Kirwin v The Pilbara Infrastructure Pty Ltd
[2012] WASC 99
•23 MARCH 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CRIMINAL
CITATION: KIRWIN -v- THE PILBARA INFRASTRUCTURE PTY LTD [2012] WASC 99
CORAM: HALL J
HEARD: 17 - 21 OCTOBER 2011
DELIVERED : 23 MARCH 2012
FILE NO/S: SJA 1030 of 2011
BETWEEN: CHRISTOPHER KIRWIN
Appellant
AND
THE PILBARA INFRASTRUCTURE PTY LTD
Respondent
FILE NO/S :SJA 1031 of 2011
BETWEEN :CHRISTOPHER KIRWIN
Appellant
AND
FORTESCUE METALS GROUP PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram :MAGISTRATE G MIGNACCA-RANDAZZO
Citation :PE 50531 to 50547 of 2008 and PE 50575 of 2008
Catchwords:
Occupational health and safety - Duties of employers and principals - Duty to do all that is 'reasonably practicable' - Whether deemed employer breached duty - Whether reliance on expertise of others was sufficient discharge of duty - Accommodation not built to withstand cyclone
Legislation:
Occupational Safety and Health Act 1984 (WA), s 3, s 3A, s 5, s 19(1), s 19A, s 23D, s 23G(2), s 23H(2)
Result:
Leave to appeal granted
Appeal dismissed
Category: B
Representation:
SJA 1030 of 2011
Counsel:
Appellant: Mr B P King & Ms K A T Pedersen
Respondent: Mr J H Karkar QC, Mr R J Price & Mr R PintosLopez
Solicitors:
Appellant: State Solicitor for Western Australia
Respondent: DLA Piper Australia
SJA 1031 of 2011
Counsel:
Appellant: Mr B P King & Ms K A T Pedersen
Respondent: Mr J H Karkar QC, Mr R J Price & Mr R PintosLopez
Solicitors:
Appellant: State Solicitor for Western Australia
Respondent: DLA Piper Australia
Case(s) referred to in judgment(s):
Chugg v Pacific Dunlop Ltd [1990] HCA 41; (1990) 170 CLR 249
Complete Scaffold Services Pty Ltd v Adelaide Brighton Cement Ltd [2001] SASC 199
Hamersley Iron Pty Ltd v Robertson (Unreported, WASC, Library No 980573, 2 October 1998)
Interstruct Pty Ltd v Wakelam (1990) 3 WAR 100
Laing O'Rourke (BMC) Pty Ltd v Kirwin [2011] WASCA 117
Morrison v De Bono [2005] WASC 271
R v Associated Octel Co Ltd [1994] 4 All ER 1051
Reilly v Devcon Australia Pty Ltd [2007] WASC 106
Reilly v Devcon Australia Pty Ltd [2008] WASCA 84; (2008) 36 WAR 492
Silent Vector Pty Ltd v Shepherd [2003] WASCA 315
Tobiassen v Reilly [2009] WASCA 26; (2009) 178 IR 213
Wylie v South Metropolitan College of TAFE [2003] WASCA 34
HALL J:
Introduction
In the early hours of 9 March 2007 severe tropical cyclone George hit a railway camp in the East Pilbara, south of Port Hedland. The estimated wind gusts were 47 to 50 m per second. Workers at the camp took shelter in the pre‑fabricated accommodation buildings, known as dongas.
The winds caused some of the dongas to lift and pull away from their footings. Some dongas collided with each other and others flipped over. As a consequence, a number of the workers were injured, including some fatally.
An investigation after the event revealed that the dongas and the means by which they were anchored to the ground did not meet relevant standards. In particular, the welding done on parts of the tie‑downs was defective. Nor were the dongas designed and built to withstand winds specified in design standards for that region.
One of the respondents had engaged contractors to build the camp. Originally, another independent company had also been retained to project manage the building of the camp, however that company had been unable to arrange a suitable contractor. A builder had then been engaged directly.
The respondents had also engaged contractors who employed the injured or killed workers. The respondents had mandated safety procedures that stipulated that in the event of a cyclone the workers were to take shelter in the dongas. The necessary implication was that the dongas would provide a safe refuge, or at least one that was as safe as it was reasonably possible to provide.
The respondents were charged with offences under the Occupational Safety and Health Act 1984 (WA) (the Act) with failing, so far as was practicable, to provide and maintain a working environment, adequate safety procedures and residential premises for workers that did not expose them to hazards. In respect of these failures, the essential allegation was the same: that the respondents had failed to ensure that the dongas were designed to withstand cyclonic winds of a relevant prescribed intensity for the region in which the camp was located.
The respondents entered pleas of not guilty to these charges and the matter proceeded to trial in the Magistrates Court. A number of preliminary points were raised by the respondents, including an argument that they had been charged under the wrong statute. These arguments were rejected by the magistrate.
At the trial, the respondents argued that they had no expertise in the designing and building of work camps. Accordingly, they had contracted others to do the work and had relied upon the contractors to meet the necessary standards. The respondents submitted that in all the circumstances, in particular taking into account both the expertise of those who were contracted to do the work and that the camp was built in accordance with planning approval from the relevant shire authority, they had acted reasonably. Specifically, the respondents argued that in retaining experts who had skills and experience in building camps of this nature, they had done all that it was reasonably practicable for them to do to ensure that the dongas were a safe refuge for workers from the hazards of cyclones.
The magistrate was not satisfied beyond reasonable doubt that the respondents had failed to do all that they reasonably could to protect workers from hazards and dismissed the charges. The prosecution now seeks to appeal against those dismissals.
The appellant asserts that the magistrate was wrong to conclude that the respondents had reasonably relied on the expertise of others. In essence, the appellant says that the builder was contracted on the basis that the camp was within a certain cyclone risk zone, but that the builder did not undertake any responsibility for ensuring that this design parameter was correct. In these circumstances the respondents, it is said, could not have reasonably relied on the builder to ensure that this aspect of the design met appropriate standards. Accordingly, it is said that the respondents failed to ensure that the dongas were properly designed for cyclone tolerance.
The respondents argue that the builder undertook responsibility for design of the camp. This is said to be reflected in the contractual documents and in the work that the builder did and the work that the builder subcontracted to others. Furthermore, it is said that the builder held itself out as being experienced in regards to the building of camps of this nature. It is said that it was reasonable and sufficient for the respondents to rely upon the builder and on others, in particular the company that had prepared the original tender documents and the engineering firm that was engaged to oversee the work.
The respondents submit that the magistrate was correct to dismiss the charges. However, in the event that the magistrate was in error, the respondents say that the charges should nonetheless have been dismissed for the other reasons that were raised as preliminary arguments in the Magistrates Court. Those arguments were raised again on this appeal by way of a notice of contention. Whether it is necessary to deal with the matters raised in the notice of contention depends upon the outcome of the appellant's grounds of appeal.
For the reasons that follow, whilst leave in respect of each of the grounds should be granted, none of them succeed. Accordingly, the appeal must be dismissed. It is unnecessary to address the notice of contention.
Background
On the hearing of this appeal the factual circumstances were largely not in dispute. The area of dispute is principally confined to whether an inference can be drawn that the respondent companies retained a responsibility for design of the residential buildings at the railway camp. In order to understand this area of dispute, it will be necessary to set out the surrounding factual circumstances in some detail.
The Cloudbreak mine is situated approximately 250 km from the coast inland from Port Hedland. The mine is on mining tenements owned by Fortescue Metals Group Ltd (FMG) or its subsidiaries. The Pilbara Infrastructure Pty Ltd (TPI) is a wholly owned subsidiary of FMG and was the contracting entity for FMG in respect of the building of infrastructure. FMG is the respondent in SJA 1031 of 2011. TPI is the respondent in SJA 1030 of 2011.
The distance of the mine from the coast necessitated the building of infrastructure to carry iron ore from the mine to the port at Port Hedland. That infrastructure included port facilities and a railway from the mine to the port. It also included accommodation camps for the workers who would build the railway.
The request for tender
On 18 November 2005, FMG entered into a memorandum of understanding with Spotless Services Australia Ltd (Spotless). Spotless was to provide project management services for the delivery of the accommodation camps. One of those camps was known as Rail Village 1 (RV1). RV1 was to be built approximately 100 km from the coast along the proposed route of the railway line. It was intended that the accommodation buildings at RV1 would also be capable of serving the purpose of sheltering and protecting workers in the event of a cyclone.
Spotless established a project team which included a project manager, a construction manager, a quality assurance and an occupational health and safety manager. The team received support from subcontractors, including consultant architects and engineers.
Spotless drafted specifications for the proposed camps and prepared a request for tender (RFT) (exhibit 4(h)) dated 1 December 2005. The RFT was a 102 page document that was made available to businesses that wished to tender for the work of building the accommodation camps. It referred to four camps and, in regard to RV1, it stated that the camp was to be located approximately 100 km from Port Hedland.
At Section C cl 6.0, the RFT stated that the tenderer was to become acquainted with the nature of the project. It also stated that the tenderer was required to inspect the site and to take into account local conditions, including any restrictions on use of the site.
At Section C cl 25.0, the RFT stated that by lodging a tender a tenderer would warrant that, amongst other things, it has relied on its own inquiries and not on the 'Tender Documents'. The 'Tender Documents' were defined as being the RFT and all documents annexed to it.
At Section D cl 2.0, the scope of works was stated as including 'the design, fabrication, manufacture, supply, installation and provision of services for each camp'.
At Section D cl 2.3, the RFT stated:
Detailed Design
Detailed design shall include and be conducive to a cleared level accessible site:
•The detailed design shall conform with the law, the Specification, By-Laws and Requirements and relevant Australian Standards including the Building Code Of Australia;
•Preparation and submission to the Project Manager for approval all detailed design, design calculations, layout and detail drawings, shop and manufacturer's drawings (fully detailing all works), and 'as built' drawings upon completion;
At Section D cl 3.2.1, the RFT stated:
Australian Standards
The buildings shall comply with all relevant Australian Standards and Codes and satisfy the requirements of all Statutory Authorities including:
•Building Code of Australia (compliance to BCA class 1B building);
•AS1170 Structural Actions;
At Section D cl 4.3.5, the RFT stated:
Design Wind Loads.
All buildings shall be designed, constructed and installed for wind loads in accordance with the Building Code of Australia and the relevant Australian Standards. The port accommodation facility location is within region D - TC2 and all other locations are region A - TC2, design wind speeds shall be in accordance with Australian Standards.
Adequately designed tie-downs shall be provided to all buildings at the accommodation facility.
The contractor shall advise the building designed wind loadings for any used buildings proposed to be supplied.
The reference to wind regions A and D was to the regions stipulated in the relevant Australian Standards. One of those standards was Australian Standard AS/NZS 1170.2.2002 (exhibit 6.13). That standard provides for four discrete wind regions in the Pilbara. These regions are determined by distance from the coast. In general terms the closer a region is to the coast, the more frequent and severe cyclonic winds are likely to be. Region D is within 50 km of the coast, region C is between 50 and 100 km from the coast, region B is between 100 and 150 km from the coast and region A is greater than 150 km from the coast. A table then provides for the wind speeds that must be allowed for when constructing buildings in each particular region. The way in which such speeds are incorporated into a design is provided for by a number of mathematical formulae which are set out in the standard.
