Roo-Roofing Pty Ltd v Commonwealth (Ruling No 3)

Case •

[2018] VSC 232

•

11 May 2018
IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2015 03382

ROO-ROOFING PTY LTD (ACN 131 182 093) First Plaintiff
MATSUH PTY LTD (ACN 105 461 818) Second Plaintiff
v
THE COMMONWEALTH OF AUSTRALIA Defendant

---

JUDGE:

John Dixon J

WHERE HELD:

Melbourne

DATE OF HEARING:

9-10 May 2018

DATE OF RULING:

11 May 2018

CASE MAY BE CITED AS:

Roo-Roofing Pty Ltd v Commonwealth (Ruling No 3)

MEDIUM NEUTRAL CITATION:

[2018] VSC 232

---

EVIDENCE – Admissibility – Hearsay exceptions – Plaintiff seeks to tender prior out-of-court representations – Representations from statements made to Royal Commission  – Whether representations are relevant – Whether representations are admissions – Evidence Act 2008 (Vic) ss 55, 81, 87, 88, Dictionary Part 1.

---

APPEARANCES:

 Counsel Solicitors
For the Plaintiff Mr J D Delaney QC with
Dr C G Button, Ms C Van Proctor and Mr R Chaile 		ACA Lawyers
For the Defendant Ms R M Doyle SC with
Ms R L Enbom, Mr L T Brown and Mr J Hooper 		Australian Government Solicitor

HIS HONOUR:

  1. The plaintiffs’ apply pursuant to s 87 of the Evidence Act2008 (Vic) to tender material comprising extracts of evidence received by the Hanger Royal Commission that contain a number of out of court representations, asserted facts in respect of which the plaintiff does not propose to call the maker of the statement. A document described as a schedule of admissions that was used to identify these extracts is reproduced as Schedule A to these reasons. This schedule reveals a working summary, not the full text, of the material that is the subject of the tender.

  1. The contentions in respect of the representations fall into four categories. The defendant opposes the tender of certain of the representations. The tender of some other representations was not pressed and in four cases the decision to not press the tender of the representation was conditional on my ruling whether other representations should be included in the tender as reasonably necessary in order to understand the admission. In respect of a number of other representations, tender was not opposed by the defendant on the basis that further material providing essential context be included in the tender.

  1. In the context of the submissions I received, I will first identify the principles I will apply in ruling on the tender.

  1. Section 6DD of the Royal Commissions Act 1902 (Cth), that provides that statements made by a witness are not admissible in evidence against a natural person in any civil or criminal proceedings in any State court, is inapplicable.

  1. The first question is a threshold one for all evidence – whether it is relevant, to be determined in accordance with s 55 of the Evidence Act 2008 (the Act). Before that question may be answered, it is necessary to identify the purpose or purposes for which the evidence is tendered. The identification of its purpose may have important consequences.[1] The plaintiff identified the purpose of the tender to be proof of breach of the duty of care alleged.

    [1]IMM v The Queen (2016) 257 CLR 300, 312 [37].

  1. The defendant objected that many of the previous representations were irrelevant. The representation was not relevant to any matter in issue in the proceedings because it did not go to any matter alleged in the pleadings.

  1. The plaintiffs submitted that defendant’s view of relevance was too narrow - rather than a fact only being relevant if it is specifically pleaded, the requirement of s 55 was that it have the capacity to rationally affect (directly or indirectly) the assessment of the probability of a fact in issue in the proceeding.

  1. This definition directs attention to the capacity of the evidence to affect the assessment of the probability of the existence of a fact and not to its probative value. A ‘fact in issue’ is a fact which is to be determined as a matter of substantive law.

  1. As the plurality observed in IMM v The Queen:

There can be no doubt that the reference to the effect that the evidence "could" have on proof of a fact is a reference to the capability of the evidence to do so. The reference to its "rational" effect does not invite consideration of its veracity or the weight which might be accorded to it when findings come to be made by the ultimate finder of fact.[2]

[2]Ibid 312 [38].

  1. The fact in issue is ultimately whether the defendant was negligent in the manner alleged by the plaintiffs. Assuming a duty of care for present purposes, the issue is whether the defendant fell short of the standard of care expected of a prudent public service administration in the ways the plaintiffs alleged in paragraph 37 of their statement of claim.

  1. Briefly stated, the plaintiffs allege that the defendant breached its duty by negligently designing, implementing, and/or administering the HIP by:

(a)        Failing to institute or properly institute administrative procedures to identify the risks associated with the HIP;

(b)        Failing to acquire or properly acquire knowledge about the risks associated with the HIP;

(c)        Failing to act or properly act in response to the knowledge it acquired that injuries or deaths of installers was a primary risk of the HIP;

(d)       Failing to implement or properly institute procedures to monitor and manage the risks associated with the HIP;

(e)        Failing to implement or properly implement procedures to inform the Installers Eligible Businesses and/or the workers engaged by the Installers Eligible Businesses of the risks associated with the HIP;

(f)         Failing to ensure that the relevant State and Territory agency:

(i)         was aware of the risks associated with the HIP;

(ii)       was aware of the defendant’s reliance on the agency for the monitoring of the ’Installers’ Eligible Businesses compliance with Occupational Health and Safety requirements;

(iii)      monitored the Installers’ Eligible Businesses compliance with Occupational Health and Safety requirements;

(iv)      reported to the defendant the Installers’ Eligible Businesses’ compliance with Occupational Health and Safety requirements.

