rejected on the basis that s 145(1) of the Act does not prescribe the form which any such notice should take: [1] (Macfarlan JA), [90]-[91] (White JA), [93] (Mitchelmore JA).

JUDGMENT

1. MACFARLAN JA: I agree with White JA.

2. WHITE JA: This is an appeal from orders of the District Court (Gibson DCJ) in which judgment was given for the respondent, the Workers Compensation Nominal Insurer, against the appellant, Ms Noora Jamal in the sum of $258,565.75 plus interest and costs (Workers Compensation Nominal Insurer v Jamal [2022] NSWDC 10; Workers Compensation Nominal Insurer v Jamal (No. 2) [2022] NSWDC 105).

3. $258,565.75 was the total of workers compensation payments made by the Nominal Insurer in respect of an injury to a Mr Khaled Jamal. He was injured in the course of his employment on 7 April 2014 when employed by Al Maamoun and Co Pty Ltd (“the Company”). The appellant, Ms Jamal, was, at all relevant times, the sole director of the Company. She was held liable for that sum as a “culpable director” within the meaning of s 145A(4) of the Workers Compensation Act 1987 (NSW) (“the Act”). The primary judge found, relevantly, that the Company was not an exempt employer within the meaning of s 155AA(1) of the Act. The Company was thereby in breach of its obligation under s 155(1) to take out a policy of insurance in respect of its liability including a liability for compensation in the nature of workers compensation for any injury to its workers. Section 155AA(1) provides:

“155AA Exempt employers not required to obtain policy of insurance

(1)   An employer is an exempt employer during a financial year while the employer has reasonable grounds for believing that the total amount of wages that will be payable by the employer during the financial year to workers employed by the employer will be not more than the exemption limit for that financial year.”

4. “Wages” are defined in s 155AA(8) as meaning:

“wages means wages as defined in section 174 and includes any distribution to a worker as a beneficiary under a trust that would (under section 174AA) constitute wages for the purposes of section 174.”

5. “Wages” for the purposes of s 174 include any consideration in money or money’s worth given to a worker under a contract of service.

6. The exemption limit for the financial year was $7,500.

7. The Company commenced business in January 2014, only three months before Mr Jamal’s injury. It operated a grocery store in Auburn that was open seven days a week from 6.00am to midnight. Ms Jamal’s brother, Mr Mark Richerdson, and their mother resided above the shop. The employees of the Company who worked in the shop were members of the family. The Company produced no records of their wages. The main person who served in the shop was a Mr Maamoun Derbas. In a statement given by Ms Jamal on 1 April 2015, she stated that Mr Derbas generally worked seven days per week at different hours. He would take money from the till which was recorded in a book kept in the shop. Other persons would take money as needed and the family might take stock from the shop as food as required.

8. Mr Richerdson deposed that he was responsible for the management and operations of the company. He gave evidence that when the Company proposed to enter into a lease of the Auburn premises, building works were required including a fitting out of the shop and that, as part of the proposed fitout, it was intended that refrigeration would be installed, for which the Company would require funding. The Company was incorporated on 6 August 2013 and Mr Derbas was its sole director until 4 October 2013. Mr Richerdson deposed that in October 2013 he proposed to Ms Jamal that she be the director of the Company, apparently, according to Ms Jamal, because she had a better credit rating. Mr Richerdson and Ms Jamal both gave evidence to the effect that Mr Richerdson told her that she would not need to do anything and that he would run the Company and take care of everything.

9. Mr Khaled Jamal was employed in about March 2014. It was common ground that he was employed by the Company and not by another company in the group for which he also worked. He was engaged to assist with fitout works for a proposed new store in Bondi Junction. He was injured in the course of that employment. Mr Richerdson deposed that it was agreed that he would be paid $1,156 gross per week for an agreed six week period (a total of $6,936).

10. There is no appeal from the primary judge’s finding that the Company was not an exempt employer as it did not have reasonable grounds to believe that the wages payable for the financial year ending 30 June 2014 would be less than $7,500 when account is taken of the definition of wages which includes any consideration in money’s worth. Moreover, a book that was said to have been kept that was said to record amounts of cash that employees took from the till was not produced.

11. Subsections 145(1) and (6) provide:

“(1)   The Nominal Insurer may serve on a person who, in the opinion of the Nominal Insurer, was—

(a) in respect of an injured worker to or in respect of whom a payment has been made by the Nominal Insurer in respect of a claim under this Division, an employer at the relevant time, or

(b) an insurer under this Act of such an employer,

notice requiring that person, within a period specified in the notice, to reimburse the Insurance Fund an amount (not being an amount exceeding the amount of the payment made) specified in the notice.

…

(6)   The Nominal Insurer may recover an amount specified in a notice served under subsection (1) (being a notice in respect of which an application has not been made under subsection (3)) from the person to whom the notice was given as a debt in a court of competent jurisdiction.”

12. Notice was given, or purportedly given, to the Company under s 145 on behalf of the Nominal Insurer on 25 August and 20 October 2016 (see [84] ff below).

13. The Company was insolvent and was deregistered on 22 January 2017. Section 145A(1) provides:

“145A Recovery from directors of corporations liable to reimburse Insurance Fund

(1)   If a corporation is liable to reimburse the Insurance Fund an amount for a payment made in respect of a claim under this Division and the amount is not recoverable from the corporation, the Nominal Insurer is entitled to recover the amount from a person who was a culpable director of the corporation at the relevant time.”

14. Pursuant to s 145A(4), Ms Jamal is a “culpable director” because the Company contravened s 155 and at the time of that contravention she was a director of the Company.

15. Section 145A(5) provides:

“(5)    A person is not a culpable director of a corporation if the person establishes that—

(a) the corporation contravened section 155 without the person’s knowledge, or

(b)   the person was not in a position to influence the conduct of the corporation in relation to that contravention, or

(c)   the person, being in such a position, used all due diligence to prevent the contravention by the corporation.”