The reference to all camps other than the port camp being in wind region A is anomalous given that that region commences 150 km from the coastline and that RV1 was always intended to be approximately 100 km from the coast. There was an earlier standard, AS/NZS 1170.2.1989, which did stipulate a region A that was greater than 100 km from the coast, and this may account for the reference in the RFT. In any event, it was common ground that the RFT was wrong as to the applicable wind region for RV1, whichever standard was referred to. This was because the precise location of the camp was less than 100 km from the coast.
The final locations for the camps, including RV1, were determined following site inspections in January 2006. The actual location of RV1 was to be approximately 90 km from the smoothed coastline. This location was in wind region C under AS/NZS 1170.2.2002, rather than in wind region A as was stated in the RFT. This should have had an impact on the design criteria for the accommodation units.
The RFT contained a disclaimer on page 2. That disclaimer reads as follows:
The Project Manager has prepared this document and the Tender Information to give Tenderers background information on the Project. Neither the Project Manager, FMG nor any of their respective officers, employees, agents or advisers (parties) gives any warranty, or makes any representations, express or implied, as to the completeness or accuracy of either the information contained in this document or any information which may be provided (for or on behalf of any of the parties) and is related in any way to the Project. Each of the parties expressly disclaims any liability relating to or resulting from the use of such information by any Tenderer or other third party or any of their respective affiliates or representatives.
FMG and the Project Manager accept no responsibility for any conclusions drawn by Tenderers or Contractors from the data given. Each Tenderer is required to confirm in writing, in terms contained in Attachment 3, that it has not relied upon the information referred to above and acknowledges the terms and operation of this disclaimer.
Other provisions of the RFT made it clear that any successful tenderer would be responsible for ensuring that the camps were designed and built competently and in accordance with all relevant standards. In particular, part E of the RFT set out a risk allocation matrix. Clause 12 of pt E provided that the design work must be carried out with all the skill and care to be expected of appropriately qualified and experienced professional designers and engineers with experience in carrying out works of a similar type, nature and complexity. The successful tenderer was to be fully responsible for all of the pre‑contract design work whether or not it was personally carried out by them. The design review and completion procedures were to include the submission of design documentation to Spotless for its review. However, full design responsibility was to at all times rest with the successful tenderer.
The apparent effect of the disclaimer in the RFT was to require tenderers to ensure that the information on which any tender was based was correct. Assuming that this extended to design specifications it required tenderers to determine the relevant wind resistance design requirements for the location in which RV1 was to be built, rather than simply by relying on those referred to in cl 4.3.5 of the RFT.
It was clearly contemplated that Spotless would review designs submitted by tenderers. In this regard the fact that Spotless had personnel with experience in the building of residential work camps was no doubt relevant to the role it was to play. This is borne out by the fact that whilst drafts of the tender specifications were provided by Spotless to FMG employees, the evidence of those employees was that they had no understanding of the significance of the wind regions specified in cl 4.3.5 and relied upon Spotless to ensure that those details were correct.
NT Link - proposals
The closing date for the submission of tenders was 28 February 2006. The tenders received by Spotless were not acceptable to FMG. Following a review of the unsuccessful tenders it was decided that an approach would be made to Spunbrood Pty Ltd trading as NT Link; this was a company that had built similar work camps in the Northern Territory. NT Link was provided with a copy of the RFT and used it to submit a proposal for the supply and installation of two of the proposed camps, including RV1.
In a letter dated 21 April 2006 (exhibit 52) Mr Tony Smith, the managing director of Spunbrood Pty Ltd, submitted the proposal of NT Link to Spotless. In that letter Mr Smith stated that NT Link's pricing assumed that
[a]ll installations will be carried out by qualified tradespersons and subcontractors to all Australian Standards.
The attached proposal included references to RV1 being in region A. In particular, under the heading 'Tie‑downs' the proposal stated:
We have allowed for engineered tie‑downs, region A-TC2 for all units - complexes over three buildings will only have tie-downs to the exterior of the units.
A list of subcontractors included in the proposal referred to a Darwin based firm of engineers in respect of 'tie‑downs, footings, veranda, [and] design engineering'. In evidence at the trial Mr Smith conceded that he intended to convey that a firm of engineers would be consulted regarding tie‑downs and footings for the dongas to be built at RV1.
NT Link submitted a revised proposal in relation to RV1 on 18 May 2006 (exhibit 53). In the covering letter the reference to compliance with Australian Standards was in different terms than in the first proposal. The relevant portion of the letter reads as follows:
Please note all installations will be carried out by qualified tradespersons and subcontractors to all Australian Standards. NT Link will install all units to meet with MSIA/R1 Regulations. Camp design has been carried out by Spotless, we have assumed that their design meets all regulations. (emphasis added)
The revised proposal again referred to engineered tie-downs for region A‑TC2 specifications. There continued to be reference to subcontracting an engineering firm in respect of the tie‑downs, footings, verandah and design aspects of the project. The proposal then stated:
I have spoken to one company that is WA based and they have indicated an interest and capacity to carry out this portion of the contract and would assist with matters of contract administration, correspondence and program updates. Their fee structure is approximately $150,000 per camp. Our submission will include drawings of as‑builts, inspections of footings, tie-downs and verandas, engineered certification for the construction of the units, OH&S, Environmental plans along with full site records, photographs and documentation of works on site.
The assumption regarding the Spotless design referred to in the covering letter was of particular importance on the appeal. The appellant argued that the effect of the assumption was that NT Link took no responsibility for the correctness of the specifications contained in the RFT, including the reference to RV1 being in region A. In these circumstances it was contended that there remained a necessity to ensure that the camp was built to meet the appropriate wind loads and that responsibility in that regard fell upon the respondents. The reasons it was said to fall upon the respondents included that Spotless withdrew as project manager and TPI entered into a direct contract with NT Link. In these circumstances it was said to be no longer open for the respondents to rely upon Spotless.
The correct interpretation of the assumption contained in the letter of 18 May 2006 is not without difficulty. There is obviously a potential inconsistency between the reference to work being carried out in accordance with Australian Standards and the assumption that the Spotless design 'meets all regulations'. Furthermore, at the trial it was claimed by TPI and FMG employees that the assumption related to camp layout and not the design specifications of the dongas. The change to the proposal letter was said to be in response to comments made about the first proposal in that NT Link had offered an alternate layout for the camp, which TPI did not accept.
As I have noted, Spotless withdrew as project manager and recommended that FMG deal with NT Link directly. NT Link then submitted a third proposal dated 2 June 2006 (exhibit 106). At page 6 under the heading 'Design' this proposal stated:
The camp layout has been provided to us and we have assumed that this design satisfies all requirements of FMG and all the appropriate authorities.
On page 11 the new proposal states that NT Link has 'allowed for engineered tie‑downs, region A‑TC2 for all units …' References to retaining an engineering firm for this purpose and in respect of verandahs, footings and design aspects, remained the same.
The installation contract
A contract was drafted which was sent by FMG to Spotless for comment. Although Spotless was no longer to be the project manager of the construction of RV1 it was still committed to operating and managing the camp on its completion. The draft contract was sent to Spotless to ensure that the design would be effective from an operational perspective. A final contract between TPI and NT Link was signed on 31 July 2006 (exhibit 4(i)).
It was an agreed fact at the trial that NT Link represented that it had substantial experience in the design and installation of railway camps, having recently completed accommodation camps for the Alice Springs to Darwin railway. In his reasons, the magistrate accepted that Mr Smith, in his discussions with FMG personnel, had represented that NT Link had experience in the installation of work camps in areas exposed to cyclonic conditions. Whilst Mr Smith indicated that NT Link did not hold a Western Australian builders licence and had no engineering capacity, he did represent that he had access to engineering services and had relevant experience based on projects completed in the past by NT Link.
The contract comprises a number of contract documents. The contract documents were defined in cl 2 of the contract agreement as including the contract agreement, the General Conditions, the Special Conditions and a number of attachments. One of the attachments was Attachment A, being the Scope of Works and the schedule of contract drawings.
The contract agreement was a three page document with a number of annexures. The contract agreement stated that the contractor, being Spunbrood Pty Ltd (trading as NT Link) agreed to perform the work described in the contract in accordance with the contract 'in a competent and workmanlike manner' (cl 1).
The General Conditions contained the following relevant provision:
Clause 1.1The Contractor shall with due diligence and in a good and workmanlike manner carry out and complete the works in accordance with the contract documents consistent with the nature and character of the works.
In Attachment A under the heading 'Design' the following was stated:
The village layout has been provided to the Contractor and the Contractor has assumed that this design satisfies all the requirements of the Owner and all the appropriate authorities.
Also in Attachment A under the heading 'Scope of works - installation' the following was stated:
Building Applications - Contract Documentation prior to commencement
The Contractor will submit a builder's application to the relevant Shire Council before commencing the village installations. The contractor will supply structural, electrical, mechanical and hydraulic drawings for village services with particular note of drainage, communications, and TV. Drawing floor plans of all buildings to be supplied will be submitted to the Owner within 7 days for sign-off within 7 days.
Installation of buildings
All buildings will be unloaded using a 12 tonne forklift. The village buildings will be placed on dry laid blocks as close to the ground as is practical, concrete paths will follow the terrain to minimise the amount of fill required, earthworks will be compacted and levelled along the front of all accommodation buildings to a height that will accommodate one pre‑cast concrete step (or equivalent) and to each individual room. The buildings will be unpacked and swept clean on site. Cleaning before occupation is to be carried out by the Owner's caterers at the Contractor's expense. All buildings will be tied down by using four tonne concreted board piers with steel rod or chain welded to the chassis. (Large complex units will only be tied down at their perimeter). The Contractor has allowed for engineered tie‑downs, Region A‑TC2 for all units - complexes over three buildings will only have tie-downs to the exterior of the units.
Attached to the contract were a number of design drawings. Some of these included a box containing the words:
BUILDING DESIGN CRITERIA
Wind Load - In Accordance with AS.1170.2:2002
REGION A, TERRAIN CATEGORY 2
Annual Probability of Exceedance 1:500REGIONAL WIND SPEED - V500 = 45 m/s
Some of the drawings, including some containing the box just referred to, also have what appears to be a certification stamp by a firm of chartered consulting engineers. The stamp merely states the word 'certified' together with the signature of an engineer. The engineer who signed the certification was not called as a witness.
There was evidence before the magistrate that Mr Smith had visited the site of RV1 prior to the installation contract being signed. He instructed surveyors who identified the precise coordinates of the camp and advised him of those coordinates. It was not disputed that these coordinates placed the camp within wind region C of AS/NZS 1170.2.2002.
Shire approval
It was the responsibility of NT Link under the contract to obtain a building licence in respect of RV1 from the relevant local authority. An application was made by NT Link on 13 July 2006 (exhibit 4(j)). Building plans which accompanied the application included a design drawing that specified that the wind loading was to be in accordance with AS 1170.2.2002 and that the relevant wind region was A‑TC2.
On 20 July 2006 the Shire of East Pilbara granted a building licence to NT Link to build the buildings at RV1 in accordance with the plans and specifications attached to the application. The licence issued by the Shire contained a condition that stated that the licence had issued on the understanding that the construction would be carried out in accordance with the Building Code of Australia 2004. The licence was issued to NT Link in its capacity as the builder. A copy of the building licence was also provided to the respondents.
