RailCorp v Transport Appeal Boards & Anor

[2009] NSWSC 195

CITATION:	RailCorp v Transport Appeal Boards & Anor [2009] NSWSC 195
HEARING DATE(S):	19/3/09
JUDGMENT DATE :	27 March 2009
JURISDICTION:	Common Law Division Administrative Law List
JUDGMENT OF:	Kirby J
DECISION:	(1) The Summons issued on behalf of RailCorp on 17 December 2008 is dismissed. (2) Since there was no appearance for either defendant, there is no order as to costs.
CATCHWORDS:	Administrative Law - appeal from decision of Transport Appeal Boards to reinstate RailCorp employee - judicial review - grounds of review - error of law in exercising discretion - Wednesbury unreasonableness - examining reasons given by lay tribunal - failure to take account of relevant considerations - irrelevant considerations - procedural fairness.
LEGISLATION CITED:	Transport Appeal Boards Act 1980 Rail Safety Act 2002 Rail Safety (Drug & Alcohol Testing) Regulation 2003 Crimes (Sentencing Procedure) Act 1999
CATEGORY:	Principal judgment
CASES CITED:	Briginshaw v Briginshaw (1938) 60 CLR 336 Zattin v Rail Corporation New South Wales [2005] NSWSC 1265 House v The King (1936) 55 CLR 499 Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223 Minister for Immigration and Ethnic Affairs v Maitan (1988) 78 ALR 419 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 82 ALJR 1425 Brimbella Pty Limited v Mosman Municipal Council (1985) 79 LGERA 367
PARTIES:	Rail Corporation New South Wales (Pl) Transport Appeal Boards (1 Def) David Pegler (2 Def)
FILE NUMBER(S):	SC 2008/30149
COUNSEL:	P Newall (Pl) Unrepresented (1 & 2 Defs)
SOLICITORS:	Moray & Agnew Solicitors (Pl) Submitting Appearance (1 & 2 Defs)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

KIRBY J

Friday 27 March 2009

2008/30149 RAIL CORPORATION NEW SOUTH WALES v TRANSPORT APPEAL BOARDS & David PEGLER

JUDGMENT

1 KIRBY J: On 1 September 2008 the Transport Appeal Boards (“the Board”) heard an appeal by David Pegler against his dismissal by Rail Corporation New South Wales (“RailCorp”). The appeal was brought under the Transport Appeal Boards Act 1980, where the Board is given broad powers in respect of appeals which it hears. Section 23 is in these terms:

“s 23 Decisions on appeals
(1) A Board may, in relation to an appeal, decide to allow or disallow the appeal or make such other decision with respect to the appeal as it thinks fit.
(2) The decision of a Board in respect of an appeal is final and is to be given effect to by the Authority against whose decision the appeal was made.”

2 The Board announced its decision on the day of the hearing and, on 11 September 2008, provided formal reasons for allowing the appeal. It made the following orders:

“(1) The decision to dismiss Mr Pegler is set aside.
(2) The appellant will serve a period of suspension without pay from the date of his dismissal, 1 July 2008, up to and including 6 September 2008.
(3) The appellant will be eligible to return to work in his previous substantive position of Area Controller 2 on and from 7 September 2008.
(4) The appellant is to be subjected to targeted alcohol testing for a period of 12 months from 7 September 2008.
(5) The appellant is required to resume a program of alcohol counselling with a counsellor of his choice, at his own expense, and the results must be communicated to the appropriate officer in the HR Department of RailCorp.”

3 By Summons issued on 17 December 2008, RailCorp seeks to set aside such orders and have the matter remitted to the Board to be determined according to law.

4 Before dealing with the complaints against the Board’s decision, I should set out the circumstances giving rise to the appeal.

The offence.

5 Mr David Pegler was born in September 1967. He joined the railways on 23 August 1984, when he was almost 17. He thereafter worked in various aspects of signalling, progressing through the grades. By December 2007, Mr Pegler held the position of Area Controller at Broadmeadow, Centralised Train Control. The job description of that position identified his responsibilities in these words:

“Area Controllers are responsible for the control and supervision of train, locomotive and traffic movements in accordance with safeworking regulations, the operation of signalling equipment and coordinating train movements within their area of control. This requires substantial judgement where decisions have to be made immediately. These decisions affect the safe and on-time movement of all train services. Importantly, Area Controllers are required to make decisions in accordance with safeworking practices whilst endeavouring to meet business objectives. Decisions regarding prioritising and allocating access for track maintenance are within the responsibility of the Area Controller in consultation with the Train Controller.
Area Controllers will frequently encounter emergency situations, and will often be required to deal with multiple contingencies within (their) area of control where a quick and efficient response to the enormous communication and safety demands will be essential to avoid or minimise train delays.”

6 Such work was classified as “railway safety work” within the meaning of s 4 of the Rail Safety Act 2002, being work involving “the development, management and monitoring of safeworking systems for railways”. Under the Act, RailCorp must ensure that all railway employees and contractors who perform “railway safety work” are not under the influence of alcohol or drugs (s 42(1)(b)). Mr Pegler, when giving evidence, acknowledged that he understood that he was engaged in “rail safety work” (T 14).

7 RailCorp promulgated a Code of Conduct to be observed by its employees, including Mr Pegler. It dealt with, amongst other things, occupational, health and safety issues. An aspect of its policy concerned drugs and alcohol and, relevantly, was in these terms:

“RailCorp is a drug and alcohol free workplace. All employees are required to be drug and alcohol free whilst at work.
A drug and alcohol free workforce is defined as:

· For Alcohol: Less that 0.02% blood alcohol concentration, and ...”