  1. The scope of each of these material facts is defined by detailed particulars that I need not set out here in full. The plaintiffs contended that the admissions could rationally affect the assessment of the probability of the existence of facts concerning particulars of breach such as, in brief summary, the DEWHA’s capacities, the implications of the change in model in relation to the risk that the change gave rise to, safety, training and supervision, the rollout of the HIP, the impact on and reliance of industry, and interactions with the States, as alleged and particularised.

  1. The plaintiffs emphasised what they defined as the ‘DEWHA Issues’:

DEWHA’s resources and capacity as well as the Commonwealth’s approach to identifying its capacity needs and capabilities are issues in the proceeding:

• 37(a) – particulars (1)(b) (lack of role clarity and accountability, and identification of core competencies needed), (1)(c) (lack of structured approach to identifying core competencies), (1)(e) (planning resources, accessing resources and skills) (4) (DEWHA inexperienced with delivery model), (5) (was under-resourced) and (9) (lacked risk management resources).

• 37(c) – particular (7) (knowledge of DEWHA lack of resources - skills, experience, funds)

  1. The findings of breach require assessment of the evidence led in support of, or against, these particulars and may involve inferential reasoning. Whether a piece of evidence has the capacity to rationally affect the proof of breach requires a minimal logical connection and whether such evidence is relevant depends on the whole of the case and cannot be determined in isolation from all other evidence.

  1. If the evidence is relevant, the asserted facts are excluded by the hearsay rule.[3] Section 87(1) of the Act relevantly provides an exception in the case of admissions in civil proceedings. In determining whether an asserted fact[4] may be taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that when the representation was made, the person had the authority to make it on behalf of the party, or the person was an employee of the party or had authority to act for the party and the representation related to a matter within the scope of the person’s employment or authority. The section reads:

    [3]Evidence Act 2008 (Vic), s 59 (1).

    [4]Evidence Act 2008 (Vic), s 59 (2).

87       Admissions made with authority

(1)For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that—

(a)when the representation was made, the person had authority to make statements on behalf of the party in relation to the matter with respect to which the representation was made; or

(b)when the representation was made, the person was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person's employment or authority; or

(c)the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party.

(2)For the purposes of this section, the hearsay rule does not apply to a previous representation made by a person that tends to prove—

(a)that the person had authority to make statements on behalf of another person in relation to a matter; or

(b)       that the person was an employee of another person or had         authority otherwise to act for another person; or

(c)       the scope of the person's employment or authority.

88 Proof of admissions

For the purpose of determining whether evidence of an admission is admissible, the court is to find that a particular person made the admission if it is reasonably open to find that he or she made the admission.

  1. Admissions are an exception to both the hearsay and opinion rules.

81Hearsay and opinion rules—exception for admissions and related representations

(1) The hearsay rule and the opinion rule do not apply to evidence of an admission.

(2) The hearsay rule and the opinion rule do not apply to evidence of a previous representation—

(a) that was made in relation to an admission at the time the admission was made, or shortly before or after that time; and

(b) to which it is reasonably necessary to refer in order to understand the admission.

  1. An ‘admission’ is defined in Part 1 of the Dictionary to the Act as:

a previous representation that is—

(a) made by a person who is or becomes a party to a proceeding (including an accused in a criminal proceeding); and

(b)       adverse to the person's interest in the outcome of the proceeding.

  1. The Act defines a representation to include:

(a)       an express or implied representation (whether oral or in writing); or

(b)       a representation to be inferred from conduct; or

(c) a representation not intended by its maker to be communicated to or seen by another person; or

(d)      a representation that for any reason is not communicated;

  1. A previous representation is a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.

  1. The defendant contended that it was not reasonably open to find that many previous representations made by witnesses at the Royal Commission were admissions by the defendant as they were not representations that were adverse to the defendant’s interests in the outcome of the proceeding.

  1. The plaintiffs submitted that the defendant’s conception of an admission was impermissibly narrow, because it asserted that only representations constituting an assertion of a primary fact can constitute an admission. Rather, admissions are not confined to primary facts, but can include ‘a conclusion from facts, a mixture of fact and law, or even of law’.[5] The defendant wrongly submitted that opinions, states of mind, and understandings are irrelevant or incapable of constituting a representation of fact and consequently an admission.

    [5]Jones v Sutherland Shire Council [1979] 2 NSWLR 206, 231 (Mahoney JA), citing Grey v Australia Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669, 684; Registrar of Aboriginal and Torres Strait Islander Corps v Ponto (2012) 208 FCR 346, 354-5 [46].

  1. The crux of the dispute between the parties was whether a representation was adverse to the interests of the defendant in the outcome of the trial. This issue was considered in R v GH.[6] GH was charged with perverting the course of justice.  The Crown case was that TF shot GH at close range at the Rebels motor cycle club.  GH told police officers that he had shot himself accidentally. The Crown contended these statements went to prove that GH had agreed to give a false and misleading account of his gunshot injury, so as to protect his co-accused TF from criminal prosecution. 