Construction of RV1 and Team 45
NT Link installed the buildings at RV1 generally in accordance with the plans. However, contrary to its obligations under the contract, NT Link did not obtain independent engineering advice in relation to the tie‑downs for the dongas. Instead, NT Link obtained drawings for the tie‑downs from a construction manager who had previously been part of the Spotless project management team. He was not an engineer. In any event, his drawing did not comply with the requirements for wind region A (let alone region C). Furthermore, the tie‑downs were not competently installed in that the welding on many of them was substandard.
Attached to the outside of most of the dongas were metal tags indicating that they had been constructed to wind region A standards. It was said that these tags were readily visible and there was no real dispute in this regard.
In February 2006, prior to the contract being executed, a management group comprising employees of FMG and Worley Parsons Services Pty Ltd, an engineering firm, was formed for the purpose of coordinating management of the infrastructure project. FMG had entered into a contract with Worley Parsons in January 2006 pursuant to which Worley Parsons would provide engineering, procurement, construction and management services in relation to the development of the project.
The management group formed in February 2006 was known as 'Team 45'. Team 45 was not a separate legal entity, it was simply a name used to identify the management group with responsibility for planning and executing the project on behalf of FMG.
Mr Giovanni Macchiusi was a project manager for FMG and a member of Team 45. It was his responsibility to ensure that RV1 was constructed in accordance with the contract. He recruited Mr Peter Lawry, through Worley Parsons, to assist him with this task. Mr Lawry's role was to satisfy himself that the installation was done in accordance with the installation contract and report to Mr Macchiusi. He was to ensure that each of the four camps was built in accordance with the relevant contract, on schedule and within budget.
Mr Lawry was provided with diagrams, including a copy of the diagram for the tie‑downs, however he stated that he did not know the significance of wind region A as referred to on those diagrams. Nevertheless, the magistrate made a finding that Mr Lawry was an experienced civil engineer with design skills and experience and that he was engaged to provide supervisory and inspection services with respect to the installation work at RV1 and elsewhere. The magistrate found that those services extended beyond ensuring timely completion of the work, and that they also embraced him making an assessment of the quality of the work completed and directing completion or rectification in the event of defects being identified. His Honour also found that Mr Lawry's role included satisfying himself that the installation of buildings at RV1 was in accordance with the installation contract and that he was responsible for providing reports to Mr Macchiusi.
Mr Macchiusi gave evidence as to his understanding of wind regions and as to the reasons for his belief that RV1 was constructed to the appropriate standards:
Now, during 2006 and the first part of 2007, were you aware that there existed different wind regions throughout Australia?---In a general sense, yes.
Could you tell his Honour what was the nature of your awareness of the different wind regions?---That there were more severe wind categories in certain areas and less severe in others.
Yes. But did you understand what regions A, B, C or D referred to?---In a quantitative sense, no. I didn't know that A was, for example, a high wind region or what that number might be or a low wind region or what that number would be.
Did you know the exact meaning of TC2?---No.
Did you have any knowledge, apart from what you have read in the request for tender, as to which region RV1 was located?---Only the inquiry, I had no other information.
Only the request for tender, you mean?---Yes, yes.
Yes. Did you know the areas or distances by which a region was to be defined or ascertained?---No.
Did you know whether the appropriate wind region classifications for RV1 might turn on whether or not it was more or less than 100 kilometres?---No.
Did you have any doubt about the statements in the request for tender and in the contract, that RV1 was located in region A?---No, no doubts.
Did you know who wrote the request for tender?---No, I don't know who was the author of the tender.
But you do have (sic) the authorship, whoever it may have been, came from Spotless?---Yes.
Did you question the statement in the request for tender that RV1 was within wind region A TC2?---No.
Why didn't you?---It had no significance to me, that wasn't the purpose of what I was doing.
When did you learn that region A might not be the correct classification for RV1?---At some point after Tropical Cyclone George passed over the area - some days.
Had you received information or advice prior to the entry into the contract with NT Link that region A might be the incorrect classification for RV1 what would you have done?---I would have ensured it was made correct.
Prior to Cyclone George, Mr Macchiusi, what was your belief as to the construction quality of RV1?---It had been completed in accordance with the contract was my inference in accordance with the codes and the regulations.
What led you to form that belief?---That we had, firstly, engaged a competent contractor - - -
Yes?--- - - - who performed the work to the best of my knowledge diligently and I formed that view by way of reports and other input I was getting from Peter Lawry and his team.
Were you affected in that belief by the fact that you also had in addition to the competent contractor a competent civil engineer in the form of Lawry and his subordinates superintending the contract?---You could say that, yes.
Did the involvement of Spotless at the beginning also inform your belief?‑‑‑I believed Spotless were competent in the beginning, yes (ts 7/5/10 pages 24 ‑ 25).
Relevant statutory provisions
Section 19(1) of the Act provides as follows:
An employer shall, so far as is practicable, provide and maintain a working environment in which the employees of the employer (the employees) are not exposed to hazards and in particular, but without limiting the generality of the foregoing, an employer shall -
(a)provide and maintain workplaces, plant, and systems of work such that, so far as is practicable, the employees are not exposed to hazards; and
(b)provide such information, instruction, and training to, and supervision of, the employees as is necessary to enable them to perform their work in such a manner that they are not exposed to hazards; and
(c)consult and cooperate with safety and health representatives, if any, and other employees at the workplace, regarding occupational safety and health at the workplace; and
(d)where it is not practicable to avoid the presence of hazards at the workplace, provide the employees with, or otherwise provide for the employees to have, such adequate personal protective clothing and equipment as is practicable to protect them against those hazards, without any cost to the employees; and
(e)make arrangements for ensuring, so far as is practicable, that -
(i)the use, cleaning, maintenance, transportation and disposal of plant; and
(ii)the use, handling, processing, storage, transportation and disposal of substances,
at the workplace is carried out in a manner such that the employees are not exposed to hazards.
Section 19A of the Act provides as follows:
(1)If an employer contravenes section 19(1) in circumstances of gross negligence, the employer commits an offence and is liable to a level 4 penalty.
(2)If -
(a)an employer -
(i)contravenes section 19(1); and
(ii)by the contravention causes the death of, or serious harm to, an employee;
and
(b)subsection (1) does not apply,
the employer commits an offence and is liable to a level 3 penalty.
(3)If -
(a)an employer contravenes section 19(1); and
(b)neither subsection (1) nor subsection (2) applies,
the employer commits an offence and is liable to a level 2 penalty.
(4)An employer charged with an offence under -
(a)subsection (1) may, instead of being convicted of that offence, be convicted of an offence under subsection (2) or (3); or
(b)subsection (2) may, instead of being convicted of that offence, be convicted of an offence under subsection (3).
Section 23D of the Act provides:
(1)This section applies where a person (the principal) in the course of trade or business engages a contractor (the contractor) to carry out work for the principal.
(2)Where this section applies, sections 19 and 19A have effect -
(a)as if the principal were the employer of -
(i)the contractor; and
(ii)any person employed or engaged by the contractor to carry out or assist in carrying out the work concerned,
in relation to matters over which the principal has the capacity to exercise control; and
(b)as if -
(i)the contractor; and
(ii)any person referred to in paragraph (a)(ii),
were employees of the principal in relation to matters over which the principal has the capacity to exercise control.
(3)Where this section applies, the further duties referred to in subsection (4) apply and sections 20A, 23H and 23J have effect -
(a)as if the principal were the employer of -
(i)the contractor; and
(ii)any person employed or engaged by the contractor to carry out or assist in carrying out the work concerned;
and
(b)as if -
(i)the contractor; and
(ii)any person referred to in paragraph (a)(ii),
were employees of the principal.
(4)The further duties mentioned in subsection (3) are -
(a)the duties of an employee under section 20; and
(b)the duties of an employer under sections 23G(2) and 23I(3).
(5)An agreement or arrangement is void for the purposes of this section if it purports to give control to -
(a)a contractor; or
(b)a person referred to in subsection (2)(a)(ii),
of any matter that -
(c)comes within section 19 or 23G(2); and
(d)is a matter over which the principal has the capacity to exercise control,
but this subsection does not prevent the making of a written agreement as mentioned in section 23G(3).
(6)A purported waiver by a contractor of a right that arises directly or indirectly under this section is void.
(7)Nothing in this section derogates from -
(a)the duties of the principal to the contractor; or
(b)the duties of the contractor to any person employed or engaged by the contractor.
Sub‑section 23G(2) of the Act provides:
Where -
(a)an employee occupies residential premises that are owned by or under the control of the employee’s employer; and
(b)the occupancy is necessary for the purposes of the employment because other accommodation is not reasonably available in the area concerned,
the employer must, so far as is practicable, maintain the premises so that the employee occupying the premises is not exposed to hazards at the premises.
Sub‑section 23H(2) of the Act provides:
If -
(a)an employer -
(i)contravenes section 23G(2); and
(ii)by the contravention causes the death of, or serious harm to, an employee occupying premises as mentioned in that section;
and
(b)subsection (1) does not apply,
the employer commits an offence and is liable to a level 3 penalty.
The Act includes a number of relevant definitions in s 3, including:
employee means -
(a)a person by whom work is done under a contract of employment; or
(b)an apprentice;
employer means -
(a)a person that employs an employee under a contract of employment; and
(b)in relation to an apprentice, a person who employs the apprentice under a training contract registered under the Vocational Education and Training Act 1996 Part 7 Division 2;
hazard, in relation to a person, means anything that may result in -
(a)injury to the person; or
(b)harm to the health of the person;
practicable means reasonably practicable having regard, where the context permits, to -
(a)the severity of any potential injury or harm to health that may be involved, and the degree of risk of it occurring; and
(b)the state of knowledge about -
(i)the injury or harm to health referred to in paragraph (a); and
(ii)the risk of that injury or harm to health occurring; and
(iii)means of removing or mitigating the risk or mitigating the potential injury or harm to health;
and
(c)the availability, suitability, and cost of the means referred to in paragraph (b)(iii);
risk, in relation to any injury or harm, means the probability of that injury or harm occurring.
Section 5 sets out the objects of the Act:
The objects of this Act are -
(a)to promote and secure the safety and health of persons at work;
(b)to protect persons at work against hazards;
(c)to assist in securing safe and hygienic work environments;
(d)to reduce, eliminate and control the hazards to which persons are exposed at work;
(e)to foster cooperation and consultation between and to provide for the participation of employers and employees and associations representing employers and employees in the formulation and implementation of safety and health standards to current levels of technical knowledge and development;
(f)to provide for formulation of policies and for the coordination of the administration of laws relating to occupational safety and health;
(g)to promote education and community awareness on matters relating to occupational safety and health.
The charges
Seventeen charges were preferred against TPI and one against FMG. In each case the respondent was charged with being a principal, who in the course of trade or business engaged a contractor, and failed in respect of its duties to ensure that any person employed or engaged by the contractor was not exposed to hazards. The charges were of three types.
Six charges against TPI and one charge against FMG alleged a failure to provide and maintain adequate safety procedures in the event of a cyclone. These charges were pursuant to s 19(1) and s 19A of the Act.
Six charges against TPI alleged a failure to provide a safe refuge in the event of a cyclone contrary to s 19(1) and s 19A.
Five charges against TPI alleged a failure to maintain premises occupied by employees that were able to withstand cyclones contrary to s 23G(2) and s 23H(2).