8 The policy continued:

“An employee, contractor or consultant reporting to work or undertaking work with drug and/or alcohol levels above these standards will be subject to counselling and/or discipline action. Serious or ongoing breaches may result in dismissal.
Employees who undertake railway safety work with a drug or alcohol level above these standards may also be in breach of the Rail Safety (Drug and Alcohol Testing) Regulation 2003 and may be subject to prosecution action in a court of law.
It is an employee’s responsibility to ensure that they are drug and alcohol free at work.”

9 Again, Mr Pegler acknowledged that he was familiar with that policy.

10 RailCorp, as part of that policy, performed random breath tests in accordance with the Rail Safety (Drug and Alcohol Testing) Regulation 2003. On 8 December 2007, Mr Whitmore, an investigator with RailCorp, attended Broadmeadow and asked Mr Pegler to undertake a test. He used a device known as an Alcolizer LE. The test returned a positive reading, 0.033 grams of alcohol per 100 millilitres of blood. Mr Whitmore, in his statement, made the following observation concerning Mr Pegler at the time he administered this test and spoke to him:

“7. While speaking with Pegler I could not smell any intoxicating liquor on his breath, both his eyes and his complexion appeared normal. I noted Pegler’s speech and movements also appeared normal.”

11 Having returned a positive reading, Mr Whitmore asked Mr Pegler to accompany him to the Waratah Police Station, where the test was repeated on an instrument known as the Drager Alcotest 7110. That instrument was described by Professor Starmer, an honorary Associate Professor of Pharmacology from Sydney University, as “a highly accurate and reliable instrument”. The test began at 5.05 pm and returned a reading of 0.015 grams per 100 millilitres of blood. Before arriving at the police station, Investigator Whitemore interviewed Mr Pegler, making contemporaneous notes. The interview included the following:

“I said: What have you had to drink in the last 24 hours?
Pegler said: I had between eight to twelve schooners of Toohey’s New Beer.
I said: When did you finish drinking?
Pegler said: About between 8.00 and 9.00 last night.

I said: What kind of alcoholic drink did you consume?

Pegler said: Full strength beer.
I said: How many alcoholic drinks did you consume?
Pegler said: Somewhere between eight to twelve.
I said: What size alcoholic drink did you consume?
Pegler said: They were Schooners.
I said: Where did you consume these drinks?
Pegler said: At Hamilton RSL, it was the work Christmas Party.
I said: With whom did you consume these drinks?
Pegler said: With some of my work colleagues.
I said: Have you consumed any alcohol in the last twenty minutes?
Pegler said: No!
I said: Have you consumed any alcohol since you started work?
Pegler said: No!”

12 Mr Pegler added that he drove to work. In his evidence before the Board, he said that he was surprised by the test. Indeed, he asked the investigator whether the machine had been calibrated (T 13).

13 Professor Starmer carried out various calculations to determine the amount of alcohol consumed the evening before. Working backwards from the reading obtained by the police at 5.05 pm (0.015 g/100 ml), and making a number of assumptions including the rate at which the alcohol had been eliminated over time, Professor Starmer thought it likely that Mr Pegler had consumed at least 13 schooners (in contrast to his estimate of between 8 and 12). That is not a large discrepancy. Professor Starmer, indeed, acknowledged that Mr Pegler’s blood/alcohol reading on the estimate he gave was “within the estimated range” that you would expect for that consumption (Report p 2). That said, Mr Pegler acknowledged in cross examination that most definitely the Christmas party was “a big night out” (T 16). He also said this: (T 12)

“Q. Mr Pegler can I ask you who do you see at fault for the occurrence of the events on 8 December last year when you were at work?
A. It was totally my own fault. I obviously miscalculated the amount of alcohol I had consumed over the six hour period and obviously (not transcribable).”

14 In cross examination Mr Pegler also acknowledged that, under the arrangements at the workplace, he could have advised his manager that he may not be alcohol free (T 20). He then said this: (T 20)

“Q. You did not do that in December 2007 did you?
A. No Sir. Well at the time I didn’t think that it would have had any residual effects.”

15 Later, Mr Pegler gave the following further evidence: (T 21)

“Q. Why? But you are saying that you thought you were safe?
A. Well I can only rely on my own ability to judge myself.
Q. But you had no doubt that you were safe did you?
A. Well I didn’t think there would be any possibility no.”

16 Ultimately Mr Pegler was called upon to give reasons why he should not be dismissed. He wrote a letter on 2 June 2008, which included the following:

“In my 23 year railway career I have been breath tested on many occasions whether signing on duty or post incident and yet this is the first time I have ever returned a positive result.
Based on the training provided I performed a self assessment and found myself coherent and capable to do my work therefore it was not my intention to present for work on the afternoon of the 8th of December 2007 over the legal limit of 0.02 blood alcohol level. I realise now without the aid of specialised detecting devices that a self assessment is not a reliable indicator to someone being alcohol free. Detecting devices have never been readily available but as a safety precaution if provided would ensure any worker including myself could detect accurately the level of alcohol in the blood, therefore I would like to state it was never my intention to work with more than the prescribed limit of alcohol. My intent has always been to comply with Railcorps Drug and Alcohol policy. To the fullest of my knowledge at that stage I was neither being negligent nor endangering anybody.”