    [6](2000) 105 FCR 419.

  1. The statements were each clearly a previous representation and the question was whether the statements were ‘adverse to the person’s interest in the outcome of the proceeding.’ The Full Court held that each representation was not a representation that was adverse to GH’s interest in the outcome of the trial.

  1. Spender J said:

The essential requirement of the definition of “admission” in the Dictionary to the Act is that it is the representation itself which has to be adverse to the interests of the accused on his trial, not the surrounding circumstances or the state of mind of the maker at the time of the making of the representation. A statement which is exculpatory on its face is not a representation which is adverse to the interests of the accused: it is the addition of other circumstances which may import that quality. It is not the representation, but the proof of its untruth, which is or may be adverse.[7]

[7]Ibid 422 [16].

  1. Madgwick J said:

the definition of “admission” hinges on the nature of an out-of-court “representation that is ... adverse to the person's interest in the outcome of the proceeding”. It is the representation that must be adverse to that interest.… the core notion of a “representation” is that it should involve the intention to assert the existence of a fact.[8]

[8]Ibid 439 [75].

  1. The context and purpose of particular representations, when determining whether they were admissions,[9] was a Royal Commission, at which the witnesses were called to give evidence regarding the Commission’s terms of reference which encompassed a broad range of issues that did not necessarily correlate with the issues in this proceeding.

    [9]Hannaford v Australian Farm Link Pty Ltd [2008] FCA 1591 [223]-[224].

  1. If the maker of the representations did not intend to assert the existence of any particular fact, the defendant contended that such representations were not admissions.  The defendant submitted the representations identified were mostly expressions of opinions, recollections of a state of mind, or explanations of the maker’s understanding of events. The state of mind of any of the witnesses is not a fact in issue in the claims made against the defendant.  That may be so, but the state of knowledge of senior departmental offices may be relevant in assessing the probability of facts in issue.

  1. The core question was whether the representations reveal the intention to assert the existence of a fact (or opinion, state of knowledge or other state of mind) that is adverse to the defendant’s interest in the outcome of the proceeding. Relevantly, that inquiry is whether the fact asserted is adverse to the defendant’s denial that it was not in breach of any duty of care owed to the plaintiffs. The defendant asserted that to be adverse to the defendant’s interest in the outcome of these proceedings, the representations must, if true, be inconsistent with the defendant’s defence.

  1. What then is the test of whether a representation is adverse to the defendant’s interest in the outcome of the proceedings. Clearly, a statement that is exculpatory in the context of breach of duty will not be ‘adverse’ in the relevant sense, as R v GH made clear. As the defendant submitted, inconsistency with the defendant’s defence may reveal that a representation is adverse. Consistency with, or being relevant to proving the plaintiffs’ allegations, may also reveal that a representation is adverse to the defendant’s interest in the outcome of the proceeding.

  1. It may be accepted that, with certain of the representations, this contention was intertwined with the relevance objections. An irrelevant representation will not be adverse to the defendant’s interest in the outcome of the proceeding, but is the converse proposition helpful? A representation that is capable of rationally affecting (directly or indirectly) the assessment of the probability of the existence of a fact put in issue in the proceeding by the plaintiffs may have that capacity because it adds to or detracts from the relevant assessment of probabilities. It may be so lacking in probative value that it cannot be considered to be adverse or supportive.

  1. In IMM, the plurality observed:

Because evidence which is relevant has the capability to affect the assessment of the probability of the existence of a fact in issue, it is "probative". Therefore, evidence which is relevant according to s 55 and admissible under s 56 is, by definition, "probative". But neither s 55 nor s 56 requires that evidence be probative to a particular degree for it to be admissible. Evidence that is of only some, even slight, probative value will be prima facie admissible, just as it is at common law.

  1. In the present case, the ultimate issue defining relevance is complex, being breach of a duty of care and the conclusions to be reached will involve inferential reasoning that will involve assessment of the totality of the evidence. Evidence which presently appears, by reference to the pleadings, to have no, or very limited, probative value may be more persuasive when assessed in the context of the totality of the admissible evidence.

  1. In ruling on the admissibility of the evidence, the probative value of an adverse representation is not a relevant consideration. That is a matter for final submissions.

  1. In respect of some representations the admission of which was objected to, in the alternative if the representation was admitted, s 81(2) applied such that surrounding contextual material, identified by the defendant, was reasonably necessary to understand the context in which the admission was made and was also admissible.

  1. The defendant also submitted that a representation was not relevant to any matter in issue in the proceedings because the fact sought to be proved was not in issue or could reasonably be anticipated to be proven by tender of other evidence that constituted a more direct evidentiary source.

  1. The defendant contended that unless some realistic assessment is made of the adverse quality of a representation, the plaintiffs could continue to trawl through the evidence given to the Royal Commission and continue to present lists of representations that they contend are admissions. That is not a sufficient basis to introduce any assessment of probative value into the assessment of admissibility. Further, I have noted that the plaintiffs, apart from reserving their position in relation to a nominated particular witness whose statement is yet to be provided to them, eschewed any intention to do so. In any event, this proceeding has been subject to case management, the plaintiffs have opened their case and the trial is at day 12. The task of persuading me to exercise my discretion to permit a further application when all representations to be tendered as admissions ought to have been identified prior to the commencement of the trial is not becoming easier.