All of these charges related to the same alleged failure. That is, that the accommodation facilities had not been constructed in accordance with the appropriate standards as regards wind loads. Because of this failure the procedure that workers should shelter in the dongas in the event of a cyclone was said to be defective. Similarly, because of this failure, there was alleged to have been no safe refuge in the event of a cyclone and the residential premises provided to workers were not adequate to prevent them from being exposed to the hazards of cyclones.
There was no dispute either at trial or on appeal that the dongas had not been properly constructed. The issue, rather, was whether TPI and FMG had done all that it was reasonably practicable for them to do to ensure that the dongas were properly constructed and that they were an appropriate and safe refuge in the event of a cyclone.
Whether there had been such a failure depended in practical terms on the prosecution being able to identify a reasonably practicable thing that each of the respondents should have done to ensure that workers were not exposed to the hazards of cyclones. This was rather generally stated in the particulars provided prior to the trial. However, at least on the appeal, the appellant identified the respondents' failure as being a failure to ensure that the dongas were built according to relevant wind load specifications by engaging the services of an appropriately qualified engineer specifically to ensure that this had been done.
The magistrate's reasons
The magistrate's reasons are detailed and comprehensive. They comprise some 338 pages and 836 paragraphs. His Honour carefully summarised the evidence, the relevant law and the competing submissions. It is unnecessary for me to deal with his Honour's reasons in their entirety. I will refer only to those parts which are of relevance to the present appeal.
The magistrate accepted that the respondents and their employees did not have the necessary skill or knowledge to design or install the accommodation dongas at RV1. The task of designing and installing the dongas was of such a nature that the respondents needed to call upon the expertise of others. His Honour found that it was NT Link that the respondents finally engaged to provide that expertise (Reasons [714] ‑ [715]).
The magistrate found that NT Link made clear representations that it would undertake design and engineering work in compliance with the Building Code of Australia and the relevant Australian Standards. In doing so, NT Link would utilise skilled professionals and tradesman. His Honour concluded that the aggregate effect of these representations was to cause the respondents to believe that NT Link had accepted responsibility for the design of the dongas and that it was on that basis that the contract was entered into (Reasons [717] ‑ [722]).
His Honour said:
There is no doubt that NT Link portrayed itself as an expert and having do [sic] so TPI and FMG were entitled to rely upon it as having the design and installation expertise required to complete the tasks. TPI and FMG and in [sic] persons in their position were entitled to reasonably believe and understand that NT Link had the technical knowledge concerning matters like the wind load design specifications and also had access to engineering expertise to allow for an engineered tie down system and that TPI was going to pay for that service as part of the agreed procurement price.
Yet it is the fact that at no material time did NT Link raise through its representatives any concerns with representatives of FMG or TPI that the reference to the region 'A‑TC2' in the RFT or its proposals for the instalment contract was or maybe inappropriate or required reconsideration. This was so despite according to Mr Smith he had apparently checked and measured that the site of RV1 was 97 km from the smoothed coastline remembering he accepted it was his duty to satisfy himself on behalf of NT Link but he raised no concern or issue which at least would have warranted a need to reconsider the wind load classification of RV1 as region A when it was in fact region C. Furthermore, NT Link did not indicate that the tie‑downs were not engineered or not reviewed and approved by engineers it had retained or any other engineer (Reasons [723] ‑ [724]).
The magistrate went on to describe Mr Smith's attitude as being one of 'near enough is good enough' in the discharge of NT Link's obligations. He said that it appeared that Mr Smith preferred to merely assume that Spotless must have got the wind region specification right in the RFT and that, if it was wrong, then the Shire would pick this up in considering the application for a building licence (Reasons [725]).
The magistrate noted that there were other circumstances that would have led the representatives of FMG and TPI to believe that NT Link 'knew its business and was going about it appropriately'. He referred in this regard to the wind region specification in the NT Link proposals and the contract as being the same as that specified by Spotless in the RFT. His Honour noted that Spotless had assembled a team that included an experienced registered builder of camps of this type and that that team had prepared the RFT (Reasons [727]).
Furthermore, the magistrate noted, NT Link had applied to the Shire of East Pilbara for a builders licence. His Honour said:
In issuing the licence the Shire of East Pilbara appeared to have approved the building plans for RV1 which had been submitted by NT Link as part of the application for the licence. Some of those plans showed wind load region A specifications. Those plans were essentially those that were contained in the installation contract but did not include exhibit 4L. From the face of some of the plans it appeared that the Shire of East Pilbara's approval was based on the work and advice of its Principal Building Surveyor which by reasonable and necessary implication indicated an acceptance of the specifications contained in those plans (Reasons [728]).
The magistrate noted that on completion the buildings were to be owned by a related company of NT Link, Smith Prell Pty Ltd. His Honour suggested that in these circumstances it would be expected that NT Link would be careful to ensure that the buildings were designed to withstand cyclones and to avoid the damage or loss to its related company that might occur if they were not so designed (Reasons [729]).
The magistrate said that in these circumstances there was nothing to signal to the minds of the relevant personnel within TPI and FMG that the tasks allocated to NT Link did not fall within its area of expertise. In particular, there was nothing to indicate that the wind load specifications had not been correctly identified (Reasons [730]).
The magistrate expressed the view that TPI and FMG had procured the services of apparently well‑qualified and experienced experts to design and identify the suitable specifications for the buildings at RV1. Having found that there was nothing to suggest that the experts may not have carried out their duties carefully and safely, his Honour concluded that it was unreasonable to expect that further experts needed to be engaged to review the work done by the experts first engaged (Reasons [740]).
In conclusion the magistrate stated:
On what TPI and FMG called the 'ultimate contravention issue' the prosecution has not proven beyond reasonable doubt that TPI failed so far as was practicable -
(1)in terms of the cyclone procedure charges, to provide and maintain a safe working environment by failing to provide an adequate cyclone procedure;
(2)in terms of the safe procedure charges, to provide and maintain a safe working environment by failing to provide a safe refuge; and
(3)in terms of the residential premises charges, maintain the premises so they were able to withstand cyclones.
Likewise the prosecution has not proven beyond reasonable doubt that FMG failed so far as was practicable in terms of the single cyclone procedure charge it faced, to provide and maintain a safe working environment by failing to provide an adequate cyclone procedure.
Put another way on the evidence TPI and FMG had a belief that the accommodation dongas at RV1 constituted a safe refuge and could not have reasonably done more in 'so far as is practicable' to provide an adequate safety procedure, safe refuge or in maintaining the residential premises. The prosecution failed on what was described in submissions as the 'ultimate contravention issue' to prove beyond reasonable doubt that either TPI and FMG did not act reasonably in assuming that the accommodation dongas at RV1 would be and were properly designed and constructed in accordance with the relevant standards so as to constitute safe refuges in the event of cyclone. This is so despite the extreme in (sic, and) inexplicable failures of NT Link and Mr Lawry (Reasons [745] ‑ [747]). (original emphasis)
Grounds of appeal
The grounds of appeal are as follows:
1.The learned magistrate erred in fact and law in finding that the [respondents] had reasonably relied on the expertise of external specialists by engaging Spotless Services Australia Limited ('Spotless'), Spunbrood Pty Ltd ('NT Link') and Peter Lawry when the evidence established that the circumstances in which those entities were engaged was such that it would not have been reasonable for [the respondents] to have relied upon that expertise in order to fulfil its own obligations under [the Occupational Safety and Health Act 1984].
[Particulars omitted]
2.The learned magistrate erred in law in finding that the prosecution had not disproved that TPI had acted reasonably in assuming that the dongas would be safe refuges.
[Particulars omitted]
3.The learned magistrate erred in fact and law in holding that TPI could not reasonably have known that the Shire of East Pilbara had approved plans with incorrect wind load specifications.
[Particulars omitted]
4.The learned magistrate erred in failing to convict [the respondents] of the [charges under the Occupational Safety and Health Act 1984] when the elements of the [charges] were proved and [the respondents] had no excuse from criminal liability.
[Particulars omitted]
The relevant law
Section 19(1) of the Act imposes a duty on employers to provide and maintain, so far as is practicable, a working environment in which employees are not exposed to hazards. An employer who contravenes s 19(1) commits an offence under s 19A. If the contravention is committed in circumstances of gross negligence and the employer is a body corporate the maximum penalty for a first offence is $500,000: s 19A(1), s 3A(4). If the contravention causes the death of, or serious harm to, an employee and the employer is a body corporate the maximum penalty for a first offence is $400,000: s 19A(2), s 3A(3). In all other cases involving a contravention of s 19(1) an employer which is a body corporate is liable to a maximum fine of $200,000 for a first offence: s 19A(3), s 3A(2). In the present case a number of the charges alleged that the contravention had caused death or serious harm to an employee.
Whilst the respondents were not the employers of the workers, they were alleged to be liable as persons who had engaged contractors to carry out work for them where the workers had been in turn engaged by the contractors to carry out or assist in the work concerned and where the design of the dongas was a matter over which the respondents had the capacity to exercise control: s 23D.
Section 23G imposes a duty upon employers to maintain residential premises for employees that are owned or controlled by the employer, and are necessary for the purposes of employment, in such a manner as not to expose the employees to hazards on those premises. An employer who contravenes s 23G commits an offence under s 23H. If the contravention is committed in circumstances of gross negligence and the employer is a body corporate it is liable to a maximum fine of $500,000 for a first offence: s 23H(1), s 3A(4). If the contravention causes the death of, or serious harm to, an employee occupying the premises and the employer is a body corporate it is liable to a fine of up to $400,000 for a first offence: s 23H(2), s 3A(3). In all other cases involving a contravention of s 23G where the employer is a body corporate it is liable to a fine of up to $200,000 for a first offence: s 23H(3), s 3A(2). The offence under s 23H is also given extended application to principals by s 23D.
Because liability was alleged against the respondents on the basis that they were principals rather than employers I have generally referred to the affected employees as 'workers'. In effect the respondents were deemed employers for the purposes of the Act, but the use of the term 'workers' avoids any confusion.
The fact that the duties under the Act to ensure the safety of workers extend both to employers and principals means that in any particular case there may be a number of different entities who have responsibilities in respect of the same workers. These responsibilities are concurrent. A principal cannot contract out of its duties to workers and an agreement to do so would be void: s 23D(5).
A person is not absolved of responsibility for their workers merely because someone else also has a duty in respect of them. Accordingly, it would be no answer to a charge to suggest that another responsible entity has failed in its duty. The question is always whether the person who has been charged with a contravention has failed to do all that it is reasonably practicable for them to do to ensure that their workers are protected from hazards.
For the purposes of this appeal, the critical words in both s 19(1) and s 23G are 'so far as is practicable'. The word practicable is defined in s 3 of the Act, as appears earlier in these reasons. Relevantly, it means reasonably practicable having regard to the severity and degree of risk of any potential harm, the state of knowledge about the nature and risk of such harm, and the means for minimising the risk or the harm and the availability, suitability and cost of such means.
The use of the word reasonably in this context imports not only an objective standard but one that is moderated by the circumstances. Thus the Act does not require employers and principals to take action to minimise every possible risk to safety regardless of the degree of that risk or the cost involved. The duty of employers and principals is to assess the potential risks of harm to workers and to take such action to minimise those risks as could be reasonably expected of an employer or principal in the relevant circumstances.