16. At trial and on appeal, Ms Jamal relied on paragraphs (a) and (b) of subsection (5). The onus lay on her to establish that the contravention by the Company of s 155 was without her knowledge or that she was not in a position to influence the conduct of the Company in relation to that contravention.

17. Ms Jamal’s evidence in chief was given by an affidavit affirmed on 17 June 2021. In that affidavit she deposed that the convenience store was operated by her mother, along with other family members who would assist from time to time. She said she was never paid a wage or salary by the Company. She deposed that she did not recall signing any documents concerning her appointment as director and in particular did not recall executing a consent to act as a director. But her defence did not traverse the allegation of the Nominal Insurer that at all material times she was a director of the Company. Instead she pleaded that at no time did she perform or carry out the functions of a director of the Company. She gave evidence to that effect in her affidavit. She deposed that she was not aware that the Company employed any employees, including her cousin, Mr Khaled Jamal who was injured. She deposed that she was not aware that the Company was required to hold a workers compensation insurance policy, nor that it did not hold such a policy. She deposed that she did not receive any correspondence regarding the Company, including that sent by the Nominal Insurer.

18. Her evidence was corroborated by her brother, Mr Mark Richerdson. He deposed that the convenience store was run as a family business and those who helped out in it were not paid a salary or wage. He deposed that Ms Jamal did not have any involvement in the operations or management of the Company and that he was solely responsible for doing so.

19. However the primary judge did not accept either Ms Jamal or Mr Richerdson as a witness of truth. In respect of Ms Jamal, her Honour found:

“[38]    Ms Jamal’s evidence was unsatisfactory on every topic. I can have no confidence in her reliability as a witness. I do not accept her evidence other than where it is an admission against interest or otherwise corroborated by independent objective evidence. In particular, I do not accept her denials of knowledge about the circumstances of Mr Khaled Jamal’s injury and the problems arising because the company had no workers insurance policy at the time. I am satisfied that, as her statement of April 2015 confirms, she knew of these matters at the time of Mr Jamal’s accident and that she assisted her brother in his correspondence and dealings with Allianz and the plaintiff.”

20. In relation to Mr Richerdson her Honour found:

“[62]   Mr Richerdson was an unimpressive witness. I have no confidence in the reliability of any of his evidence unless it is an admission against interest or independently corroborated by reliable evidence.”

21. On the face of it, these findings would create a high bar to appellate intervention. In Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, Gleeson CJ, Gummow and Kirby JJ said (at [28] and [29]) that even where a trial judge’s conclusions appear to be or are said to be based on credibility findings, incontrovertible facts or uncontested testimony may demonstrate that the trial judge’s conclusions are erroneous and, in some rare cases, appellate intervention will be warranted if the trial judge’s decision is glaringly improbable or contrary to compelling influences. Their Honours also noted (at [31]):

“[31]   Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical.”

22. In Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 the principles were restated by Bell, Gageler, Nettle and Edelman JJ who said:

“[55]   A court of appeal is bound to conduct a ‘real review’ of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the trial judge has erred in fact or law.

Appellate restraint with respect to interference with a trial judge’s findings unless they are ‘glaringly improbable’ or ‘contrary to compelling inferences’ is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, ‘in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge’”. (Footnotes omitted)

23. The primary judge went on to say:

“[71]   In Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [31], the High Court noted the dangers of over-refinement of demeanour in the witness box as opposed to contemporary objective evidence. This warning is particularly appropriate for proceedings conducted by AVL during the pandemic. For these reasons, my assessment of the credit of Ms Jamal and Mr Richerdson is not based upon demeanour but upon the contents of their answers to questions in cross-examination and in particular from inconsistencies with their earlier statements, answers which I am satisfied were evasive, I also take into account their baseless denials of evidence that was clearly correct, such as where Ms Jamal was living and the nature and extent of contact between them and Ms Vincent.”

24. It may be accepted that where a trial judge in his or her reasons expressly disclaims a witness’ demeanour as contributing to his or her assessment of the witness’ credibility the bar to appellate intervention is lowered (White Constructions Pty Ltd v PBS Holdings Pty Ltd [2020] NSWCA 277 at [150] per Leeming JA). Nonetheless, as Gleeson CJ, Gummow and Kirby JJ said in Fox v Percy, where a judge reasons from contemporary materials, objectively established facts and the apparent logic of events and limits his or her reliance on the appearance of witnesses, this does not eliminate the established principles about witness credibility. Thus in the same paragraph [71] quoted above, the primary judge was satisfied from the contents of Ms Jamal’s and Mr Richerdson’s answers to questions in cross-examination and from inconsistencies with earlier statements, that they were evasive. It is difficult to think that the impressions that the witnesses gave the judge in the course of giving their evidence would not have played some part in that assessment, albeit it was not based on their demeanour.

No basis to disturb adverse credit findings

25. The “earlier statements” to which the primary judge referred were two statements given by Mr Richerdson, one on 17 March 2015 and the other on 1 April 2015, and one statement given by Ms Jamal on 1 April 2015. The statements were taken by a Mr Greg Lees, who was engaged by the WorkCover Authority of NSW to conduct an investigation as to whether the Company met the definition of an exempt employer. A claims officer with WorkCover Authority, Ms Cyndii Vincent, had earlier concluded it did.

26. Ms Jamal’s statement consisted of 16 paragraphs. In the last paragraph she said that the statement was “…a true account of my recollections in this matter”. In paragraph 13 she stated that “the information that I am providing below I have received from my brother Mark as I do not hold the records personally and I was not engaged in the day to day operation of the business which includes the hiring of Khaled”.

27. The information to which she referred was the date on which Mr Khaled Jamal commenced working, and the wages paid to him. In paragraph 15 she said:

“15.   I have been asked why as at 7 April 2014 did I believe that the total amount of wages payable by Al Mammoun & Co Pty Ltd during the 2013/2014 financial year would not be more than $7,500. I had no idea about that. I did not have the business experience.”