  1. In the discussion that follows, the representations, referred to as admissions to continue to adopt the nomenclature used by the parties in submissions, are grouped by reference to the witness who made the representations to the Royal Commission.

  1. For the reasons that follow, I rule that:

(a)        Tender of admissions 21, 23, 24, 31, 32, 33, 41 and 44 was not pressed by the plaintiff and those representations will not be admitted.

(b)        Tender of admissions 34, 35, 37, 38 and 43 was not opposed by the defendant and that tender will be permitted.

(c)        Tender of admissions 15, 42, 46, 47, 48, 49, 50 and 52 was not opposed by the defendant on the basis that further material providing essential context be included in the tender. This contention is considered later in these reasons.

(d)       The plaintiffs’ sought to submit that they did not press the tender of admissions 28, 46, 47 and 52 if I were to accede to the defendant’s submission that each representation ought be accompanied by further paragraphs as reasonably necessary context. The defendant disputed the plaintiff’s entitlement to do so, submitting that the plaintiffs needed to now elect if the admissions were pressed or not, and to abide by the consequence should an admission be permitted to be tendered with further necessary context. This contention is also considered later in these reasons.

(e)        On the remaining contentious representations, I have ruled that admissions 1 – 4, 7 - 9, 13, 14 -15 (with contextual material), 19, 20, 29, 36, 42 (with contextual material), 48 - 50 (each with contextual material) may be tendered and the tender of representations 5, 6, 10 - 12, 16 – 18, 22, 25 - 28, 30, 39, 40, 45 – 47, and 52 is refused.

Ross Carter

Admission 1

  1. The defendant submitted this was not an admission but an expression of Carter’s opinion concerning the level of resourcing of the Department in respect of the HIP, which was not adverse to the defendant’s interest in the outcome of the proceeding.  It was irrelevant because there is no pleaded allegation that the Department was under resourced or that under resourcing was either negligent in and of itself, or that it caused other alleged negligent conduct.

  1. I do not accept the defendant’s submission as to the characterisation of the representation. This representation was relevant to the DEWHA Issues. Accepting that DEWHA was under-resourced, did not have the right skill set for the HIP and struggled to get the right skill sets assembled in the time available, could rationally affect the assessment of the probability of a finding of breach of duty in the proceeding, particularly in the context of the DEWHA Issues. Such a representation is adverse to a finding that the defendant was not negligent as alleged.

  1. The tender of this admission will be permitted.

Admission 2

  1. The defendant objected on the same basis as given for Admission 1. The objection is rejected for like reasons. A representation that the level of resources and skill sets available to DEWHA, particularly but not only at an executive level, were not commensurate with the tasks allocated is both relevant and a representation that is adverse to a finding that the defendant was not negligent as alleged.

  1. The tender of this admission will be permitted.

Admission 3

  1. The defendant submitted this is not an admission as the expression of an opinion that staff were ‘overstretched’ and /or the statement that staff worked long hours does not constitute an admission adverse to the Defendant’s interest in the outcome of the proceeding.  I do not agree. Such a representation is adverse to a finding that the defendant was not negligent as alleged. Further, it is relevant as capable of rationally affecting the assessment of the probability of a finding of breach of duty in the proceeding, particularly in the context of the DEWHA Issues.

  1. The tender of this admission will be permitted.

Admission 7

  1. The defendant says this representation, which it does not dispute might constitute an admission, is irrelevant as there is no pleaded allegation that it was negligent to assign the HIP to the Department or that it was negligent to fail to assign the HIP to another department with different capabilities. I do not agree. If it be accepted that no assessment was made of DEWHA’s capability, including in relation to systems, processes and staff, when allocating the HIP to that department, that matter could rationally affect the assessment of the probability of a finding of breach of duty in the proceeding, particularly in the context of the DEWHA Issues.

  1. The tender of this admission will be permitted.

Admission 12

  1. The defendant submitted that this representation was not an admission and was irrelevant, as it was not part of the plaintiffs’ case that the selection of one delivery model over another was negligent. As a result, a representation that the Department had experience with one model and not another was not an admission adverse to the defendant’s interest in the outcome of the proceeding.

  1. Representing that DEWHA had experience in delivering programs using a model involving the outsourcing of the end-to-end service by a use of a lead contractor and that the Regional Model[10] for the HIP was of this kind, would not be a representation adverse to the defendant’s interest in the outcome of the proceeding. The representation is not an admission.

    [10]Referred to by Mr Carter as the “Proposed Business Model”.

  1. The tender of this admission is refused.

Admission 13

  1. The defendant submitted this representation, as evidence of Mr Carter’s state of mind, his concern, is not a representation adverse to the defendant’s interest in the outcome of the proceeding and is not an admission.  Further, it is irrelevant because his concerns about risks posed by the Direct Model or about the Department’s experience vis a vis the Direct Model cannot be relevant when it is not part of the Plaintiffs case that the selection of one delivery model over another was negligent.

  1. Unlike the previous admission, this representation could rationally affect the assessment of the probability of a finding of breach of duty in the proceeding, particularly in the context of the DEWHA Issues, and the attention directed at DEWHA’s lack of familiarity with the Direct Model in the context of the limitations of the risk assessment that was undertaken. The expression of that concern by key departmental officers is a representation adverse to the defendant’s interest in the outcome of the proceeding.