The duties imposed on employers and principals by s 19(1) and s 23G are not absolute duties: Chugg v Pacific Dunlop Ltd [1990] HCA 41; (1990) 170 CLR 249, 251 (Brennan J); Interstruct Pty Ltd v Wakelam (1990) 3 WAR 100 [108] ‑ [109] (Wallace J, Rowland J agreeing); Wylie v South Metropolitan College of TAFE [2003] WASCA 34 [45]; Tobiassen v Reilly [2009] WASCA 26; (2009) 178 IR 213 [59].
In Laing O'Rourke (BMC) Pty Ltd v Kirwin [2011] WASCA 117, Murphy JA said [31] ‑ [32]:
The words 'reasonably practicable' are ordinary words, bearing their ordinary meaning and simply call for the making of a value judgment in light of all the facts: Slivak v Lurgi (Australia) Pty Ltd [2001] HCA 6; (2001) 205 CLR 304, 322 (Gaudron J). Hindsight may mislead. As Harper J said in Holmes v RE Spence & Co Pty Ltd (1992) 5 VIR 119, 123 ‑ 124, in relation to the equivalent provision in the Victorian legislation:
'The Act does not require employers to ensure that accidents never happen. It requires them to take such steps as are practicable to provide and maintain a safe working environment. The courts will best assist the attainment of this end by looking at the facts of each case as practical people would look at them: not with the benefit of hindsight, nor with the wisdom of Solomon, but nevertheless remembering that one of the chief responsibilities of all employers is the safety of those who work for them.'
That approach has been adopted in Western Australia: see MacCarron v Future Engineering & Communication Pty Ltd (Unreported, WASC, Library No 980350, 23 June 1998) 11; Shepherd v Co-Operative Bulk Handling Ltd [2001] WASCA 413 [55].
As regards the 'state of knowledge' relating to the injury, the risk of injury and the means of removing or mitigating the risk referred to in the definition of practicable, the Court of Appeal in Reilly v Devcon Australia Pty Ltd [2008] WASCA 84; (2008) 36 WAR 492 said:
It can be accepted that the 'state of knowledge' referred to in [the definition of practicable] is objective. The fact that a person who is in control of a particular 'matter' affecting safety does not know something that should have been known by a person in that position cannot answer the question whether it was reasonably practicable for that person to have done something about the matter. However, the words 'state of knowledge about … the risk … and means of removing or mitigating the risk … ' encompass not only what is known concerning those matters, but also who might ordinarily be expected to have that knowledge. Consequently, when considering, for the purposes of s 19(1), whether it was reasonably practicable for a deemed employer to have avoided a particular hazard, it would be a relevant consideration that the expert knowledge required to avoid the hazard fell within the province of the specialist contractor which had been engaged to do the work that gave rise to the hazard and outside that of the deemed employer [60].
Hamersley Iron Pty Ltd v Robertson (Unreported, WASC, Library No 980573, 2 October 1998) was a case concerning s 9(1)(a) of the Mines Safety and Inspection Act 1994 (WA), a provision for all relevant purposes in the same terms as s 19(1)(a) of the Act. In that case Steytler J (as his Honour then was) said that if the obligation to provide a safe work place requires an employer to call upon expertise that it lacks then it should do so. His Honour noted that if an employer relied upon a specialist contractor to perform a task which demonstrably fell within the contractor's area of expertise and outside that of the employer, and if the task reasonably appears to the employer to have been carefully and safely performed by the contractor, it would ordinarily be difficult to conclude that the employer had breached the statutory duty. His Honour concluded that in circumstances of that kind it would not ordinarily be practicable for the employer to do more. These comments must equally apply to principals liable under s 23D.
Steytler J's observations were referred to by the Court of Appeal in Reilly v Devcon in the following terms:
That construction seems to us to be appropriate. In our respectful opinion, a construction imposing a greater burden on an employer of the kind there under consideration would be unreasonable and unsupported by the language of the section, read in its context. For the reasons we have given, the same appears to us to be true of s 19(1) of the present Act (read with the definition of 'practicable' in s 3(1)) [65].
See also Tobiassen v Reilly [62].
This does not mean that an employer or principal faced with a task that is beyond its area of expertise can, by contracting out the work to another, relieve itself of any responsibility under the Act to ensure the safety of its workers. The duty to ensure the safety of workers remains a personal one. In such circumstances the employer or principal continues to have a duty to take all reasonable precautions to avoid risks to the safety of workers but can sufficiently discharge that duty by ensuring that relevant expertise is brought to bear on the task. What is required in any particular case would depend upon the facts of the case: Tobiassen v Reilly [61].
The word 'risk' is defined in s 3 as meaning the probability of injury or harm occurring. This definition requires consideration of the question of foreseeability: Chugg v Pacific Dunlop Ltd; Hamersley Iron Pty Ltd v Robertson [19]. That in turn requires consideration of whether it is shown that the employer or principal knew, or that a reasonable employer or principal in their position would have appreciated or foreseen, the risk of injury or harm to health occurring: Wylie v South Metropolitan College of TAFE; Reilly v Devcon; Silent Vector Pty Ltd v Shepherd [2003] WASCA 315 [11] ‑ [12]; Laing O'Rourke v Kirwin [34].
In Reilly v Devcon [68] and Laing O'Rourke v Kirwin [35] (Murphy JA), the following observations of Stuart‑Smith LJ in R v Associated Octel Co Ltd [1994] 4 All ER 1051 were referred to with approval:
[T]he question of control may be very relevant to what is reasonably practicable. In most cases the employer/principal has no control over how a competent or expert contractor does the work. It is one of the reasons why he employs such a person - that he has the skill and expertise, including knowledge of appropriate safety precautions which he himself may not have. He may be entitled to rely on the contractor to see that the work is carried out safely, both so far as the contractor's workmen are concerned and others, including his own employees or members of the public; and he cannot be expected to supervise them to see that they are applying the necessary safety precautions. It may not be reasonably practicable for him to do other than rely on the independent contractor.
But there are cases where it is reasonably practicable for the employer to give instructions how the work is to be done and what safety measures are to be taken …
The question of what is reasonably practicable is a matter of fact and degree in each case (1062).
In a number of cases it has been held that employers have not breached their duty to ensure the safety of workers in circumstances where they have contracted with others to undertake work which was outside their area of expertise. These cases include Complete Scaffold Services Pty Ltd v Adelaide Brighton Cement Ltd [2001] SASC 199 and Tobiassen v Reilly. In the latter case the particular hazard that led to the accident and the means of eliminating it were both matters which fell outside the expertise of the appellant. They were also matters which the appellant believed to be within the expertise of the contractor it engaged. There was nothing to indicate that the contractor lacked the relevant expertise or that it may not have carried out, or was not carrying out, the work in a safe manner. Nor was there anything to suggest that additional expert advice was required in order to carry out the work safely. In those circumstances the court held it was not apparent what other reasonably practicable steps the appellant could have taken to prevent the accident [65].
Laing O'Rourke v Kirwin was also a case involving the events at RV1 arising from Cyclone George. In that case the appellant was a company that had been contracted by TPI to undertake work on the railway line. Some of the appellant's employees had been assigned residential accommodation at RV1. It was alleged that the appellant had failed to provide and maintain adequate safety procedures in the event of a cyclone in that the dongas nominated as safe refuges were not fit for that purpose. The position of the appellant in that case was clearly different from that of the respondents in the present case in that the respondents here were not only principals but had also entered into a contract for the construction of RV1. However, notwithstanding that important distinction, some of the issues were similar.
The crucial issue in Laing O'Rourke v Kirwin was whether it was sufficient, having regard to the nature of the statutory duty, for the appellant to act on the basis that the dongas provided a safe refuge. In that case the magistrate accepted that the appellant's two most senior employees had both assumed that the dongas were safe. Both thought that the plans for the camp had been approved by local authorities and that relevant building regulations had been complied with. Both understood that the camp had been constructed for Worley Parsons, who they understood to be a reputable company with good quality control. It was accepted that neither man had cause to suspect that the dongas were unsafe. In considering whether these assumptions were reasonable the magistrate noted that, in addition to the views concerning the reputation and competence of Worley Parsons, there was also a contract between the appellant and TPI pursuant to which TPI had agreed to exercise due skill, care and diligence and to comply with all statutory requirements. There was a document entitled 'Health and Safety requirements' which formed part of the contract with TPI under which TPI had agreed that site facilities provided would be 'cyclone prepared from establishment': see Laing O'Rourke v Kirwin [47] ‑ [48] (Murphy JA).
It is useful to note in this context that the fact of making assumptions is not itself inappropriate; it is the circumstances in which any such assumptions are made that may be relevant in determining whether an employer or principal has done all that is reasonably practicable in the circumstances. It is unlikely to be enough for a person to merely assume that someone else will attend to safety requirements, but if such an assumption is based upon inquiries made, assurances given, a reasonable belief as to the skills of those responsible for construction and a reasonable belief that regulatory approval has been obtained for the buildings, it may be well‑founded.
In Laing O'Rourke v Kirwin it was submitted by the prosecution that the appellant should have carried out its own enquiries and investigations, including obtaining engineering advice, regarding the design and fabrication of the dongas for the purpose of assessing their suitability for cyclone conditions. In the circumstances of that case Murphy JA said that that was to prescribe a content to the duty under s 19 which went beyond what was reasonably practicable. His Honour went on to say:
The taking of refuge in an appropriate shelter was generally regarded as the safest way to avoid injury in cyclonic conditions. There was nothing in the magistrate's findings of fact (which the judge accepted) to indicate to the appellant prior to the accident that the donga accommodation in Rail Camp 1 was unsuitable for use as a safe refuge, for which purpose shire‑approved accommodation was commonly adopted in work environments in cyclone‑affected areas. Nor was there anything to suggest that a reasonable employer in the position of the appellant would have appreciated or foreseen that the accommodation was not properly designed and built to withstand the weather conditions that affect the area in which it was located, or that it otherwise posed a risk of injury in the event of a cyclone. The donga accommodation was understood to have been built for a reputable and competent organisation with good quality control, and to have met the requirements of the local authority, including in relation to building standards for cyclone-affected areas authority, including in relation to building standards for cyclone‑affected areas [68].
The duties of the respondents in the present case cannot be equated with the appellant in Laing O'Rourke v Kirwin. As I have noted, the respondents contracted to have RV1 constructed. This meant that they had some level of control over what was built and who built it. Since RV1 was always intended to accommodate workers and to provide a safe refuge for them, there was a duty to ensure that, so far as was reasonably practicable, the camp was built in such a way as to guard against risks of harm. Whether that duty was breached depends upon an assessment of the circumstances pertaining to the respondents.
Ground 1 - Did the magistrate err in finding that the respondents reasonably relied on the expertise of Spotless, NT Link and Lawry?
The appellant contends that the magistrate was wrong to find that the respondents engaged NT Link to provide expertise in regard to wind region design requirements. The appellant submitted that it was not NT Link's role to provide expertise as to the appropriate wind region and that this is confirmed by the testimony of Mr Smith and 'the role of the RFT in the negotiations which led to the installation contract and the installation contract itself'. I will deal with Mr Smith's evidence and the installation contract later in these reasons.