28. Ms Jamal had earlier stated that she referred to her brother and his documents for many of the answers to the questions put to her. Mr Lees noted that Mr Richerdson was present when Ms Jamal was interviewed.

29. In paragraphs 9 and 10 Ms Jamal stated:

“9.   I am aware that Khaled Jamal was injured while at work on 7 April 2014. Khaled Jamal is a relative. We did not have any workers compensation insurance at the time of Khaled's accident as we did not have any paid employees until he started with us.

10.    Al Maamoun and Co Pty Ltd has a Mediterranean grocery business at 91 Park St, Auburn NSW. The shop opens at 6am and closes at midnight, seven days per week. The following people regularly serve in the shop. They are Mark Richerdson, Abir Jamal, Maamoun Derbas and my other brother Adam Richardson. Maamoun Derbas is the main person that serves behind the counter. Maamoun generally works 7 days per week and he works all different hours. The shop pays his expenses. He would take the expenses out of the till and that money is recorded in a book kept in the shop. That book is given to the accountant. I cannot give a figure of how much that is. Maamoun is the main person that takes money from the business. Other persons will take money as needed for minor expenses if required and if possible and the family may take stock from the shop as food as required.”

30. The ASIC search for the Company stated that Ms Jamal was appointed a director on 4 October 2013 and ceased employment as a director on 22 January 2017 when the Company was deregistered. The company search disclosed that her address was 35 Byrnes Street, South Granville.

31. Ms Jamal initially denied ever having lived at 35 Byrnes Street, South Granville. She later changed that evidence and said that in 2013 or 2014 she had lived at that address but only for a period of three months. This was an example of responses to questions in cross-examination that the primary judge took into account in her assessment of Ms Jamal’s credibility.

32. On being questioned about her statement of 1 April 2015 Ms Jamal gave the following evidence:

“Q. Do you confirm that the contents of this document are true and correct?

A. To the best of my recollection, yes.

Q. So you were aware, weren’t you, that Khalid Jamal had been injured whilst he was working for the company on 7 April 2014?

A. Yes.

Q. You knew at that time that the company did not have any workers compensation insurance, didn’t you?

A. Yes I think so.

PRICE: Your Honour, Mr Bateman is endeavouring to say something but I--

HER HONOUR: Yes, Mr Bateman?

PRICE: --expect he's either on mute or--

HER HONOUR: Mr Bateman?

BATEMAN: Thank you. Thank you Mr Price. I just was - Mr Price referred to "at that time" and I just thought it’d be worth making clear to the witness whether "at that time" is the time of the statement or the time of the injury.

HER HONOUR: Well, Mr Price, it’s a matter for you whether you want to ask. We’ve got her answer but if you want to ask some more questions, Mr Price, that’s fine with me.

PRICE: It would be in fairness to the witness to address that.

Q. I suggest that it was around or shortly after 7 April 2014 that you were aware that Mr Jamal was injured at work. Is that correct?

A. Yes I was aware he was injured at work.

Q. I suggest to you that you were also aware at that time that the company didn’t have workers compensation insurance?

A. At the time the injury occurred, no.

Q. When you say "no", does that mean you were aware that the company didn’t have insurance or you were not aware that the company didn’t have insurance?

A. I was not aware of anything in regards to insurance at the time when he got his injury.

Q. When do you say that you became aware that the company didn’t have workers compensation insurance?

A. I’m not quite sure but it would’ve been a few months after the injury or a few weeks after the injury. I’m not really certain.”

33. In the questions preceding Ms Jamal’s being referred to her statement, counsel had not referred to the date of the statement. Ms Jamal’s answer “Yes, I think so” was an admission that she knew at the time of Mr Khaled Jamal’s injury that the Company did not have any workers compensation insurance. It was clear that that was how the primary judge understood her evidence (“We’ve got her answer”). When the question was repeated Ms Jamal’s evidence changed. Irrespective of her demeanour, this was a good reason for the primary judge not to accept her as a witness of credit.

34. Ms Jamal was challenged on her answer. The following exchange occurred.

“Q. I suggest to you that your assertion that you didn’t become aware of the lack of workers compensation insurance until weeks later is not true. What do you say to that?

A. I’m sorry I’m not sure.

HER HONOUR

Q. Well what do you mean by “I’m not sure”? Do you mean you’re not sure how to answer the question or do you mean you’re not sure whether it’s true or not?

A. I don’t understand what the question is.

Q. Well what’s being put to you is that when you said that you didn’t know that there was no workers compensation insurance at the time of the accident, that you’re telling a lie, that you did know. So do you agree or disagree?

A. I’m not quite - I really don’t remember.”

35. On being further questioned about her statement, it was put to her by counsel for the Nominal Insurer that the information before paragraph 13 in the statement came from her own knowledge and information. She responded “of what I knew was happening in the shop itself”. She also said that everything in paragraph 10 alone was what she had known at the time through Maamoud himself. She stated that she was “not quite sure” whether at the time of Mr Jamal’s injury, the company did not have workers compensation insurance but then said that she did not know that there was such a thing as workers compensation back then.

36. The inconsistency of Ms Jamal’s answers in cross-examination provided an ample basis for the primary judge not to be satisfied as to her credit without any reliance upon her demeanour.

37. In his statement of 17 March 2015, Mr Richerdson stated that the Company was established as a family business of which he was the operations manager. He stated that he founded the business on 14 August 2013 and paid for it “in the majority part”. He said that Ms Jamal and Mr Derbas also put in some money. He later stated that Ms Jamal “does not have any financial interest that I know of”. He stated that on the books the Company had four unpaid employees, the current people working being himself, Ms Jamal, Mr Derbas and a Mr Abir Jamal.

38. His statements that Ms Jamal had put in some money for the business was inconsistent with Ms Jamal’s affidavit in which she deposed that she never had any involvement in the business of the company.