  1. The tender of this admission will be permitted.

Admission 14

  1. The defendant contended this representation was not an admission because opinions held by Mr Carter and Mr Keeffe about the manner in which they would have approached risk had another Delivery Model been selected was not a representation adverse to the Defendant’s interest in the outcome of the proceedings. Further, as it was not part of the Plaintiffs’ case that the selection of one delivery model over another was negligent, an ‘admission’ that Carter recognised the different risk profile of various models is not relevant to any pleaded allegation in the proceedings.

  1. A representation that Mr Carter and Mr Keeffe recognised that the change to the Direct Model gave rise to risks associated with delivery quality, fraud and a range of other risks which they would ordinarily “layer into a contract requirement” with fewer large providers could rationally affect the assessment of the probability of a finding of breach of duty in the proceeding, particularly in the context of the DEWHA Issues. Such a representation was adverse to the defendant’s interest in the outcome of the proceeding in the context of allegations of negligent risk identification and management.

  1. The tender of this admission will be permitted.

  1. I accept the defendant’s contention that paragraph [41] of the witnesses statement provides essential context and should be included in the tender.

Kevin Keeffe

Admission 4

  1. The defendant contended that this representation did not involve the intention to assert the existence of a fact and was not an admission. I do not agree. To assert  that DEWHA had limited capacity to take on the extra work represented by the HIP and that there were insufficient resources and the structures in place did not recognise the scale, complexity and challenges of the task of delivering the HIP is a representation that is adverse to a finding that the defendant was not negligent, particularly in the sense of the DEWHA Issues as set out above. Further, the admission could rationally affect the assessment of the probability of a finding of breach of duty in the proceeding.

  1. The tender of this admission will be permitted.

Admission 5

  1. To assert that the witness (Keeffe) approached other public servants (Carter and Forbes) with his concerns about the departmental resources does not assert the existence of any particular fact  and the witnesses state of mind is not adverse to the defendant’s interest in the outcome of the case. It is neither inconsistent with the defendant’s defence nor exhibiting a tendency to prove the plaintiffs’ allegations.

  1. The tender of this representation is refused.

Admission 6

  1. For the same reasons as are given for refusing the preceding admission, to assert that the demands the HIP placed on DEWHA were unprecedented is not an admission and its tender is refused.

Mike Mrdak

Admission 8

  1. The defendant says this is not an admission and it is irrelevant, as there is no allegation that there were concerns held by staff in affected departments about resourcing, or that it was negligent to resource any particular department to any particular level.

  1. The representation was that following the announcement of the Nation Building and Jobs Plan, there was a lack of clarity about, and a concern within affected departments about, resourcing. In DEWHA’s case, delays in resolving resourcing delayed DEWHA appointing appropriate staff and settling program implementation proposals. These representations are rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding, particularly in the context of the DEWHA Issues. As the representation could support a finding that the defendant was negligent, it is adverse in the relevant sense and is an admission.

  1. The tender of this admission will be permitted.

Admission 51

  1. The defendant says this representation is not an admission and was irrelevant as the defendant does not allege that additional funding was supplied to the States and Territories in respect of the HIP.

  1. The representation is relevant because a particular of negligence is that the Commonwealth failed to ensure that the States and territories had sufficient personnel and resources to address the consequences of identified risks. A representation that to Mr Mrdak’s knowledge, no additional funding was provided to the States and Territories in relation to the HIP is rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding. As the representation could support a finding that the defendant was negligent it is adverse in the relevant sense and is an admission.

  1. The tender of this admission will be permitted.

Admission 9

  1. For the same reasons as are given for the preceding admission, the tender of this admission will be permitted.

  1. The representation of a lack of experience in delivering grant programs or industry delivered programs or dealing with the States and Territories is rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding, particularly in the context of the DEWHA Issues touching on issues of capability, capacity, experience etc. As the representation could support a finding that the defendant was negligent it is adverse in the relevant sense and is an admission.

Admission 10

  1. The defendant says this is not an admission and is irrelevant as it is not a pleaded allegation that the Department was behind in timeframes for other non-HIP programmes, or that this had any bearing on the alleged breaches of the applicable standard of care.

  1. I am not persuaded that the representation is rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding, in the context of the DEWHA Issues. The relevant question is not whether other programs were not being properly administered but whether the defendant failed to institute or properly institute administrative procedures to identify risks is that the HIP was not well organised and the process embarked on by DEHWA could be described as chaotic.

  1. As the representation could not support a finding that the defendant was negligent it is not adverse in the relevant sense and is not an admission.

  1. The tender of this admission is refused.

Admission 11

  1. The defendant says this is not an admission and is irrelevant as it is not a pleaded allegation that the Department’s preparedness was less than other agencies, or that this had any bearing on the alleged breaches of the applicable standard of care.

  1. This representation raises the same issues as the preceding admission and for the same reasons its tender is refused.

Admission 42

  1. The defendant does not oppose this admission but says it ought not be admitted in the absence of paragraph [102] of the statement as necessary context.