17 Mr Pegler’s shift began at 2.00pm on Saturday 8 December 2007, that is, some 17 hours after Mr Pegler said that he left the RSL Club. He was first tested at 4.10pm (0.033 g/100 ml) and then at the police station at 5.05pm (0.015 g/100 ml). Making a number of assumptions, including the rate at which he was metabolising alcohol, Associate Professor Starmer calculated that the blood alcohol concentration at the beginning of the shift would have been in the range 0.046 to 0.093 g/100 ml. Professor Starmer stated that the likely rate would have been 0.062 g/100 ml, being the average. It may even have been higher, given that Mr Pegler’s alcohol elimination rate appeared to be at the upper end of normal (report p 3).

18 Professor Starmer was not required for cross examination. It was plain, nonetheless, from his report, that a number of his calculations involved assumptions, which may or may not be right. It may safely be assumed, approaching the matter conservatively (cf Briginshaw v Briginshaw (1938) 60 CLR 336), that, when Mr Pegler began work at 2.00pm, he was not less than 0.05 g/100 ml, in contrast to the requirement under the Code of Conduct that he be no more than 0.02 g/100 ml. He may indeed have been even higher, as calculated by Professor Starmer. There is no question that his job involved the safety of train traffic and its personnel, as well as the general public at level crossings. There were good reasons for the insistence upon a drug and alcohol free workplace. Errors of judgment may have catastrophic consequences.

19 Mr Pegler, upon completion of testing, was taken to the office of the Network Operations Superintendent. He was required to surrender his certificate of competency card and was removed from rail safety work. Mr Whitmore recorded the following:

“17. Pegler was remorseful and upset but cooperative throughout the procedure and complied with all requisitions that were placed upon him.”

20 There then began the disciplinary process. Mr Pegler was notified by letter of the breach and warned that he would be disciplined. The Investigator with the Workforce Conduct Unit found the allegation substantiated. He forwarded a report to the Disciplinary Review Panel. The panel noted that Mr Pegler had a long service history and no previous breach. Indeed, he had not been the subject of disciplinary action. On the other hand, the panel was concerned with the possible high reading at the commencement of the shift.

21 On 6 May 2008, a letter was sent to Mr Pegler informing him that the panel had determined a preliminary view that he should be dismissed. Before coming to its final decision, it sought his response. Mr Pegler wrote on 2 June 2008, acknowledging the breach. He said this:

“After my suspension from rail safety work on the 8th of December 2007 I have tried to the best of my knowledge to redress the situation by completing the counselling provided by Human Resources. My counsellor Harrison Whitecloud ... informed me though I was possibly drinking at risky levels he didn’t deem me to be dependant. I am currently receiving support from the Employees Assistance Program through my counsellor O. J. Farquharson ... and joined Alcoholics Anonymous to address the current situation I find myself in and am willing to submit myself to any plan of rehabilitation as prescribed by Railcorp.
I am married with two young school aged children and find that my actions in this matter have not only affected my career but are impacting on my marriage as well as my family and I would like to apologise and express my deep regret for the situation in which I find myself.
My aim with this response is to demonstrate that I wish to comply with any attainable standard you deem necessary.”

22 The Disciplinary Review Panel sat on 30 June 2008 and resolved to dismiss Mr Pegler, effective from 1 July 2008. Mr Pegler thereafter lodged an appeal.

The appeal.

23 Mr Bruce Miles of counsel appeared for RailCorp before the Transport Appeal Boards (“the Board”). Mr Nawar (a union representative) appeared for Mr Pegler. Counsel for RailCorp had prepared detailed submissions in advance of the hearing. Within those submissions he identified the issues for the Board in these terms:

“7. There are only two issues for the Board to determine
(a) Whether dismissal was disproportionate to the seriousness of the Appellant’s misconduct.
(b) Whether there is anything in the personal circumstances and economic situation of the Appellant that would warrant the Appeal being upheld.”

24 Counsel opened to the Board, emphasising the broad nature of its discretion. One witness was called for RailCorp, Mr Miller, the Network Operations Superintendent for Newcastle. He gave evidence concerning the duties of the Area Manager. It was a responsible position involving the safety of other employees and members of the public. Mr Miller also gave the following evidence concerning his personal assessment of Mr Pegler: (T 18)

“Q. Can I ask you what your personal assessment is based on what you have witnessed yourself of Mr Pegler’s work habits?
A. I have never had any reason to issue any infringements on Mr Pegler through late running or anything else that might take place within the signal box.
Q. Is it fair to say that we acknowledge your position – sorry as such the one that you are in – you know an understanding of at times or an awareness of someone who may be good at their job is indicative for a day to day dealings with that person?
A. I have always found Mr Pegler quite capable in his position.”

25 The appellant, Mr Pegler, then gave evidence. He had pleaded guilty to the offence. He explained that, in September 2004 through to June 2007, he had been seconded by the Australian Rail Track Corporation. He had opted not to transfer to that corporation, but had remained with RailCorp. It was a stressful time where he was made to feel a pariah and largely ignored. He now recognised that he had been drinking more alcohol during that period than was normal for him. In cross examination, Mr Pegler also acknowledged he had a difficulty in respect of “family matters” in 1999. The nature of the issue was not explored, apart from the fact that it had nothing to do with work (T 22). However, he did see a doctor who, in view of his work, required him to abstain from alcohol consumption for a time.