39. In his oral evidence, Mr Richerdson denied that the company had four unpaid employees. He said he called them family members and said that there were no employees assisting in the store, only family members. He said that Mr Cox put the description of them as employees in his mouth and it was Mr Cox’s interpretation to call employees the persons whom Mr Richerdson had called family members. The primary judge was not obliged to accept that evidence which was inconsistent with the document that Mr Richerdson had signed. His denial was adverse to his credit.

40. As in the case of Ms Jamal, the primary judge was entitled to take an adverse view of Mr Richerdson’s credit based on his responses to questioning in cross-examination. For example, his evidence included the following:

“Q. Your evidence as I understand it is that none of the people who worked in the shop were paid cash wages or salary, is that correct?

A. Absolutely not.

Q. But despite that it was the practice of the company to allow the people working in the shop to take money from the till, that's correct, isn't it?

A. Well I think rephrase that please.

HER HONOUR

Q. No why can't you answer it; I direct you to answer. Despite that people working in the shop could take money from the till is that right or not?

A. That is only correct if they were taking out petty cash for stuff they purchased or stuff they'd done, they weren’t taking out money so that they could go out shopping for personal expenses is what I'm trying to say. So, yes it is true that to an extent if they were taking out petty cash for stuff that they bought for the shop but they weren’t taking out anything for their personal use.

PRICE

Q. I suggest to you that the practice was that they could take money for their personal use? That's correct isn't it?

A. That is incorrect.

Q. And not only could they take - I'm sorry I just cut across you, please finish? A. It's incorrect, they couldn't take money for personal use unless if I said so they were allowed but that was never the case, there was never money to take.

Q. Well which is it? Why do you say that if you said so but then you never said so?

A. They, they did not take money out of the till for personal use, that's the answer to the question.”

41. In paragraph 9 of Mr Richerdson’s statement of 1 April 2015 he made the same statement as appears in paragraph 10 of Ms Jamal’s statement, namely:

“9.    Maamoun Derbas is the main person that serves behind the counter at our 91 Park Rd store. Maamoun generally works 7 days per week and he works all different hours. The shop pays his expenses. He would take the expenses out of the till and that money is recorded in a book kept in the shop. That book is given to the accountant. I cannot give a figure of how much that is. Maamoun is the main person that takes money from the business. Other persons will take money as needed for minor expenses if required and if possible and the family may take stock from the shop as food as required.”

42. Mr Richerdson said that there was a book that recorded cash that was taken out of the till which would show the reasons why people took cash out. He said he thought “I possibly even have a copy of it”. He said “but if I get the book then I can tell you how much money was taken from the till by people who worked in the shop”. He said it would also record items of grocery or stock taken by people who worked in the shop. The book was never produced.

43. For these reasons, there is no basis to interfere with the primary judge’s adverse credit findings in relation to Mr Richerdson and Ms Jamal.

Other Factual Findings

44. Ms Jamal challenged other findings of fact made by the primary judge, but to the extent those challenges are successful, they do not provide a basis for overturning the primary judge’s adverse credit findings. Irrespective of those further challenges, Ms Jamal has not discharged the onus of proof.

45. The primary judge made further factual findings as follows:

“[73]   … I am comfortably satisfied that, contrary to her denials, Ms Jamal had considerable business expertise, arising not only from her performance of part-time work in an accountant’s office before Mr Jamal’s accident, but from her active participation, with her mother and brother, in the family business of setting up and running small grocery shops. I am satisfied that this included not only in her contributing funds to the business (as Mr Richerdson acknowledged in his first statement), but also assisting in the store from time to time. I am similarly satisfied that she was aware, from her own employment “off the books” for the accountant, that persons seeking to avoid tax or other liabilities could be paid in cash or in kind, and that the book kept in the store was to permit persons working in the store, including herself. I am also comfortably satisfied that, given the fact that this was a family business in which the defendant’s mother and brother were playing key roles and in which (according to Mr Richerdson’s evidence) she had made a financial contribution, Ms Jamal was not only actually aware of the absence of workers compensation insurance but also in a position to influence the conduct of the corporation in relation to this contravention of the legislation. Ms Jamal and her family were all in this together.

[74]   Further, I am comfortably satisfied that she was well aware that the hiring of an employee included obligations if that employee suffered an injury, namely the obligation to have insurance to respond to any claim by the worker for a work injury, and that she participated with her brother in the steps he took to attempt to make a claim through Allianz and claim to be an exempt company.

[75]    I am also satisfied that Ms Jamal, by reason of her ongoing discussions with her brother and mother, as well as visiting the premises regularly (and, it would appear, even living with them at one time), well knew that Mr Maamoun Derbas worked in the shop seven days a week from 6 am until midnight. Indeed, this is not seriously in question. Ms Jamal asks the court to accept that Mr Derbas worked either for no wages at all, or at least no more than $21.69 per week (this being the weekly salary for 6 months to arrive at a total of $694). Mr Price points out that the award wage for a shopkeeper in 2014 was $925 per week. Whether or not Ms Jamal knew what the award wage was (and I am prepared to assume she did not), I am satisfied that she knew about paying persons “off the books” from her own experience, and that she was well aware, from her position in the family as well as in the family business, that payments in kind in the form of cash and goods were taking place.

[76]   By reason of these factual findings, I am satisfied that Ms Jamal knew that the company should have had workers compensation insurance and that it was not an exempt company. I am satisfied that her brother knew this as well.

[77] I further note that I am satisfied that the company contravened s 155 of the Act in that Ms Jamal knew at the relevant times, as she effectively admitted in her statement, that the company did not have workers compensation insurance. Her explanation was that they did not have any such insurance “as we did not have any paid employees until he started with us” (CB: 269) is indicative of her having given consideration as to the company’s liability for employees. It is, however, an explanation I do not accept, as I am satisfied that Ms Jamal was well aware that Mr Derbas (and, for that matter, Ms Jamal herself, as well as her mother and brother) could take money from the till or items from the shop in lieu of a salary for the work that they were performing.