  1. The further material sought to be included in the tender was a document and a further paragraph of the witnesses statement. The plaintiffs opposed the inclusion of the latter material but not the document.

  1. I accept the defendant’s contention that the additional paragraph of the witnesses statement provides essential context and should be included in the tender.

  1. The tender of this admission will be permitted and will include the document identified as AGS.002.008.3318 and paragraph [97] of the witnesses statement.

Admission 40

  1. The defendant says this is not an admission as the fact Mr Mrdak did not receive a particular set of minutes or letter is not adverse to the defendant’s interest in the outcome of the proceeding.

  1. Further, it is irrelevant as is not a pleaded allegation that the failure of Mr Mrdak to receive these two documents was causative of any breach of the applicable standard of care.

  1. A representation that the Co-ordinator General was not provided with significant minutes of meetings is not rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding, as breach has been particularised. Although the plaintiff referenced the context of their allegations of a lack of coordination within Government and a lack of sharing of information on key matters, the representation could not support a finding that the defendant was negligent and it is not adverse in the relevant sense and is not an admission.

  1. The tender of this representation is refused.

Admission 26

  1. The defendant says this representation is not an admission, as Mr Mrdak’s state of mind concerning the nature of training under the HIP is not a matter adverse to the Commonwealth’s interests in the outcome of the proceeding. I agree.  The Co-ordinator General’s understanding of what was or was not a critical aspect of the HIP is not a representation that involved the intention to assert the existence of a fact. It was not an admission.

  1. The tender of this representation is refused.

Admission 27

  1. For the reasons given in respect of admission 26, the tender of admission 27 is refused.

David Hoitink

Admission 15

  1. The defendant does not oppose this admission but says it ought not be admitted in the absence of paragraphs [47]-[50] of the statement as necessary context. I agree that those paragraphs provide necessary context, as they go to subsequent discussions regarding training, supervision and pre-requisites for entry into the program which were raised as issues in the risk profile under the new model the subject of the representation in paragraph [23].

  1. The tender of this admission, comprising paragraphs [23] and [47]-[50] will be permitted.

Admission 48

  1. The defendant does not oppose this admission but says it ought not be admitted in the absence of paragraphs [69], [71], [74], [77] and [80] - [81] of the statement as necessary context. 

  1. Paragraphs [69], [71], [74] and [77] provide the background assumptions underlying the representation in paragraph [82].  Paragraphs [80] - [81] identify the expectations envisaged in respect of that representation.  I consider these paragraphs are necessary context to paragraphs [82] - [84]. 

  1. The tender of this admission, which will comprise paragraphs [69], [71], [74], [77], [80]-[81] and [82]-[84] will be permitted.

Admission 49

  1. The defendant makes the same submission as for Admission 48 which is a representation drawn from the same source.  The plaintiff contended that the representation was simply that the Commonwealth was not providing information to the States’ about where the installations were occurring, which  required no context.

  1. For the reasons given in respect of admission 48, the tender of this admission, comprising paragraphs [69], [71], [74], [77], [80]-[81] as necessary context will be permitted.

Admission 50

  1. The defendant does not oppose this admission but says it ought not be admitted in the absence of paragraphs [93]-[94], [99]-[100] and [104] of the statement as necessary context.

  1. Paragraph [86] of the statement reveals the representation relied on which concerns involving the States as a potential response to increased safety concerns.  Fire is said to be a risk of particular focus.  The additional paragraphs the defendant seeks to include as part of this admission address information sharing with the States regarding fires, and the role of States in addressing this risk.  I consider this is necessary context.  Accordingly, the tender of this admission comprising paragraphs [86], [93]-[94], [99]-[100] and [104] will be permitted.

Beth Brunoro (Riordan)

Admission 16

  1. The defendant says this is not an admission as it is a non-controversial fact which is clear on the face of many documents already tendered without objection.

  1. The plaintiff submits that an admission remains an admission even if it is not the only evidence on the topic. Further, a concession by the defendant that a fact is not controversial does not equate to a formal admission.

  1. The representation was not adverse to the defendant’s interest in the outcome of the proceeding. It is not an admission and tender of it is refused.

Admission 17

  1. The same submissions and considerations were raised as with admission 16.  The representation was not adverse to the defendant’s interest in the outcome of the proceeding. It is not an admission and tender of it is refused.

Admission 18

  1. The same submissions and considerations were raised as with admissions 16 and 17.  The representation was not adverse to the defendant’s interest in the outcome of the proceeding. It is not an admission and tender of it is refused.

Admission 19

  1. I do not accept the defendant’s contention that this is not an admission as the fact that Ms Brunoro made a particular recommendation does not constitute an admission adverse to the interests of the Defendant. The recommendation identified what the plaintiffs contend was a critical failing in the risk assessment processes of the defendant in relation to the HIP. The representation is rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding. As the representation could support a finding that the defendant was negligent it is adverse in the relevant sense and is an admission.

  1. The tender of this admission will be permitted.

Admission 22

  1. The defendant says this is not an admission as it is a is a non-controversial fact which is clear on the face of many documents already tendered without objection.

  1. For the reasons given above in respect of admission 16,  the representation was not adverse to the defendant’s interest in the outcome of the proceeding. It is not an admission and tender of it is refused.