26 In April 2007, Mr Pegler accepted a position at the Broadmeadow signalling complex with RailCorp and his future appeared settled and promising. He was asked the following: (T 12)

“Q. Can I ask you what assurance would you give the Board that this would never occur again?
A. Well the only assurance I can give is that my family does come first and I place that more highly than alcohol for sure.”

27 He later added: (T 13/14)

“Q. Mr Pegler can I please ask you whether there is anything else you would like to tell the Board in your own words and maybe take into account and explain to the Board that – the genuine sorry or regret that you have (not transcribable).
A. Well it is pretty hard. There is no real words to describe how sorry I am for this incident. I personally believed it was (not transcribable) alcohol. It had been 17 hours since my last drink. Like I say my family does come first and this would never happen again .”

(emphasis added)

28 Evidence was also called concerning Mr Pegler’s character and personal circumstances. Mr Mounter, a former RailCorp employee, gave evidence that he is now working as a security guard for a university. He had known Mr Pegler for about 30 years, having met him at school. Mr Pegler was a good friend and extremely reliable. He was dedicated to his family.

29 A number of character references were tendered, mainly from work colleagues, all of whom spoke well of Mr Pegler, describing him as “conscientious, dependable” and a man “dedicated to his family”. One letter described him as one of the safest signallers he had known. His wife also provided a reference, which included these words:

“David is extremely regretful and stressed by the events on 8/12/07 but I can assure you they were not intentional whatsoever. David is a wonderful husband, father and main provider for our family.
Our future at this time in our life is in great doubt and we had such hopes and dreams for ourselves and especially Joseph and Shannon’s. Joseph and Shannon are in talented and gifted children’s classes. ... ”

30 She added:

“ ... David and I are very concerned for their futures because we feel it will be extremely difficult for David to get any future employment at only the age of 40 with a one off history of being dismissed from a 23 year career and the circumstances surrounding his dismissal.
David and I live a very simple life and spend most of our spare time pottering around our house and garden with each other and David and I and the children are (really) feeling the strain at the moment not just financially but mentally.
I can assure you David has followed every instruction from his employer since this incident has happened. He has attended alcohol and drug testing, (counselling) and meetings with his case manager and as David’s wife I can say David does not have an alcohol problem.”
(emphasis added)

31 Having heard submissions, the Board adjourned to consider its decision. It then resumed and announced that decision in an abbreviated form, later delivering more detailed reasons. The words of the Chairperson, recorded on the day of the hearing, after the Board’s deliberations, were as follows: (T 37/38)

“CHAIRPERSON: The Board has considered in depth the submissions made and all the evidence before it. The Board knows that the appellant has pleaded guilty to the allegation that was brought against him. The Board also notes the testing process and the disciplinary investigation were conducted in a fair and proper manner and that the appellant was afforded natural justice throughout the process. The Board also accepts and indeed recognises the seriousness of the offence, the potential of compromising the health, safety and well being of himself, his fellow officers and staff at rail, contractors and above all the general and travelling public.
The Board acknowledges that RailCorp acted appropriately throughout and that it was fully entitled to impose the penalty of dismissal. The Board also accepts that the appellant is remorseful and accepts his expressions of remorse as genuine. He is a man of 40 years of age with a wife and two children. He has been a rail employee for almost 24 years and had no disciplinary issues recorded against him in that time. He is held in high regard by many of his work colleagues. The question for the Board as clearly put to it has essentially been, is there a risk if he is put back that he will offend again in a like manner. The Board has agonised over this question and on balancing all of the factors on such an equation we have come to the view that he should be given a chance to prove this incident was indeed one off, an aberration and will never happen again.
Therefore Mr Pegler the Board will order your reinstatement with conditions. This is a substantial leap of faith by the Board but is one we are prepared to make given your long and satisfactory work history, your supportive and indeed dependent family, and our assessment that you can be trusted not to offend again in a similar fashion. Of course if that was to happen you simply would not have a leg to stand on and you could expect no sympathy or future leniency.
Therefore, the Board orders the following:
Firstly, the decision to dismiss the appellant be set aside.
Secondly, the appellant will serve a time of suspension without pay on and from the date of his dismissal, being 1 July 2008 up to and including 6 September 2008.
Thirdly, the appellant will be entitled – will be eligible to return to work in his previous substantive position as area controller level 2 on and from 7 September 2008.
Fourthly, the appellant will be subject to targeted alcohol testing for a period of 12 months from 7 September 2008; and
Fifthly and finally, the appellant is required to resume a program of alcohol counselling with a counsellor of his choice and at his own expense and the results must be communicated by that counsellor to the appropriate officer in the HR Department of RailCorp.”

32 The formal decision was published on 11 September 2008.

The Summons seeking relief.

33 The Summons issued by RailCorp asserted jurisdictional error and/or errors of law on the face of the record, warranting the intervention of this Court in its supervisory jurisdiction (cf Zattin v Rail Corporation New South Wales [2005] NSWSC 1265, per Johnson J at [9]-[11]). The errors identified were as follows:

“(a) The First Defendant’s decision was an error of law in that it was so great an error of discretion, in the sense contemplated in House v R (1936) 55 CLR 499, as to render it reviewable and correctable by a supervisory court. In particular:
(i) the First Defendant’s decision, in the face of accepted evidence that the Second Defendant had exceeded the prescribed level of blood alcohol whilst at work in a Rail Safety position, was so great an error of discretion as to render it reviewable and correctable by a supervisory court; and/or
(ii) the First Defendant’s decision, in the face of accepted evidence that the consequences of an employee in the position held by the Second Defendant being affected by alcohol at work were potentially catastrophic and life threatening, was so great an error of discretion as to render it reviewable and correctable by a supervisory court; and/or
(iii) the First Defendant’s decision, in the face of its own finding that the Plaintiff ‘was fully entitled to impose the penalty of dismissal’ , and absent evidence to render another penalty more appropriate, was so great an error of discretion as to render it reviewable and correctable by a supervisory court; and/or
(iv) the First Defendant’s decision to reinstate the Second Defendant for the purpose of giving the Second Defendant ‘a chance to prove that this incident was a one off, an aberration that will never happen again’ , in the face of the First Defendant being made aware of the Plaintiff’s statutory obligation to ensure a safe workplace pursuant to s 42(1)(b) of the Rail Safety Act 2002, was an error of law in that it was so great an error of discretion, as to render it reviewable and correctable by a supervisory court; and/or
(v) the First Defendant’s decision to reinstate the Second Defendant for the purpose of giving the Second Defendant ‘a chance to prove that this incident was a one off, an aberration that will never happen again’, in the face of the First Defendant’s finding that ‘The offence was serious, the potential for compromising the health, safety and well being of himself, his fellow officers and staff at rail, contractors and the general travelling public are the prime reasons for the Drug and Alcohol Policy and the provisions of the Code of Practice’, together with its knowledge of the Plaintiff’s statutory obligations, was so great an error of discretion, as to render it reviewable and correctable by a supervisory court; and/or
(vi) the First Defendant erred at law in the exercise of its discretion, in that it took into account an irrelevant consideration, that being its subjective opinion that the Second Defendant could be ‘trusted not to offend again in a similar fashion’ , which opinion was formed in the absence of any evidence before the First Defendant to support that opinion; and/or
(vii) the First Defendant erred at law in the exercise of its discretion, in that it failed to take into account a relevant consideration, that being that there had been no evidence brought before the First Defendant to support the proposition that the Second Defendant could be ‘trusted not to offend again in a similar fashion’.
(b) The First Defendant erred at law in that it did not afford the Plaintiff procedural fairness. In particular:
(i) the First Defendant at no time made the Plaintiff aware that it intended to determine the matter on the basis of the First Defendant’s subjective view that the Second Defendant ‘could be trusted not to offend again in a similar fashion’ , and so did not permit that proposition to be tested or argued; and/or
(ii) the First Defendant at no time made the Plaintiff aware that it intended to determine the matter on the basis that the First Defendant intended to or might make a ‘leap of faith’ , as it expressed itself in its decision to have done, in relation to the proposition that the Second Defendant ‘could be trusted not to offend again in a similar fashion’ and so did not permit the question of that ‘leap of faith’ to be tested or argued.
(c) The decision of the First Defendant was an error of law in that it was so unreasonable that no reasonable authority could ever have come to it.”

34 Mr Newall of counsel appeared for RailCorp. He prepared lengthy and helpful written submissions. There was no appearance for the Board or Mr Pegler. Each filed a submitting appearance.

35 Let me turn to the suggested errors.

Wednesbury unreasonableness.

36 The Summons referred to the classic statement in respect of errors of law in the exercise of a discretion in House v The King (1936) 55 CLR 499. In that case, Dixon, Evatt and McTiernan JJ said this: (at 505)

“ ... It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. ... ”

37 At the end of this passage, their Honours referred to the circumstances in which error may be imputed, that is where the result was unreasonable or plainly unjust upon the facts proved. The same concept was discussed by Lord Greene MR in Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223, where the following was said: (at 230)

“ ... Here Mr Gallop did not, I think, suggest that the council were directing their mind to a purely extraneous and irrelevant matter, but he based his argument on the word ‘unreasonable’, which he treated as an independent ground for attacking the decision of the authority; but once it is conceded, as it must be conceded in this case, that the particular subject-matter dealt with by this condition was one which it was competent for the authority to consider, there, in my opinion, is an end of the case. Once that is granted, Mr Gallop is bound to say that the decision of the authority is wrong because it is unreasonable, and in saying that he is really saying that the ultimate arbiter of what is and is not reasonable is the court and not the local authority. It is just there, it seems to me, that the argument breaks down. It is clear that the local authority are entrusted by Parliament with the decision on a matter which the knowledge and experience of that authority can best be trusted to deal with. The subject-matter with which the condition deals is one relevant for its consideration. They have considered it and come to a decision upon it. ... ”

38 His Lordship then stated the exception, where a Court would intervene, now sometimes referred to as “Wednesbury unreasonableness”. His Lordship said this: (at 230)

“ ... It is true to say that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is quite right; but to prove a case of that kind would require something overwhelming , and, in this case, the facts do not come anywhere near anything of that kind. I think Mr Gallop in the end agreed that his proposition that the decision of the local authority can be upset if it is proved to be unreasonable, really meant that it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body could have come to. It is not what the court considers unreasonable, a different thing altogether. If it is what the court considers unreasonable, the court may very well have different views to that of a local authority on matters of high public policy of this kind. ... ”
(emphasis added)

39 Courts have been enjoined to exercise caution in applying this ground, lest they substitute the Court’s judgment on the merits for that of the decision-maker (Minister for Immigration and Ethnic Affairs v Maitan (1988) 78 ALR 419, per Beaumont and Gummow JJ at 427 - 429) (cf Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 82 ALJR 1425 at [190]). In Zattin v Rail Corporation NSW (supra), Johnson J said this:

“[15] ... The test for Wednesbury unreasonableness is stringent, and the decision must amount to an abuse of power or be so devoid of plausible justification that no reasonable person could have taken that course: Wyong Shire Council v MCC Energy Pty Limited [2005] NSWCA 86 at paragraph 79. ... ”

40 There is little, if any, difference between a number of the paragraphs in Ground (a) (especially (a)(i), (ii) and (iii)) and Ground (c), which is Wednesdbury unreasonableness. It is therefore convenient to begin at the end and consider Ground (c), that is, whether the decision was so unreasonable as to amount to error.