…

[128]    Ms Jamal was working part-time in an accountant’s office using computer software. She presented as an educated and informed person in terms of her dealings with Ms Vincent. I am satisfied that she not only knew the only difference between being paid “on the books” and “off the books” (namely that both are still payment for work) was the taxation implication, and that the response of herself and her brother, on the day of the accident, demonstrates that they were immediately aware that the risk they had taken by not having workers compensation insurance had come to fruition.” [1]

1. From paragraph 95 the paragraph numbering appearing on Caselaw differs from the paragraph numbering of the judgment as it appears in the Red Book due to a new paragraph number being given to a sentence in parentheses. I have used the paragraph numbering as it appears on Caselaw.

46. The grounds of appeal were as follows:

“1 The primary judge erred in finding (at [76], [120], [126]) that the corporation contravened s 155 of the Workers Compensation Act 1987 (NSW) (Act) with the appellant’s actual knowledge, for the purposes of s 145(5)(a) of the Act. Specifically, the primary judge:

a) erred in considering and attributing matters and circumstances of the appellant occurring at times after the relevant time to the consideration of the appellant’s knowledge under s 145A(5)(a) of the Act;

b) erred in attributing the knowledge or actions of persons other than the appellant to the consideration of the appellant’s knowledge under s 145A(5)(a) of the Act;

c)    erred in finding that the appellant took steps on the day of the worker’s injury or towards making a workers compensation claim to Allianz;

d)    erred in finding that the appellant had significant or considerable business experience.

2 The primary judge erred in finding (at [128]) that the appellant wilfully shut her eyes to the obvious in relation to the contravention by the corporation of s 155 of the Act.

3 The primary judge erred in finding (at [132]) that the appellant was in a position to influence the conduct of the corporation in relation to the contravention of s 155 of the Act by the corporation for the purposes of s 145(5)(b) of the Act.

4   In the alternative to Grounds 1, 2 and 3, the primary judge erred in finding (at [139]) that the amount recoverable from the appellant was $258,565.00 and not limited to $103,771.29.”

Ground 1

47. Ms Jamal submitted that the primary judge erred in finding that statements that Ms Jamal made in her statement of 1 April 2015 reflected her knowledge of matters at the time of or before Mr Jamal’s injury on 7 April 2014. She pointed out that Mr Richerdson was present when her statement was taken, that paragraph 9 of her statement is in identical terms to paragraph 15 of Mr Richerdson’s first statement, and that part of paragraph 10 of her statement is in identical terms of paragraph 9 of his second statement. She submitted that the judge ought to have concluded that her statement was based on things told to her at the time the statement was taken by Mr Richerdson and did not reflect her knowledge prior to Mr Jamal’s injury. She submitted that it was not open to the primary judge to find that her statement contained any confirmation or admission as to her knowledge at the time of Mr Jamal’s injury or during the period of the Company’s contravention of s 155 of the Act.

48. I do not agree. In her statement, Ms Jamal distinguished between the information she provided at paragraphs 14 and 15 which she had obtained from her brother, and the balance of the information in her statement. Moreover, in her cross-examination she initially admitted knowledge that workers compensation had not been taken out for Mr Jamal, although she resiled from that admission. But then she professed not to be able either to confirm or to deny her state of knowledge. The primary judge was entitled to treat paras 9 and 10 of her statement as admissions of her state of knowledge before Mr Jamal’s injury and to have regard to her admission in cross-examination referred to above at [32] - [34].

49. The critical finding in para [128] was that Ms Jamal’s response on the day of the accident demonstrated that she was then aware that a risk had been taken by not having workers compensation insurance. I accept Ms Jamal’s submission that this finding was erroneous. As the judge had previously found, it was Mr Richerdson, not Ms Jamal, who responded to news of the injury by attempting to obtain a policy of workers compensation insurance from an insurer known as Allianz. The primary judge made that finding at [8] where her Honour said: “On the day of the accident, Mr Richerdson contacted Allianz. It should be noted that Ms Jamal’s name was given by him as the relevant company officer”.

50. The primary judge did not err in her other findings in para [128] but they are not crucial in establishing Ms Jamal’s knowledge of the absence of workers compensation insurance (if the onus had lain on the Workers Compensation Nominal Insurer to demonstrate that she had such knowledge).

51. The primary judge made the following finding in relation to Ms Jamal’s contact with Ms Cyndii Vincent:

“[41] The manner in which Mr Richerdson and Ms Jamal conducted their correspondence with the Ms Vincent confirms that Ms Jamal was playing an active role. She was the person who lodged the notification (CB: 178) and she had a telephone conversation with Ms Vincent on 3 July 2014 about wage payment details and providing the information that the “entity had low wages in total for last FY” (CB: 178). Ms Jamal asked Ms Vincent to send emails to [email address] “for sending email to Melissa [i.e. Ms Jamal]”. This email address (with an additional “au” at the end) is in fact the one used on the Allianz form (CB: 112) where the notifier name is “Melissa Cody” and a phone number for her is provided. Although the admissibility of this record was restricted under s 136 of the Evidence Act 1995 (NSW) following challenge, I am satisfied, from Ms Vincent’s notes of her conversation with Ms Jamal, that she was provided with this contact email address and other relevant contact information by Ms Jamal herself. Although Mr Richerdsen and Ms Jamal both told Ms Vincent that Ms Jamal knew nothing about company matters (see the diary entries at CB 164 – 166), I am satisfied that this was not the case.”