Admission 25

  1. For the reasons given above in respect of admission 16,  the representation was not adverse to the defendant’s interest in the outcome of the proceeding. It is not an admission and tender of it is refused.

Aaron Hughes

Admission 36

  1. The defendant says this is not an admission as it is not in dispute that that the training and competency requirements were changed in November 2009, which is clear on the face of many documents already tendered without objection. However, the plaintiff identified the representation as to the reasons for the change at that time as relevant and adverse to the interests of the defendant in the outcome.

  1. The representation is a relevant admission for the reasons identified throughout this ruling and the tender of this admission will be permitted.

Melissa McEwen

Admission 20

  1. The defendant says this is not an admission.

  1. I disagree. The representation involves the intention to assert the existence of a fact that there was a lack of clarity between DEWHA and DEEWR regarding the extent of DEEWR’s role and the extent to which it could or would arrange training or encourage RTOs to deliver training. The representation is rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding. As the representation could support a finding that the defendant was negligent it is adverse in the relevant sense and is an admission.

  1. The tender of this admission will be permitted.

Admission 28

  1. The defendant says this representation is not an admission as it is no more than a representation as to Ms McEwen’s state of mind and understanding. Alternatively, if [31] is admitted the passage ought not be admitted in the absence of paragraphs [27]-[31] which provide essential context to the representation.

  1. The representation does not involve the intention to assert the existence of a fact and is neither an admission nor relevant to a matter at issue in the proceedings.

  1. The tender of this representation is refused.

Admission 29

  1. The defendant submitted that what DEEWR told DEWHA concerning its contact with EE-Oz is not an admission nor is it relevant to a matter at issue in the proceedings.

  1. The representation involves the intention to assert the existence of a fact that DEEWR advised DEWHA that DEWHA should require consultation with EE-Oz as part of its contract with CPSISC. The representation is rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding. As the representation could support a finding that the defendant was negligent it is adverse in the relevant sense and is an admission.

  1. The tender of this admission will be permitted.

Admission 30

  1. The defendant says this is not an admission as there is no dispute that the OHS qualification was a pre-requisite to working in the construction industry, and to being registered as an installer. The plaintiffs contended that the representation that the white card could be obtained on line was rationally capable of affecting the assessment of the plaintiffs contention that mandatory training should have been required.

  1. I disagree. The representation is irrelevant and its tender is refused.

Admission 39

  1. The defendant says this representation is not an admission as a description of what Ms McEwen thought the Pocketbook would or might be used for does not constitute an admission adverse to the Defendant’s interest in the outcome of the proceeding.

  1. The representation that Ms McEwan understood that there was an intention that the pocketbook be provided in hard copy, and was not intended to be a substitute for training is not rationally capable of affecting the assessment of the probability of a finding of breach of duty in the proceeding in relation to installer training and supervision. As the representation could not support a finding that the defendant was negligent it is not adverse in the relevant sense and is not an admission.

  1. The tender of this representation is refused.

Commonwealth reply submissions to Royal Commission

Admission 45

  1. The context of the remaining representations is different from those already considered. With each of those admission, the representation was made by a witness, a senior public servant. This and the following representations are drawn from reply submissions filed by counsel for the defendant appearing before the Hanger Royal Commission. That context is significant since counsel are responding to other submissions which are not part of the tender and the opening paragraphs of the document make clear that counsel is addressing process and policy matters which might have produced a different outcome if approached differently.

  1. The plaintiff argued the response of the industry generally is either not replicated by, or not undermined by, the defendant’s pleading at sub-paragraph 34(a) and (c) of its defence. The response of the industry is a matter that goes further than that contained in sub-paragraphs 34(a) and (c) of the defence.

  1. When considered in the specific context in which the representation was made, a representation that the Commonwealth was aware that industry was responding to the announced HIP and expanding its capacity a representation is not adverse to the defendant’s interest in the outcome of this proceeding. This is not an admission. The language of the representation is consistent with the defence.

  1. The tender of this representation is refused.

Admission 46

  1. The defendant does not oppose this admission on the condition that that it ought not be admitted without paragraphs [31]-[34] of the statement as essential surrounding context. I am satisfied that counsel’s submission was not intended to be construed as isolated representations of fact and it is reasonably necessary to consider the submission as a whole. However, the plaintiff did not press the admission if I determined that paragraphs [31]-[34] should also be admitted. Although the defendant disputed that the plaintiff could adopt such a procedure so as to make an election, if the tender is conditionally withdrawn dependent on my ruling, it falls on the defendant to affirmatively establish the basis for admission of the representations. It has not done so. 

  1. Accordingly the tender is refused.

Admission 47

  1. The same considerations and submissions applied to admission 47 as applied to admission 46. 

  1. For the reasons that I gave, the tender is refused.

Admission 52

  1. The defendant does not oppose this admission on the condition that it ought not be admitted without paragraph [39] of the statement as essential surrounding context. Again, the plaintiff did not press the admission if I determined that paragraph [39] should also be admitted.  In my view counsel clearly intended that their submission in reply to the Queensland submissions comprised paragraphs [38] and [39] and the defendant is correct in contending that paragraph [39] of the statement as essential surrounding context to the representation identified by the plaintiffs in paragraph 38.