41 The argument of RailCorp essentially rested upon three pillars. The first was concerned with the circumstances of the offence, as to which there was no issue. Mr Pegler pleaded guilty. He did not challenge the readings that had been taken by the RailCorp investigator, or the police. He held a railsafe position. The consequences of mistake could be catastrophic. He well understood RailCorp’s drug and alcohol policy, which he had breached. It was plainly a very serious offence.

42 The second pillar concerns what may be termed Mr Pegler’s “subjective case”. The ultimate issue for the Board was whether the penalty of dismissal was appropriate and reasonable (RailCorp written submissions (WS) para [13]). An important consideration was Mr Pegler’s present state of sobriety (WS [42]). According to RailCorp, the evidence did nothing to dispel concerns about his consumption of alcohol. The circumstances of the breach suggested an excessive consumption of alcohol. He had a history which included the incident in 1999, where he was directed by a doctor to abstain from alcohol for a time. He had undergone counselling and rehabilitation after he failed the random breath test in December 2007, and yet none of his counsellors had been called to give evidence. Therefore, the Board, according to RailCorp, had no evidence concerning Mr Pegler’s drinking, apart from his assertions (WS [23]). Even his assurances were “nebulous”. Mr Pegler had repeatedly said words to the effect: “The only assurance I can give is that my family does come first and I value that more highly than alcohol for sure” (T 12).

43 The third pillar of the argument concentrated upon the language of the Board’s decision and the findings which it made. The Board accepted the seriousness of the offence. It accepted its potential to compromise safety, which could have catastrophic consequences. Importantly, it said this: (T 37)

“The Board acknowledged that RailCorp acted appropriately throughout and that it was fully entitled to impose the penalty of dismissal. ”
(emphasis added)

44 Therefore, the Board, according to RailCorp, accepted that dismissal was appropriate. In its written submissions, RailCorp said this: (WS [43])

“[43] ... If a penalty which the Tribunal regards as ‘appropriate’ and which the employer was ‘fully entitled’ to impose was imposed, then on the evidence in this case, there is no warrant for the Tribunal to substitute another penalty for that penalty at all. Fundamentally, there was no evidence warranting the substitution of another penalty for the ‘appropriate’ one imposed by the Plaintiff. No tribunal, and specifically not the First Defendant, properly exercising its discretion could have done that. To do so was a reviewable error.”

45 Alternatively, it was said that, even if the Board could have substituted another decision for that which was “appropriate”, it would require compelling evidence. Here there was none (WS [44]).

46 Why, having made a finding that RailCorp was fully entitled to dismiss Mr Pegler, did the Board not impose the penalty of dismissal? RailCorp, in submissions, drew attention to the following reasons provided by the Board, which it suggested were unacceptable: (T 37)

“ ... we have come to the view that he should be given a chance to prove this incident was indeed one off, an aberration and will never happen again.”
(emphasis added)

47 In the context of that statement, counsel for RailCorp said this: (WS [45])

“[45] Put squarely, it was grossly unjust and simply wrong of the First Defendant to determine, at all, the more so without any evidence supporting such an approach, that the Second Defendant ‘ought to be given a chance to prove that this incident was a one off’ when what is put at risk by such a decision is the safety of the travelling public and the Plaintiff’s employees. It is an error to require the Plaintiff to take that risk at all. ... ”

48 Further, RailCorp drew attention to the statement that followed, which was unsupported by any evidence (T 37/38):

“This is a substantial leap of faith by the Board but is one we are prepared to make given your long and satisfactory work history, your supportive and indeed dependent family, and our assessment that you can be trusted not to offend again in a similar fashion.”
(emphasis added)

49 These matters in combination, according to RailCorp, meant that the decision of the Board to reinstate Mr Pegler was “so unreasonable that no reasonable authority could ever have come to it” (WS [65]).

50 Let me examine each pillar of RailCorp’s argument, drawing attention to other evidence which was before the Board. Having done so, I will then consider whether RailCorp has demonstrated that the Board’s decision was so unreasonable that no reasonable authority could ever have come to it. The first pillar of the argument concerned the offence itself. The recital of facts by RailCorp, set out above, is accurate. Unquestionably it was a serious offence. But it was not an offence of drinking on the job, or drinking before going to work. It was not an intentional breach. It was a miscalculation after a Christmas party the night before. Mr Pegler’s “big night out” finished at least 17 hours before he was due to begin work on Saturday 8 December 2007. One infers that, after the party, he had slept. He gave evidence that he had lunch. One would assume he had also had breakfast. He believed, wrongly, that he was completely sober. He drove to work. There is no suggestion that he made any mistake in performing his duties that afternoon. When seen by Investigator Whitmore at 4.10 pm (two hours after he commenced his shift), he did not exhibit any of the usual signs of alcohol intoxication. He did not smell of alcohol. His eyes and complexion were clear. His speech and movements were normal. When confronted by the incontrovertible evidence that he was over the limit, he was upset and remorseful.