52. As noted at [23] above, the primary judge found at [71] that Ms Jamal’s denial of evidence as to the nature and extent of her contact with Ms Vincent was a ground for rejecting her credit. Ms Vincent was a case officer with the WorkCover Authority. She made a file note on 3 July 2014 as follows:

“EMPLOYER: pc to Mark Richerdson on [telephone number]. Not in at present. CO asked to speak with Melissa Cody (noted as person lodging notification). Melissa advised the following: Can get back to CO with details of wages paid to IW, currently using the system for something that she can [scil. can’t] get out of. The entity had low wages in total for last FY (ending 30 June 2014). Co obtained email [email address] for sending email to Melissa to formerly request:- payslips for duration of IW employment or where employment more than 52 weeks, the 52 weeks prior to injury-Total wages paid by entity for the financial year ending on 30 June 2014. Cyndii Vincent CO”

53. As was submitted for Ms Jamal, Ms Vincent’s reference to the 3 July file note was a reference to the notifier’s name and contact details as those details appeared in a file kept by Allianz. The conduct of Mr Jamal’s claim was taken over by the WorkCover Authority after a claim had been made on Allianz but had been declined on the basis that the policy had been taken out after the injury had occurred. As the judge found, it was Mr Richerdson who contacted Allianz and provided Ms Jamal’s name as the relevant company officer. Nonetheless, the primary judge did not err at [41] in finding it was not the case that Ms Jamal knew nothing about company matters. Her advice to Ms Vincent as recorded in Ms Vincent’s file note was that she was currently using the Company’s system for something she could not get out of and that the company had low wages in total for the financial year ended 30 June 2014. That was inconsistent with Ms Jamal’s evidence as to her lack of involvement with the company’s business.

54. Ms Jamal challenged a finding of the primary judge at [36] that Ms Jamal was providing information and assistance to Ms Vincent and others on a regular basis. Again, that challenge may be accepted. The evidence established only one telephone conversation with Ms Vincent being the telephone conversation on 3 July 2014 initiated by Ms Vincent, which was followed up by an email sent to the email address recorded in the file note.

55. Ms Jamal also submitted that the primary judge erred in finding (at [73]) that she had considerable business expertise. She submitted that whilst the evidence would have entitled the primary judge to conclude that she had some business skills and experience, it was not open to the primary judge to find that she had considerable business expertise.

56. The distinction between some business skills and experience, and considerable business expertise is immaterial to the judge’s finding (at [76]) that she was satisfied that Ms Jamal knew that the company should have had workers compensation insurance and that it was not an exempt company.

57. As counsel for Ms Jamal correctly accepted, it would not have been sufficient for Ms Jamal in order to make out her defence under s 145A(5)(a) or (b) to prove that she was unaware of the obligation to obtain workers compensation insurance. What was essential under s 145A(5)(a) was that she did not have knowledge of the facts that gave rise to the contravention of s 155 (Johnson v Youden [1950] 1 KB 544 at 546).

58. To establish the exculpatory ground under s 145A(5)(a) it was incumbent on Ms Jamal to be believed in saying either “I did not know that the Company had not taken out a workers compensation insurance policy” or “I did not know that the Company did not have reasonable grounds for believing that the wages bill would be less than $7,500”. The latter ground would be tantamount to saying that I did not know that the wages bill would be not less than $7,500 and I did not know that Mr Richerdson believed otherwise.

59. Her evidence was, in effect, that she never considered either matter but she was not believed. The primary judge did not err in any material respect in rejecting Ms Jamal’s and Mr Richerdson’s evidence.

60. For these reasons I would reject ground 1 of the notice of appeal.

Notice of Contention

61. By notice of contention, the Workers Compensation Nominal Insurer submitted that actual knowledge was not required for the purposes of s 145A(5)(a) and that the appellant had “knowledge” of the Company’s contravention of s 155 such that she was not excluded from being a culpable director under s 145A(5)(a). The Nominal Insurer submitted that it was enough that she have what was called “constructive knowledge” of the company’s contravention.

62. The primary judge rejected that contention, preferring the reasoning of Taylor SC DCJ in Workers Compensation Nominal Insurer v Brasnovic [2013] NSWDC 131 to the decision of Letherbarrow SC DCJ in WorkCover Authority of New South Wales v Edwin Tucker and George MacDonald [2012] NSWDC 226 as to what was meant by “knowledge” in section 145A(5)(a) (at [103]).

63. Her Honour did not err in so concluding. Section 145A makes a culpable director liable as an accessory for the company’s contravention of s 155.

64. In the criminal law, to establish an offence of aiding, abetting, counselling or procuring the commission of the principal offence, it must be shown that the alleged accessory has actual knowledge of the facts which establish the principal offence (Giorgianni v The Queen (1985) 156 CLR 473; [1985] HCA 29). In Giorgianni v The Queen, Gibbs CJ said (at 487) that connivance or wilful blindness virtually amounts to knowledge and is treated as the equivalent to knowledge. His Honour referred to wilful blindness in the sense of a person deliberately shutting his eyes for fear of learning facts which he or she would rather not know. Mason J reached the same conclusion (at 495). But the plurality (Wilson, Deane and Dawson JJ at 507-508) said:

“The fact of exposure to the obvious may warrant the inference of knowledge. The shutting of one's eyes to the obvious is not, however, an alternative to the actual knowledge which is required as the basis of intent to aid, abet, counsel or procure. Lord Goddard appears to have recognized this by concluding his judgment (Davies, Turner & Co Ltd v Brodie [1954] 1 WLR 1364 at 1368) with the words: ‘... that is the point: you must know the essential matters which constitute the offence’. The Court of Criminal Appeal in Reg. v. Glennan also referred in its judgment to Poultry World Ltd. v. Conder (65) and Bateman v. Evans (66). In the report of Poultry World Ltd. v. Condor, a Divisional Court is said to have decided that a person could not be convicted of aiding and abetting unless he had knowledge of the facts which constitute the offence or unless he deliberately abstained from obtaining such knowledge. In the commentary upon the decision, however, it is made clear that the court took the view that the offence of aiding and abetting could not be established unless there was proof of knowledge or ‘... such negligence as to amount to deliberate shutting of the eyes, i.e. connivance’. Connivance can, of course, only be established on the basis of knowledge, whether proved directly or by inference.”