Exactly why the 'role' of the RFT is said to be contrary to a conclusion that NT Link had responsibility for design, including in respect of wind load, is unclear. The purpose of the RFT was to provide potential tenderers with sufficient information for them to submit quotes for undertaking the work. By virtue of the disclaimer there was an obligation upon tenderers to ensure that the information on which they based any tender was correct. On one view, this would include ensuring that the wind region specification referred to in the RFT was correct. That view is supported by the fact that the RFT did not refer to an exact location for RV1. However, the appellant submits that the effect of the RFT was to require any tenderer to provide a quote on the basis that wind region A was the correct region.
Underlying this submission appears to be an assumption that it is possible to distinguish between specifications that were provided as requirements of the commissioning entity and specifications that were imposed by laws, regulations, standards and planning approval conditions. The first are 'givens' which the tenderer would be required to accept whereas the second are independent matters that the tenderer would need to determine and comply with. On the face of it, the Australian Standards dealing with wind load requirements would seem to most readily fall within that category of specifications which it was the responsibility of the tenderer to determine. It is difficult to understand why Spotless would wish to specify that the buildings would be built according to region A in circumstances where the location of the camp was not itself specified, other than as an approximation. Nor is it easy to understand why any tenderer would read the RFT in the way suggested by the appellant; that is, as requiring that the dongas be built to region A standards.
In any event, the RFT required tenderers to undertake that all work would be done in accordance with relevant Australian Standards and the Building Code. This indicates that compliance with such standards was the responsibility of the tenderer. To read the reference to wind region A in cl 4.3.5 as being somehow an exception to the general requirement to comply with the standards is neither a natural nor obvious interpretation. It requires the interpolation of significant reservations regarding the obligations of the tenderer. That is to say, that it should be read as requiring a successful tenderer to build to the standard applicable to region A without regard to what the relevant standards may require.
Furthermore, it was not necessary for the magistrate to make a conclusive finding as to the interpretation of the RFT. Nor was it the obligation of the respondents to advance evidence that it should be interpreted in a particular way. The onus was always on the prosecution to establish beyond reasonable doubt that the respondents had failed to do all that was reasonably practicable to ensure that workers were not exposed to hazards. On the face of the RFT it was open to conclude that tenderers were charged with the responsibility for determining the appropriate wind load requirements. Whilst NT Link's proposals were not part of the formal tender process they were necessarily based on the RFT. The evidence was that the relevant senior employees of the respondents had believed that NT Link would ensure that the relevant standards were complied with in respect of wind loading. In my view, such a belief was not inconsistent with the terms of the RFT. It cannot be said that a reasonable person in the position of the respondents would have concluded that NT Link was not undertaking any responsibility for wind load design.
The appellant contends that the magistrate's finding that Mr Smith, on behalf of NT Link, had intended to convey that NT Link had satisfied itself that the wind region A was the correct classification under the Building Code and the Australian Standards, was not a finding which could have been logically drawn from the evidence that the magistrate referred to in his reasons. The appellant referred to [718] ‑ [720] of the magistrate's reasons for decision. Those paragraphs read as follows:
NT Link also made clear representations that it would undertake design and engineering work related to the buildings to be built and installed at RV1. It made representations that it would comply with the Building Code of Australia 2004 and Australian Standards. It made representations that it would utilise skilled tradesman. NT Link's proposals (Exhibit 52 page 2983 and Exhibit 53 Page 3203 and Exhibit 106 Page 11) were made before entering into the instalment contract and also stated that it had allowed for 'engineered tie‑downs region A‑TC2'.
Furthermore, NT Link also actually contracted with TPI on the basis of a commitment that in terms of the installation of the buildings NT Link had '… allowed engineered tie‑downs, region A‑TC1 for all units - complexes over three buildings will only be tie‑downs to the exterior of the units' (Exhibit 41 page 2170). Indeed engineers were mentioned by name and fees dedicated for such engineering services to be paid for.
These proposals and contractual commitment were intended by Mr Smith on behalf of NT Link to convey that NT Link had satisfied itself that the wind region classification was correct under the Building Code of Australia and Australian Standards.
The reference in the instalment contract to allowing for engineered tie‑downs to region A standards contained an implication that such a standard was appropriate for the location in which the units were to be built. In any event, even if NT Link had not, at the stage it contracted for the work, determined that region A was the appropriate region, references to NT Link intending to comply with the Building Code and Australian Standards could reasonably be taken as being a representation that NT Link was responsible for ensuring that all work met such standards.
The appellant submits that the finding by the magistrate ignored the ambiguity in the Building Code of Australia with regards to the Australian Standards that were applicable. This is a reference to the fact that the Building Code allowed for either AS/NZS 1170.2.2002 or AS/NZS 1170.2:1989 to apply. As I mentioned earlier, the division of wind regions in each of those standards was not identical. The reference in the RFT to the port camp being in wind region D and all other camps being in wind region A was difficult to reconcile with either of the Australian Standards. Exactly why this should detract from the representations referred to by the magistrate is not apparent.
The suggestion appears to be that it should have been obvious to the respondents that any reference to wind region A in the NT Link contract must have been drawn from the RFT and that any reasonable examination of the information contained in the RFT would reveal that the reference to region A could not be correct. This, however, assumes that the respondents had the necessary expertise to check this level of detail and retained a responsibility to do so, either in respect of the RFT or the contract. As the magistrate found that the respondents did not have any expertise in regard to wind region specifications, it is unsurprising that he did not consider that the ambiguity referred to was significant. Accordingly, the submission that the magistrate ignored material evidence fails to engage with the substance of his Honour's reasoning.
The appellant also submits that the magistrate ignored evidence that the RFT referred to RV1 being 100 km from Port Hedland. In fact, the RFT did not refer to RV1 being 100 km from Port Hedland but being 'approx 100 km' from Port Hedland. The 100 km distance is a significant one in respect of either of the applicable standards. It would not be possible on the basis of an approximation to say with certainty whether RV1 was in region A or region C. Any conclusion in that regard would depend upon the final determined location of the camp.
The implication in the appellant's submission is that the respondents should have known on the basis of the reference to RV1 being approximately 100 km from Port Hedland that it was necessary to ensure that the camp was built according to the appropriate wind load requirements. Again, this argument assumes a preceding issue which was the major point of contention in the Magistrates Court; that is, the extent to which the respondents had the expertise and the responsibility to check issues of this nature. This was a matter in respect of which the magistrate found that the respondents had retained expert assistance, that they were entitled to do so and that they reasonably relied upon it. Accordingly, the reference to the distance of RV1 from Port Hedland in the RFT was not evidence which was inconsistent with the finding made by the magistrate at [720].
The appellant submits that the magistrate failed to take into account that the reference to the use of engineers in the proposals by NT Link related only to tie-downs, footings and verandas. In fact that is not so; the proposals also referred in this respect to 'design engineering' (exhibit 52, page 10 and exhibit 53, page 11). In any event, the proposals stated that the tie‑downs would be 'engineered' for wind region A. The point appears to be that there was no reference in NT Link's proposal to any wind region in respect of design of the accommodation units more generally and, thus, it afforded the respondents no comfort that engineering expertise would be engaged in that regard. However, it is not apparent why any reasonable reader of the documentation would assume that whilst the tie‑downs would be designed for wind region A the rest of the design features of the dongas would not necessarily comply with any wind load design requirements.
The tie‑downs were, of course, a significant feature of the ability of the dongas to withstand cyclonic winds. In this context it is not surprising that they were singled out for specific mention in the scope of works. This, however, does not detract from the general statement which appears at the beginning of the proposal dated 18 May 2006 (and, indeed, earlier proposals) that all construction work would be carried out by qualified tradespersons and subcontractors to the requisite Australian Standards. The natural and ordinary meaning of those words is that NT Link would ensure that the accommodation units were built to, amongst other things, the appropriate wind region standards, whatever they may be.
I cannot accept the argument of the appellant. Offences of this nature do not impose absolute liability upon employers. The fact that an accident has occurred and that it was possible to conceive of some means by which it could have been prevented, does not necessarily lead to the conclusion that the employer must have failed to do all that was reasonably practicable to ensure workers were not exposed to hazards.
The appellant's argument assumes that the respondents' duties could only be performed by the respondents directly ensuring that all safety requirements had been met. That is not so. Whilst the respondents could not delegate or contract out of their duties, they could perform them by ensuring that an appropriately experienced and qualified person was retained to deal with matters beyond their own knowledge and ability. The magistrate's findings were not merely that NT Link had undertaken obligations in respect of the design, but that the respondents had sought and received assurances regarding NT Link's experience and ability in this regard, and that they had acted in accordance with those representations.
The question was whether this, in all of the surrounding circumstances, was sufficient in the performance of the duty they owed to their workers. Those surrounding circumstances included that Spotless had prepared the RFT, that the Shire had approved the necessary plans, that NT Link had undertaken to ensure that all the work was completed to Australian Standards, that NT Link had indicated that engineering services would be utilised by them, that relevant plans were marked with a certification by a qualified engineer and that the respondents retained the services of Worley Parsons to assist them in project delivery.
The appellant's argument also appears to assume that because the concept of reasonableness incorporates an objective standard it does not take into account the specific circumstances in which the respondents operated. That cannot be correct. Whilst the definition of 'practicable' refers to the objectively knowable risks and means for alleviating them, that does not mean that in determining whether there has been a breach of the duty the particular circumstances of the employer are ignored. An employer has a duty to be pro‑active and to seek out information regarding possible risks and the means to alleviate them. That does not mean that it is expected to be omniscient. What it is practical and reasonable for an employer to know and to do must be determined by the context in which the employer operated at the relevant time.
The magistrate concluded that the prosecution had not established to the criminal standard that the respondents had failed to do all that was reasonably practicable. In my view, that was a conclusion open to him on the evidence and this ground of appeal cannot succeed.
Conclusion
Whilst I would grant leave to appeal in respect of each of the four grounds, none of them, in my view, can succeed. Accordingly, the appeal must be dismissed. It is unnecessary in these circumstances to consider the issues raised in the notice of contention.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: KIRWIN -v- THE PILBARA INFRASTRUCTURE PTY LTD [2012] WASC 99 (S)
CORAM: HALL J
HEARD: ON THE PAPERS
DELIVERED : 7 SEPTEMBER 2012
FILE NO/S: SJA 1030 of 2011
BETWEEN: CHRISTOPHER KIRWIN
Appellant
AND
THE PILBARA INFRASTRUCTURE PTY LTD
Respondent
FILE NO/S :SJA 1031 of 2011
BETWEEN :CHRISTOPHER KIRWIN
Appellant
AND
FORTESCUE METALS GROUP PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram :MAGISTRATE G MIGNACCA-RANDAZZO
Citation :PE 50531 to 50547 of 2008 and PE 50575 of 2008
Catchwords:
Costs - Appeal from Magistrates Court - Official Prosecutions (Accused's Costs) Act 1973 (WA) - Whether the respondent entitled to costs related to notice of contention that was not determined - Whether respondent entitled to a certificate for three counsel - Whether scale limits in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 should be removed or raised - Turns on own facts
Legislation:
Legal Practitioners (Official Prosecutions) (Accused's Costs) Determination 2010
Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010
Legal Profession Act 2008 (WA), s 252, s 275, s 280
Official Prosecutions (Accused's Costs) Act 1973 (WA), s 4, s 5, s 9
Result:
Costs orders made
Category: B
Representation:
SJA 1030 of 2011
Counsel:
Appellant: No appearance
Respondent: No appearance
Solicitors:
Appellant: State Solicitor for Western Australia
Respondent: DLA Piper Australia
SJA 1031 of 2011
Counsel:
Appellant: No appearance
Respondent: No appearance
Solicitors:
Appellant: State Solicitor for Western Australia
Respondent: DLA Piper Australia
Case(s) referred to in judgment(s):
Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122(S); (2003) 28 WAR 95
Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254
Interim Advance Corporation Pty Ltd v Fazio [2008] WASCA 140(S)
Kirwin v The Pilbara Infrastructure Pty Ltd [2012] WASC 99
R v Burgess; Ex Parte Henry (No 2) (1937) ALR 363
Stanley v Phillips [1966] HCA 24; (1966) 115 CLR 470
Sundell v Queensland Housing Commission [1954] HCA 45; (1954) 94 CLR 531
Washbourne v State Energy Commission (WA) (1992) 8 WAR 188
HALL J:
Introduction
On 23 March 2012 I dismissed the appeal in this matter: Kirwin v The Pilbara Infrastructure Pty Ltd [2012] WASC 99. The appeal was one brought by the prosecution against the dismissal by a magistrate of charges against the respondents under the Occupational Safety and Health Act 1984 (WA). On the delivery of my decision the parties indicated that they needed time to discuss the issue of costs. I reserved the question of costs and said that in the event the parties could not agree they could file written submissions and I would determine the matter on the papers.