51 Let me move from that to the subjective case of Mr Pegler. His evidence, in my view, was not “nebulous”. He gave an unqualified assurance that “this would never happen again” (T 13/14) (supra para [27]). Nor, in my view, is it reasonable to expect him to call as witnesses the alcohol counsellors he had seen. Such an expectation may be reasonable in litigation before a court. This, however, was a disciplinary hearing in which, appropriately, there was a degree of informality. Mr Pegler was represented by a Union official. When he gave evidence, he repeated without objection what his counsellors had told him, that is, that he was not dependant upon alcohol although he had been drinking at risky levels. After his breach, he had undertaken rehabilitation, arranged by RailCorp. His programme envisaged assessment by RailCorp doctors and continuous reporting by the counsellors whom he saw. The letter from RailCorp to Mr Pegler of 23 January 2008, included these words: (Ex 3)

“Your counsellor, doctor and other providers will need to communicate and work closely with your Case Manager.
On-going drug/alcohol testing is part of the rehabilitation process.”

52 On 24 January 2008, Mr Pegler signed “an information release authority” which was as follows:

“I authorise the Human Resources department to obtain and/or provide verbal or written information relevant to my current medical condition, rehabilitation and return to work programs from or to:

· My treating Doctor,

· My Counsellor,

· My Case Manager and HR Representative, and

· Any other persons necessary to ensure the successful implementation of my Rehabilitation Program.”

53 Counsel for RailCorp acknowledged that his client would have received such reports. On the other hand, there is no reason to think that Mr Pegler would have been given a copy. Although Mr Pegler had the onus on the appeal, it would have been open to RailCorp, had they thought it appropriate, to place this material before the Board. One imagines they would have done so had it contradicted Mr Pegler’s account of what his counsellor had said, or cast doubt upon his assurance that he had learned his lesson.

54 Further, the assurance given by Mr Pegler was not unsupported, as suggested by RailCorp. Mr Pegler’s wife wrote a letter assuring the Board that her husband had followed every instruction of his employer since the incident. She ventured the opinion that he did not have an alcohol problem. RailCorp arranged for Mr Pegler to have a liver function test. On 17 January 2007, an organisation known as Health Solutions, advised that his blood test was “entirely normal showing no liver damage”. Dr Moss added, however, these words: (Ex 3)

“As we discussed, you still need to reduce your alcohol intake.”

55 It was also relevant that Mr Pegler had been working for RailCorp for 23 years. He had committed no disciplinary offence in that time. He had undertaken many random breath tests, and had never previously failed. The issue he had with alcohol in 1999 had arisen outside work, although he had been directed to abstain from alcohol for a time once he returned to work.

56 A further aspect of Mr Pegler’s subjective case was his likely future, were he dismissed. He was a man aged 40 years, married with two children. He had been working for the railways since the age of 17 years. His work was in an area, signalling, which would not readily translate into a job outside the railways. His wife, in these circumstances, made the following statement which was realistic:

“ ... David and I are very concerned for their futures because we feel it will be extremely difficult for David to get any future employment at only the age of 40 with a one off history of being dismissed from a 23 year career and the circumstances surrounding his dismissal.”

57 Let me move, finally, to the Board’s decision. What did the Board mean when it said that RailCorp “was fully entitled to impose the penalty of dismissal”? Does it mean, as RailCorp suggested, that the Board had accepted that dismissal was the appropriate penalty? I do not believe that it does. The Board’s reasons must be read as a whole. The Board’s statement must be read in conjunction with what follows, where the Board determined that a penalty other than dismissal was appropriate. It is possible that the Board may simply have been stating the maximum penalty, which is always a relevant guidepost when considering an appropriate penalty. When RailCorp first wrote to Mr Pegler on 18 December 2007, identifying the charge and warning of the “possible outcomes of the disciplinary process”, their letter said this:

“The possible outcomes of the disciplinary investigation are:
1. No further action required;
2. A caution or reprimand;
3. A fine;
4. Reduction in position, rank or grade and pay;
5. Suspension from duty without pay; and
6. Dismissal.”

58 However, I think it likely that the Board was saying that the decision of RailCorp was comprehensible, given its perspective. It was the employer. It had a Code of Conduct. The Code had been breached. There were safety implications. The breach was serious. It is understandable that in such circumstances, from an employer’s perspective, such matters should be given primacy, such that they may swamp considerations of a personal kind, including rehabilitation.

59 The Board well understood that it was reviewing RailCorp’s determination in the light of the material placed before it, and considering whether it was appropriate and reasonable. In the nature of things, the Board had a wider perspective and was in a position to view the matter with greater dispassion. It was constituted by three members, an independent Chairman who is a statutory appointment (s 5(1) Transport Appeal Boards Act), and two members drawn, respectively, from the Corporation and the relevant industrial union (Schedule 1: Pts 1 and 2 of the Act). The Board, in its decision, determined that dismissal was not the appropriate sanction.