65. In Pereira v Director of Public Prosecutions (1988) 63 ALJR 1 at 3; [1988] HCA 57, the High Court held that where actual knowledge is either a specified element of the offence charged or a necessary element of the guilty mind required for the offence, it is never the case that something less than knowledge may be treated as satisfying the requirement of actual knowledge (at 3).

66. Likewise, in Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 the High Court held that a person liable under s 75B of the Trade Practices Act 1975 (Cth) as one who had aided, abetted, counselled or procured the contravention by the principal contravenor of s 52 of the Trade Practices Act or induced the contravention or was directly or indirectly knowingly concerned in or party to the contravention, or who had conspired with others to effect the contravention, was only liable as an accessory if the person had knowledge of the essential facts that established the contravention. It was noted that the derivation of s 75B was found in the criminal law.

67. Section 145A does not invoke the language of the criminal law. Rather, s 145A(1) and (4) imposes a liability on a culpable director at the relevant time to reimburse the Insurance Fund for the amount of any payment made under a claim under Div 6 of Pt 4 where the company was uninsured. It then reverses the onus of proof so as to exculpate a director who establishes that the company contravened s 155 without his or her knowledge. In those circumstances I see no reason to read “knowledge” as anything less than actual knowledge.

68. Constructive knowledge by wilfully shutting one’s eyes to the obvious, wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make, or having knowledge of circumstances which would indicate the facts to an honest and reasonable man, is sufficient to establish accessorial liability in equity for a person who assists a fiduciary in breaching his or her fiduciary duty. The accessory is treated as being sufficiently culpable to be held liable for the consequence of the fiduciary’s breach. But that is not a reason to construe “knowledge” where used in s 145A(5)(a) as meaning anything other than actual knowledge.

69. In Giorgianni v The Queen, the plurality did not accept that wilful blindness was the equivalent of knowledge, as distinct from its being a matter from which actual knowledge can readily be inferred. I do not consider that the primary judge erred in concluding that “knowledge” in s 145A(5)(a) refers to actual knowledge of the director.

Ground 2

70. The primary judge found that if she had erred in her finding as to actual knowledge, then she would accept that Ms Jamal was shutting her eyes to the obvious.

71. Because ground 1 fails, this ground also necessarily fails. But the primary judge was entitled to find that Ms Jamal shut her eyes to the obvious and to have inferred from that that she actually knew of the facts that established the contravention of s 155(1).

Ground 3

72. Ground 3 challenges the primary judge’s finding said to be a finding that the appellant was in a position to influence the conduct of the corporation in relation to the contravention of s 155. The primary judge’s finding was as follows:

“[133]    Ms Jamal has failed to demonstrate that she was not in a position to influence the corporation. No submission was made to the effect that if she were in a position to influence the company, she had used all due diligence to prevent it contravening its obligation.”

73. In other words, this finding depended upon Ms Jamal’s not having discharged the onus of proof.

74. I would have thought that Ms Jamal could not establish that she was not “in a position to influence the conduct of the corporation in relation to [the] contravention” because she was the sole director of the Company. She was in a position to influence the conduct of its affairs by reason of her authority as sole director to manage the affairs of the Company. The fact that on her evidence she left the conduct of the affairs of the Company to Mr Richerdson did not mean that she was not in a position to influence the conduct of the Company’s affairs. She could have removed him as manager.

75. In Chevalley v Industrial Court of New South Wales (2011) 82 NSWLR 634; [2011] NSWCA 357 this Court held in relation to a similarly worded provision in s 26(1)(a) of the Occupational Health and Safety Act 2000 (NSW) that whether a director is in a position to influence the corporation’s conduct in relation to a contravention of legislation is a question of fact in each case which may depend upon the particular position held, the allocation of responsibilities within the company between directors, managers and other employees, and the ability of the director in the circumstances in which he or she finds himself or herself, to take steps to influence the company’s conduct. As Bathurst CJ said (at [29]-[30]):

“[29]    …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.

[30]   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. ”

76. In the case of Ms Jamal who was the sole director of a company whose business consisted of operating a grocery store in Auburn and opening a new grocery store in Bondi Junction, I find it difficult to see how she could not be in a position to influence its decision to take out or not to take out a policy of workers compensation insurance. The fact that Mr Richerdson managed the company’s affairs did not mean that Ms Jamal was not in a position to influence the conduct of the company in relation to its taking out a policy of workers compensation insurance. As the primary judge observed (at [131]) an assertion that Ms Jamal was not managing the Company is very different from her not being in a position to influence the Company.

77. However, the Nominal Insurer eschewed reliance on this argument. Its counsel said that it had not been the respondent’s case that Ms Jamal was in a position to influence the corporation simply because she was registered as the director, which I take it includes that it was not the respondent’s case that she was in a position to influence the company in relation to its failure to take out a policy of workers compensation insurance simply by reason of her appointment as a director.

78. The appeal on this ground must be dealt with on the basis of this concession.

79. The primary judge found at [73] (quoted at [45] above) that Ms Jamal was in a position to influence the conduct of the Company in relation to the contravention because she and her family “were all in this together”. Her Honour also found:

[130]   Critical to Ms Jamal’s defence is that she was not in a position to influence the conduct of the company, which was in fact being managed by her brother, and for which she was a mere cipher (defendant’s written submissions, 12 November 2021, paragraphs 75 – 82). Mr Bateman points to three areas of the evidence to support this:

(a)   It was Mr Richerdson, not Ms Jamal, who employed their cousin Mr Khaled Jamal as a worker.

(b)   Family members working in the business, including Ms Jamal, could not take any money from the till or goods without Mr Richerdson’s permission.

(c)   Mr Richerdson claimed he was the person who dealt with the company’s insurance broker (to whom he referred as “my broker” (T 57, line 10), whereas Ms Jamal was not even aware that there was such a thing as “workers comp” (T 57, T 84).