The parties were unable to agree in respect of some aspects of the costs claimed. On 12 June 2012 I made orders requiring the filing of written submissions. The respondents filed their written submissions on 26 June 2012 together with an affidavit of Mr Simon Michael Billing, a solicitor for the respondents. The appellant filed written submissions on 3 July 2012.
The principal proceedings were an appeal from the decision of a magistrate under Pt 2 of the Criminal Appeals Act 2004 (WA). The nature of the order sought by the respondents is a certificate pursuant to s 9 of the Official Prosecutions (Accused's Costs) Act 1973 (WA) (the Accused's Costs Act) for the costs of the appeal, including the costs of the notice of contention, the costs of the application for leave to appeal and including any reserved costs. The effect of such a certificate is that any costs covered by it are payable from the consolidated account. In these circumstances the appellant is not, strictly speaking, a party to the application, however the appellant's solicitors have provided submissions to assist the court.
There are three issues in dispute:
(1)whether the respondents should be awarded costs in relation to their notice of contention;
(2)whether the respondents should have a certificate for three counsel; and
(3)whether the limits with respect to some items on the relevant scale should be removed.
It remains, of course, necessary for me to be satisfied that the terms of any costs order made are appropriate in the circumstances regardless of any agreement by the parties.
The law
The proceedings in the Magistrates Court from which the appeal was brought were an official prosecution within the meaning of that term in the Accused's Costs Act: s 4. That is because they were proceedings in a summary court in which the respondents were charged with offences by a public official. Subject to the Accused's Costs Act a successful accused is entitled to his costs: s 5(1). In the present case the respondents were successful in the proceedings in the Magistrates Court. They had an entitlement to costs in that regard and no doubt have claimed them. The present application does not relate to those costs.
Section 5(3) of the Accused's Costs Act provides for costs in respect of appeals to this court from the Magistrates Court. It provides as follows:
Where an accused is successful by reason of a decision of the appeal court, the appeal court shall make an order as to the amount of his costs in the appeal court.
Section 4(2) defines the circumstances in which an accused person is successful. These are where the accused is acquitted or discharged, where the charge is dismissed for want of prosecution, and where a conviction is set aside on appeal. In the present case none of those outcomes occurred 'by reason of a decision of the appeal court'. Rather, what occurred was that the respondents were successful in the Magistrates Court by reason of being acquitted in that court and that decision was not affected by the appeal. In these circumstances there could be an argument that in a case such as this; that is, where a prosecution appeal against an acquittal has failed, that the respondent is not a 'successful accused' in the appeal court for the purposes of s 5. See Interim Advance Corporation Pty Ltd v Fazio [2008] WASCA 140(S).
That is not a contention dealt with by the parties in their submissions and the appellant has not sought to raise it. Both parties have proceeded upon the assumption that s 5(3) covers the present circumstances. While that position is not free from doubt, I will proceed upon the same basis. That is because it is at least arguable that the definition in s 4(2) is not intended to be exhaustive and that the ordinary meaning of the words used in s 5(3) would cover a respondent to an unsuccessful prosecution appeal. If it did not then it would seem to have little purpose given that s 5(4) covers circumstances where an accused is successful by reason of an appeal court reversing a decision of the summary court. Furthermore, it is difficult to see why such circumstances would be excluded from the ambit of the Act.
Section 5(5) provides that the amount of costs ordered shall be in accordance with the scale fixed from time to time by a costs determination as defined in the Legal Profession Act 2008 (WA), s 252. Section 275 of the Legal Profession Act provides that the Legal Costs Committee may make legal costs determinations. The relevant determination here is the Legal Practitioners (Official Prosecutions) (Accused's Costs) Determination 2010 (WA) (the Accused's Costs Determination). Clause 6 of that determination provides as follows:
6.Scale of costs
Subject to clause 7, the costs recoverable by a successful accused in an official prosecution (inclusive of counsel fees but exclusive of other disbursements) shall not exceed the amounts set out in the Table to this clause.
Item 8 of the table provides that the maximum time and amounts permissible in respect of appeals are as per the rates specified in item 23 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (the Contentious Business Determination). Clause 7 of the Accused's Costs Determination provides as follows:
7.Complex matters, and matters involving a high degree of skill or urgency or require Senior Counsel
(1)Where a matter is complex, or involves a high degree of skill or urgency or requires Senior Counsel, notwithstanding the rates or scale set out in the Tables to this Determination, the accused is entitled to recover a fee that is greater than the one that is set out in this Determination, if it is reasonable in the circumstances.
(2)Work undertaken by Senior Counsel shall be allowable in accordance with the rates in the Table to clause 5 of this Determination.
Clause 5 provides that the daily rate for senior counsel is $4,620 and then states:
The daily rates set out in the table above are intended to cover all work done on a hearing or trial day whether in or out of court including preparation of written submissions and is not intended to be supplemented in any way by additional hourly charges given that the maximum number of hours allowed for the daily rate is 10 hours per day.
It can be seen from this that the rates applicable to an appeal from the Magistrates Court are those set out in the Contentious Business Determination, however, this is subject to cl 7 of the Accused's Costs Determination. Accordingly, to the extent that a matter is complex or involves a high degree of skill or urgency there is an entitlement to recover a fee that is greater than the ones set out in the determination provided that it is reasonable in the circumstances. Furthermore, if work is undertaken by senior counsel it is allowable at the rate provided for in cl 5. To the extent that there is a difference between the Accused's Costs Determination and the Contentious Business Determination, the Accused's Costs Determination provides the relevant scale. This is the effect of making application of the table subject to cl 7.
Section 280 of the Legal Profession Act provides that taxation of bills of costs of legal practitioners is subject to the relevant determination. However, s 280(3) provides that s 280(1) is not to be construed as limiting the power of a court to determine in any particular case the amount of costs allowed. Section 280(2) empowers a court to order payment of costs above those fixed by determination or fix higher limits or remove the limits on costs in the determination if it is of the opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter.
The starting point is that the amount of the costs should be in accordance with the scale prescribed. If, due to special difficulty, complexity or importance the court forms a view that higher limits than those in the scale are justified, the scale items remain the basic guidelines from determining the amount of costs to be ordered: Washbourne v State Energy Commission (WA) (1992) 8 WAR 188.
Unusual difficulty, complexity or importance?
The parties have agreed that this was a matter of unusual difficulty, complexity or importance. I am not, of course, bound by that agreement. I would, however, accept that this matter was reasonably complex in nature. In that regard I note the following:
1.The transcript of the Magistrates Court proceedings extended to 1,392 pages.
2.There were 7 volumes of documentary exhibits comprising of construction contracts, design standards and agreements involving multiple parties.
3.The outlines of submissions extended to 30 pages in the case of the appellant and 50 pages in the case of the respondents.
4.The appeal hearing was heard over 4 1/2 days.
The appeal was certainly more complex than many appeals from the Magistrates Court. Having said that, the Magistrates Court increasingly deals with complex prosecutions involving breaches of occupational health and safety, planning and environmental laws. It is not unusual for such matters to be vigorously contested and to result in hearings which proceed over many days. Nor is it unusual for such cases to result in appeals that may involve difficult questions of fact or law.
The fact that this matter was more complex than some other cases may justify allowing costs in excess of the scale, but it does not necessarily justify removing the limits entirely. This matter was not so unprecedented as to render it impossible to make any reasonable assessment of an appropriate level of costs.
In general, a successful party should be entitled to receive an award of costs. The position is no different under the Accused's Costs Act. However, there are cases in which a party may wish to expend costs that far exceed what may objectively be viewed as reasonable. A party that chooses to do this should not expect that in the event of success it will be able to recover all such costs from the unsuccessful party. Costs have never been intended to be comprehensive compensation for any loss suffered by a litigant: Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403, 410.
The existence of scales is intended to ensure that costs remain within reasonable bounds. The fact that a matter is complex and might justify a higher rate of costs than the scales would otherwise allow does not detract from the principle that the costs should nonetheless be reasonable and be proportional to the issues that needed to be determined.
The affidavit filed on behalf of the respondents provides some details of the solicitors and counsel fees incurred by them. Even taking into account the complexity of this appeal, the amount of time expended by the respondents' lawyers and the fees incurred by the respondents are extraordinary. I would venture to suggest that they are of unrivalled magnitude for an appeal of this nature. I have refrained from referring to the total dollar sum only because the respondents have not sought costs for a fixed sum in this amount, but rather for the costs to be assessed. Nonetheless, that sum has been provided to the court in support of the claim that the appeal was complex. Suffice to say it is a sum which is astonishingly large.
Bearing in mind that the issues which were raised on the appeal had already been comprehensively prepared and presented in the Magistrates Court it is difficult to understand how the amounts said to have been incurred could be justified. I note in this regard, as an example, that the respondents' solicitors billed for in excess of 346 hours in respect of the drafting of the notice of contention and preparation of submissions. The three counsel who were briefed by the respondents billed for 444.7 hours in respect of similar work. This does not include time spent in the hearing of the appeal.
The affidavit provides only a general overview of the work that was done by the respondents' solicitors and counsel. It is not my task to make a detailed assessment of that work at this stage. I note, however, that amongst other things the work of the solicitors was said to include 'reviewing provisions of the Criminal Procedure Act and Criminal Appeals Act and drafting memorandum on provisions and procedure on appeal'. It is frankly difficult to conceive why the respondents should be able to recover the costs of work of this nature; the procedure in respect of appeals under Pt 2 of the Criminal Appeals Act is straightforward and should be well‑known to solicitors practising in this area.
The notice of contention
It was unnecessary for me to address the issues raised in the respondents' notice of contention: Kirwin v Pilbara Infrastructure [13]. These were issues that had been the subject of preliminary arguments before the magistrate. A major part of the written submissions of both parties and of the appeal hearing was taken up dealing with the notice of contention. Because it was unnecessary to deal with the merits of the notice of contention it is not possible to say that they were issues in respect of which the respondents were either successful or unsuccessful. Nor is it possible to say whether, or to what extent, any of those issues had merit. To make an assessment now in that regard would be to expend considerable judicial time on issues which are moot.