60 The remaining passages from the judgment, which are the subject of criticism in the submissions of RailCorp, must be seen as the expression of reasons by a lay tribunal, not a court. In Brimbella Pty Limited v Mosman Municipal Council (1985) 79 LGERA 367, Kirby P (McHugh JA agreeing) said this:

“ ... I believe that it is undesirable in an appeal from a lay tribunal, where the appeal court is confined to a question of law, that it should examine too narrowly the words used in the decision, at least unless these words are central to the decision involved. Increasingly, courts have to review, on questions of law, expert specialist tribunals. Thus the Federal Court of Australia must review, on questions of law, decisions of the Administrative Appeals Tribunal. This Court has functions to review on questions of law the Government and Related Employees Appeals Tribunal, certain decisions of the Land and Environment Court and other bodies. There are powerful reasons of policy, quite apart from loyalty to the statutory language, that would suggest restraint in criticising the language used in their decisions by lay tribunals.
Here, the Parliament has specifically envisaged a tribunal which included lay assessors. It would be quite wrong, in my opinion, for this Court to examine their decisions as if they were written by a lawyer. I am not, by these comments, suggesting double standards; simply that the Court should take into proper account the composition of the tribunal, as it has been created by the Parliament.”

61 The Board recognised that it needed to address whether there was a risk that Mr Pegler would transgress again. It made “an assessment ... that you can be trusted not to offend again”. Although it used expressions such as: “he should be given a chance” and “substantial leap of faith”, the determination which the Board made was, in truth, no different from an assessment made by courts every day in the context of the imposition of penalties (cf Crimes (Sentencing Procedure) Act 1999, s 21A(3)(g) “The offender is unlikely to re-offend” and s 21A(3)(h) “The offender has good prospects of rehabilitation ... ”).

62 RailCorp has not established that the balance which the Board ultimately struck was “grossly unjust and simply wrong”. There is no substance in Ground (c) of the Summons, nor Grounds (a)(i), (ii), (iii). The decision of the Board was certainly open to it and, in my view, both reasonable and sensible.

63 However, that does not answer all the complaints made by RailCorp in its Summons. Let me therefore examine the remaining suggested errors of law.

Failure to take account of relevant considerations.

64 The Summons identified a matter where it suggested the Board was in error for having failed to take account of a relevant consideration. It failed to take account of the Corporation’s safety obligations, specifically s 42(1)(b) of the Rail Safety Act 2002, where it was obliged to ensure that no employee is under the influence of alcohol.

65 The written submissions furnished by RailCorp acknowledged that the Board referred to the issue of safety and the potential for harm to employees, contractors and the travelling public. It acknowledged that the Board took such matters into account, since it described itself as “agonising” when balancing such risks with other matters. Yet the Board, according to the Corporation, had to do more than pay lip service to these obligations. The decision they made demonstrated that the issue of safety had simply not been taken into account. This, according to the Corporation, is especially apparent in the Board’s decision to allow Mr Pegler to resume rail safety work.

66 I am unpersuaded by that argument. The Board was an expert panel. Each member was well aware of the safety issues that arose. They were reminded of those issues in the evidence placed before them and by the submissions of the parties. When the Chairman came to give judgment, he specifically referred to such matters. There is, I believe, no substance in Grounds (a)(iv) and (v).

The “no evidence” submission and irrelevant considerations.

67 RailCorp asserted, in Grounds (a)(vi) and (vii), that there was no evidence, or no satisfactory evidence, before the Board that Mr Pegler could be “trusted not to re-offend in the future”. The “leap of faith”, according to RailCorp, signified that the Board took into account irrelevant considerations. Again, I reject these grounds. As discussed in the context of the Wednesbury ground above, there was a body of evidence, including that from Mr Pegler, available to the Board when reaching its decision. The “leap of faith” was a judgment by the Board that Mr Pegler would be true to his word and not re-offend.

Failure to afford procedural fairness.

68 Finally the Corporation, in Grounds (b)(i) and (ii), complains that the Board failed to make the Corporation (through its advocate) aware of two matters:

· First, that the Board had formed the view that Mr Pegler could be trusted not to offend again.

· Secondly, that it proposed to take “a leap of faith” that Mr Pegler would not offend again in the future.

69 A central issue, explored in evidence and debated in submissions at the end of the evidence, was whether Mr Pegler might transgress again were he to return to work. Counsel for the Corporation, having reviewed the evidence, including Mr Pegler’s attendance at Alcoholics Anonymous and counselling, said this in his final submission: (T 36)

“We say based upon that the Board could not be satisfied that the appellant has taken steps to ensure that there will be no repetition of his conduct.”

70 Mr Nawar, appearing for Mr Pegler, answered these submissions by submitting to the contrary. He said: (T 37)

“He has given the Board the most valuable assurance that he will not (commit) this kind of offence. If there has been any doubt today, let it be known that that assurance is a commitment which he has given to his family who are present here today, and the obligation that he has to his children for the requirements for their upbringings. That in itself is the greatest amount of pressure he has on himself on a daily basis to ensure that he does not reoffend.”

71 There was no denial of procedural fairness. The Corporation was apprised of the issue which, through its counsel, it addressed. The Board was not required to announce, in advance of its decision, the findings that it would ultimately make.

72 I should, in this context, add a further comment. The Board, as part of its decision, determined that Mr Pegler was eligible to return to work from 7 September 2008 in his previous substantive position as Area Controller 2. Counsel for RailCorp, in the course of the hearing, stated that he had not yet done so. Instead, he had been diverted into non railway safety work and his rehabilitation has continued. The dismissal of this Summons now furnishes an opportunity to implement the determination of the Appeals Board.

Order.

73 In my view, there was no jurisdictional error or error of law. I therefore make the following orders:

1. The Summons issued on behalf of RailCorp on 17 December 2008 is dismissed.

2. Since there was no appearance for either defendant, there is no order as to costs.

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