[131]   Mr Price submits that the evidence pointed to the defendant’s relationship with Mr Richerdson not only as enabling her to give direction to him, but that she did in fact carry out a number of company tasks, including dealing with Ms Vincent. The nature of the agreement between them, at best, was that he would perform her obligations and that if she became aware of anything, she could direct him to carry it out. At its highest, this is an assertion that Ms Jamal was not managing the company, which is very different from not being in a position to influence the company. There is no suggestion that her brother ignored or insulted her, or failed to refer relevant matters to her when necessary; to the contrary, he included her in discussions about the workers compensation issues from the day of the accident.”

80. Ms Jamal submitted that the primary judge erred in finding that the fact that Mr Richerdson included Ms Jamal in discussions about workers compensation issues from the day of the accident, and that she carried out a number of company tasks including dealing with Ms Vincent, demonstrated that she was in a position to influence the company in relation to its contravention of s 155. I agree, but it does not follow that Ms Jamal discharged the onus that lay on her to prove that she was not in a position to influence the company in relation to its failure to take out a policy of workers compensation insurance. Ms Jamal submitted that the primary judge failed to consider or give sufficient weight to the distribution of duties between Mr Richerdson and her in relation to the contravention. Counsel referred in particular to the fact that the Company was founded and operated by Mr Richerdson, that he was a director of approximately 10 other companies and had extensive experience in the retail grocery industry, whereas Ms Jamal was only appointed as a director because she had a better credit rating than the former director, that she had never run a business, that she was not paid for any contribution she made to the company’s business, and was unemployed at the time she became a director and on unemployment benefits.

81. But these submissions assume the acceptance of Ms Jamal’s and Mr Richerdson’s evidence, whereas the primary judge found that their evidence should not be accepted unless it was an admission against interest or independently corroborated by reliable evidence. There was no independent corroboration of the matters on which Ms Jamal relied for this submission.

82. Before the primary judge, the Nominal Insurer relied upon the onus of proof and also on evidence given by Ms Jamal in cross-examination that if she were approached by anyone about the company, she would refer them to Mr Richerdson or Mr Derbas and would tell them that they needed to deal with the inquiry. The Nominal Insurer also relied on evidence given by Mr Richerdson in cross-examination. He was asked (without objection) whether, if Ms Jamal became aware of company issues because of her role as a director, then she would have contacted Mr Richerdson to address the issues. Mr Richerdson agreed. He was then asked:

“Q. If it was an issue that she was not able to deal with then she would ask and direct you to deal with it, wouldn’t she?

A. There was never an issue that she could do within her own capacity. All, any issues were all directed to me. She never dealt with any issues in her own capacity without my permissions.”

83. This last answer was not evidence against interest and was not accepted. The cross-examination relied on by the Nominal Insurer does not establish an affirmative case that Ms Jamal was in a position to influence the company in relation to its contravention of s 155. Nonetheless the primary judge did not err in concluding that Ms Jamal had not discharged the onus to establish that she was not in a position to influence the company in relation to its contravention.

Ground 4

84. Ms Jamal submitted that she was not liable for the whole of the amount claimed. Ground 4 of appeal is that the primary judge erred in finding that the amount recoverable from Ms Jamal was $258,565.00 and not $103,771.29. The only amount recoverable and hence the amount for which Ms Jamal could be liable if she were a culpable director, is the amount “specified in a notice served under subsection [145(1)]” (section 145(6)). Two notices were served on Ms Jamal under s 145(1), or purportedly under that section.

85. First, on 25 August 2015 the WorkCover Authority of NSW on behalf of the Nominal Insurer gave notice under that provision requiring reimbursement by the Company of “the amount specified in Schedule B”. The amount specified in Schedule B was $103,771.29.

86. Secondly, on 20 October 2016 Insurance and Care NSW on behalf of the Nominal Insurer gave notice requiring reimbursement by the Company of “the amount specified in Schedule B”. There was no document headed “Schedule B”. However, the covering letter to the notice states “AMOUNT: $258,565.75”, as does the s 145(5) certificate. The document that follows listed the compensation payments made but is not headed ”Schedule B”.

87. In both notices, WorkCover (in the first notice) and Insurance and Care NSW (in the second) respectively stated that the Company was, in the opinion of the Nominal Insurer, the employer of the worker in respect of whom a claim for compensation had been made, the particulars of which were specified in Schedule A of the relevant notice. The notices stated that if the Company disputed the notice, it had 28 days from the date of service to file an application for review with the Workers Compensation Commission.

88. Ms Jamal submits that:

“The notice issued on 20 October 2016 was defective and did not “pick up” (as submitted by the respondent in the court below (Black 21:2)) the amount identified in the s 145(5) certificate.”

89. Section 145(5) states:

“(5) In any proceedings under subsection (4), a certificate executed by the Nominal Insurer and certifying that—

(a)  the payments specified in the certificate were paid to or in respect of an injured worker named in the certificate, and

(b)  a person named in the certificate was, in the opinion of the Nominal Insurer, liable at the relevant time to pay to or in respect of the injured worker compensation under this Act or work injury damages,

is (without proof of its execution by the Nominal Insurer) admissible in evidence in any proceedings and is evidence of the matters stated in the certificate.”

90. Section 145 does not require the notice under s 145(1) to be in a specific form. The notice may therefore be taken to include the covering letter, the s 145(5) certificate, and the document listing the compensation payments made, all of which specified the relevant amount.

91. The Nominal Insurer was therefore entitled to recover the amount of $258,565.65. As a result, Ground 4 is rejected.

Conclusion and orders

92. For these reasons, I would reject each of the grounds of appeal. I propose that the appeal be dismissed with costs.

93. MITCHELMORE JA: I agree with White JA.

**********

Endnote

Amendments

03 February 2023 - Minor amendment to punctuation on coversheet

Decision last updated: 03 February 2023