In Mr Billing's affidavit he says that the grounds of contention were 'profound and complex and were reasonably ventilated by the respondents'. It is said that the solicitors for the respondents 'may well have been negligent had some of these legal issues not been raised'. These are assertions the merit of which can not been tested. The fact that a party has been successful on the principal issue does not make every argument that they raise a profound one. In this case, the arguments raised in the notice of contention did not find favour with the magistrate. It may have been an understandable forensic decision to agitate those matters again on an appeal but that, in itself, does not result in a conclusion that the respondents should be entitled to their costs in respect of the notice of contention.
The appellant, in opposing the costs of the notice of contention, notes that aspects of it were not pressed on the hearing of the appeal. In particular, the second and subsequent sentences of particular 4.1 and particular 4.2 of contention 4 and the whole of contention 5 were not relied upon. In these circumstances it would clearly be inappropriate for the respondents to be entitled to costs in respect of those aspects of the notice of contention. Indeed, given the lateness of these changes to the respondents' case it must be likely that the appellant was put to unnecessary time and expense.
The fact that the notice of contention took up such a significant proportion of the time of the appeal and appears to have also consumed much of the time of the solicitors and counsel for the respondents is good reason to be cautious before concluding that the respondents should be entitled to all their costs merely because the appeal was dismissed. Indeed, because it is apparent that significant costs were incurred in respect of the notice of contention I consider it would be inappropriate to allow costs in respect of it unless I was satisfied that such a result was justified by the evidence before me. The evidence does not justify such a conclusion. It is not possible to say that the work done in regard to the notice of contention was necessary or that the grounds of contention had merit. In my view the appropriate outcome in regard to the notice of contention is that each party should bear their own costs in respect of it.
Certificate for three counsel
As Mr Billing acknowledges in his affidavit, ordinarily a third counsel will not be warranted. However, he suggests that this matter was no ordinary prosecution. I should note immediately that I am not concerned with the question of whether additional counsel may be justified for a long prosecution hearing continuing over several weeks in which there may be issues in regards to contingencies needed to be put in place in the case of unavailability or illness of lead counsel. My concern was not with the prosecution proceedings but with an appeal which was listed for one week and involved discrete issues.
Whatever claims are made for the complexity of this matter it is very difficult to make a case for the necessity for a third counsel. I should note in this regard that whilst senior counsel made the oral submissions in respect of the response to the appeal and the first junior counsel made submissions on the notice of contention, second junior counsel for the respondents had no speaking role on the appeal.
In Stanley v Phillips [1966] HCA 24; (1966) 115 CLR 470, an appeal which was concerned with a fee for second counsel, Barwick CJ said:
It [the fee for second counsel] is fundamentally concerned with the attainment of justice, which expanded into its elements, means that it is concerned with the presentation of a case to a court of law in such manner and to such extent that a just result is able to be achieved. As it is to be supposed that the success of the party incurring the fees of counsel will involve the opponent in their payment, the expenditure must be confined to what is necessary, which means reasonably necessary, or proper to ensure such a presentation of the case … The emphasis throughout is upon obtaining an adequate presentation to enable justice to be done: it is not upon the propriety of the steps taken by a litigant to ensure the maximum of success in his own cause. That of course he may do but not, in my opinion, at his opponent's expense.
As the question is whether the presentation of a case to ensure a just determination reasonably requires the services of more than one counsel, it is the nature and circumstances of the case which provide the determinants (478).
In Sundell v Queensland Housing Commission [1954] HCA 45; (1954) 94 CLR 531 Webb J considered the circumstances in which costs of briefing a third counsel may be allowable. In that case the decision of a taxing officer disallowing costs of a third counsel was upheld on review. His Honour referred to a number of cases in which an allowance for third counsel was described as 'an unusual expense' and that to justify such an expense a case must be 'wholly special and peculiar'. His Honour also noted that in R v Burgess; Ex Parte Henry (No 2) (1937) ALR 363 Rich J held that a very strong case was required to induce a court to sanction three counsel.
It is relevant in assessing what was reasonably necessary to consider the resources marshalled by the appellant on the appeal. The appellant was represented by a senior practitioner, rather than senior counsel, and one junior counsel, rather than two. The appellant also had only one junior solicitor attend the hearing as instructing solicitor, rather than the two or three solicitors who attended on various days for the respondents.
I am not satisfied that it was reasonably necessary for the attainment of justice that the respondents had a third counsel for this appeal. As the appellant stated in written submissions, the respondents may prepare their defence as they see fit but they are not entitled to indemnity costs associated with doing so. I agree. This was not a case of such an unusual or peculiar nature as to require three counsel and, in my view, this is not an appropriate case for the court's discretion to allow for such an expense to be exercised.
Lifting or removing the scale limits
The respondents have sought that the limits of the Contentious Business Determination 2010 be removed with respect to items 23(b), (e), (f), (g), (h), (i) and (j). The appellant disputes that it is appropriate to remove the limits in respect of items 23(b), (i) and (j). In order to remove any of the limits it is necessary for me to be satisfied that it is appropriate to do so.
Section 280(2) of the Legal Profession Act is in substantially the same terms as s 215(2) of the now repealed Legal Practice 2003 (WA). In regard to the former provision it has been held that before the court would ordinarily make an order it is necessary for two matters to be satisfied. The first is that the amount of costs allowable in respect of a matter under the legal costs determination would be inadequate. The second is that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 [11]. The requirement of inadequacy will be demonstrated if the respondents show that there is a fairly arguable case that the bill to be presented to the taxing officer may tax in an amount which is greater than the limit that would be imposed by the relevant costs determination: Heartlink [16].
Item 23(b) relates to 'Appellant's Case, Respondent's Answer including relevant forms and all annexures'. The terminology is more applicable to appeals to the Court of Appeal under Pt 3 of the Criminal Appeals Act. However, by analogy this item would relate to the preparation of outlines of submissions and lists of authorities. The maximum amount provided for this item is 40 hours or $24,200 on the basis of work done by senior counsel.
As I noted earlier, the respondents' solicitors spent over 346 hours drafting the notice of contention and submissions and counsel spent a total of 444 hours on the same work. Clearly some of this time was spent in respect of the notice of contention, for which I would not allow costs. However, I accept that preparation for responding to the appeal would in this case have exceeded the maximum amount allowed for.
I do not consider it appropriate to merely remove the limit. Rather the appropriate course is to fix a higher limit that fairly reflects the nature of this case and the issues to be dealt with on the appeal. As there is another item dealing with counsel's fees including preparation I have only taken into account in regard to item 23(b) the work I consider would necessarily be undertaken by solicitors in preparing for this appeal. In my view, the upper limit should be raised to 180 hours.
Item 23(e) relates to 'An application in an appeal, an interlocutory or directions hearing before a single Judge or Registrar'. The maximum scale is 10 hours or $3,410 based upon the rate for junior counsel. There were directions hearings in this matter. They were not by any means unduly difficult or complex. They did not deal with substantive issues. They related only to programming matters. In these circumstances there is no basis for removing or modifying item 23(e).
Item 23(f) relates to 'Getting up appeal for hearing'. This item allows for 10 hours by a senior practitioner to a maximum of $4,290. The costs said to have been incurred by the respondents in respect of this item are the same as those that have already been referred to in respect of item 23(b). As I have already allowed for a lifting or that scale item there is no need to remove or vary item 23(f).
Item 23(g) relates to 'Counsel fee on hearing (including preparation)' and allows for two days preparation and one day of hearing by junior counsel for a total amount of $10,230. Item 23(h) is in similar terms and relates to senior counsel and to a total amount of $18,150. Item 23(i) and 23(j) provide for second and subsequent days of hearing and a rate of $3,410 per day for junior counsel and $6,050 a day for senior counsel. The rate for senior counsel has to be read subject to cl 7 of the Accused's Costs Determination.
As regards preparation time, it is clear that the time actually spent by counsel on this matter far exceeded that allowed for in the scale. A significant proportion of that time must have been expended on the notice of contention. However, I accept that two days preparation time for counsel would not be adequate to prepare for a response to this appeal.
Again, I do not consider it appropriate to simply remove the limit. This would leave a taxing officer with the difficult task of trying to determine what proportion of the time actually expended could properly be claimed. Furthermore, I am in a position to make an assessment of how much work could reasonably be undertaken to prepare for this appeal. In my assessment, the maximum limit for preparation time should be raised to 9 days. This applies both to senior and junior counsel. This takes into account that there was some division of work between counsel.
In regards to the limits for daily hearing fees it is suggested in Mr Billing's affidavit that it was not practicable to obtain senior counsel or junior counsel at the scale rates in respect of this matter. He refers to the long hours that counsel worked, the complexity of the issues and the fact that the same counsel had been engaged in the Magistrates Court. None of these matters in themselves justifies a removal of the scale rate. I note that the scale rate is not one that relates only to single judge appeals under the Criminal Appeals Act but to all contentious business in the Supreme Court. Placed in the context of the work of the court as a whole this matter could not be said to be remarkably complex. I do not, therefore, accept that the nature of the case alone is such as to make the scale inadequate.
Furthermore, the Contentious Business Determination became operational on 1 July 2010 and it is unlikely that in such a relatively short time it has fallen significantly out of step with commercial realities in the legal profession. As noted earlier, the purpose of the scale is not to ensure that a successful party is completely indemnified but instead to provide reasonable compensation for costs incurred. As stated by Pullin J in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122(S); (2003) 28 WAR 95 [22], 'A party is always entitled to the luxury of retaining the highest paid practitioners in the conduct of their case, but they cannot always expect to recover these costs from the other party'. On the evidence before me I am not satisfied that the daily rates for counsel set out in the Contentious Business Determination are insufficient in the circumstances of this case.
Nature of the orders
The respondents seek an order that their allowable costs be assessed by a taxing officer. The appellant has not opposed an order in those terms. There may, however, be a question of whether such an order can be made given the terms of s 9(a) of the Accused's Costs Act.
Section 9(a) of the Accused's Costs Act provides that where costs are ordered under the Act a registrar of the court shall give the successful party a certificate showing the amount of costs ordered. On production of the certificate to the Treasurer the person is to be paid such costs from the Consolidated Account. This raises the issue of whether an order can be made for the issue of a certificate where the amount of costs has yet to be determined.
In my view it is possible to make orders in the form sought. This is because it is implicit that the certificate will not issue until the amount has been quantified. There is nothing in the Accused's Costs Act to suggest that, in an appropriate case, the assessment of costs could not be referred to a taxing officer. Indeed, s 8 (which refers to adjourning the question of the amount of costs to chambers) appears to contemplate that the amount of costs may need to be separately determined. It is appropriate in this case for that determination to be undertaken by a taxing officer.
Conclusion
For the above reasons the following orders will be made:
1.The respondents be granted a certificate pursuant to s 9 of the Official Prosecutions (Accused's Costs) Act 1973 for the costs of the appeal, including the costs of the application for leave to appeal and including any reserved costs but not including the costs of the notice of contention.
2.The quantum of the respondents' costs are to be assessed by a taxing officer, including the costs of the application for leave to appeal and any reserved costs.
3.The limits of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 be varied as follows:
(i)item 23(b) be increased to 180 hours;
(ii)item 23(g) be increased to 9 days preparation;
(iii)item 23(h) be increased to 9 days preparation.
4.There be a certificate for the transcript.
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