  1. For the reasons that I have expressed above, the tender is refused.

---

CERTIFICATE

I certify that this and the 24 preceding pages are a true copy of the reasons for judgment of John Dixon J of the Supreme Court of Victoria delivered on 11 May 2018.

DATED this  14th day of May 2018.

Associate

Schedule A

DEWHA capacity

  1. DEWHA was under-resourced, did not have the right skill set for the HIP and struggled to get the right skill sets assembled in the time available: Carter [12], [16].

  1. The level of resources and skill sets available to DEWHA, particularly but not only at an executive level, were not commensurate with the tasks allocated: Carter [13], [15].

  1. DEWHA staff were over-stretched, working long hours and weekends: Carter [13].

  1. DEWHA had limited capacity to take on the extra work represented by the HIP. There were insufficient resources and the structures in place did not recognise the scale, complexity and challenges of the task of delivering the HIP: Keeffe [31].

  1. Mr Keeffe approached both Mr Carter and Mr Forbes about his concerns that DEWHA had insufficient resources: Keeffe [33], [36].

  1. The demands the HIP placed on DEWHA were unprecedented: Keeffe [36].

  1. No assessment was made of DEWHA’s capability, including in relation to systems, processes and staff, when allocating the HIP to that department: Carter [17].

  1. Following the announcement of the Nation Building and Jobs Plan, there was a lack of clarity about, and a concern within affected departments about, resourcing. In DEWHA’s case, delays in resolving resourcing delayed DEWHA appointing appropriate staff and settling program implementation proposals: Mrdak [50], [52].

  1. DEWHA did not have much experience in delivering grant programs or industry- delivered programs or dealing with the States and Territories in implementing such programs: Mrdak [56].

  1. As at early 2009, DEWHA was behind in meeting timeframes for programs other than the HIP: Mrdak [56].

  1. Compared with other departments responsible for other stimulus programs, DEWHA’s preparedness was less than other agencies, and it took more time than other agencies to identify what the delivery and program assurance issues were: Mrdak [60].

The change to the Direct Model – DEWHA experience and risks

  1. DEWHA had experience in delivering programs using a model involving the outsourcing of the end-to-end service by a use of a lead contractor. The Regional Model[11] for the HIP was of this kind: Carter [24].

    [11]Referred to by Mr Carter as the “Proposed Business Model”.

  1. Mr Carter and Mr Keeffe were both concerned about the Direct Model[12] both in terms of DEWHA’s capacity and the risk to the Commonwealth from that delivery model, in particular because DEWHA’s experience was in procuring and managing services according to the Regional Model: Carter [38].

    [12]Referred to by Mr Carter as the “model proposed by OCG”.

  1. Mr Carter and Mr Keeffe recognised that the change to the Direct Model gave rise to risks associated with delivery quality, fraud and a range of other risks which they would ordinarily “layer into a contract requirement” with fewer large providers: Carter [39].

  1. DEWHA was aware that the Direct Model[13] created differences in the risk profile compared with the Regional Model.[14] Under the Direct Regional Model, large service providers were likely to be experienced businesses with existing processes in place whereas, under the Direct Model, there would be a greater possibility for new entrants to the industry. DEWHA recognised that there would be a need for all participants to satisfy prerequisites, but that new entrants presented a higher level of risk: Hoitink [23].

    [13]Referred to by Mr Hoitink as the “model proposed after the meeting on 1 April 2009.

    [14]Referred to by Mr Hoitink as the “original business model”.

  1. Ms Brunoro was aware that the Minter Ellison risk management work to mid-April was based on the Regional Model[15]. The presentation Ms Coaldrake gave to the PCG on 9 April 2009 was based on the Regional Model: Brunoro [60], [63].

    [15]Referred to by Ms Brunoro as the “regional delivery model”.

  1. The Regional Model involved organisations being procured to cover household insulation installation for a region. Under the Regional Model, safety and training issues for installers would be covered by the procured organisations; it would be their responsibility to attract, train and quality-assure staff: Brunoro [65].

  1. Training of installers and quality assurance would have been procured and covered off in the contracts with regional providers under the Direct Regional Model. Ms Brunoro discussed this with Ms Coaldrake: Brunoro [69].

  1. Ms Brunoro recommended to the PCG on 16 April 2009 that the project team carry out a review of the Risk Plan to align with the proposed new model (ie the Direct Model), including by reassessing current and emerging risk rating, better articulating mitigating treatment and allocating responsible risk owners within project teams in light of the business model change: Brunoro [59]-[60], [71].

Safety, training and supervision

  1. There was a lack of clarity between DEWHA and DEEWR regarding the extent of DEEWR’s role and the extent to which it could or would arrange training or encourage RTOs to deliver training: McEwen [11]-[12], [26].

  1. It was not until 20 March 2009 that DEWHA engaged with DEEWR regarding training until Mr Keeffe met with Ms McEwen on 20 March 2009: Keeffe [107].

  1. DEWHA also received advice from MBA which included that training should highlight things such as electrical wiring and faulty rafters/roofing materials: Brunoro [75].

  1. Mr Keeffe, Mr Kimber, Ms Brunoro and a Ms Kaminski frequently discussed the risk of injury to installers as a common point of concern: Keeffe [87].

  1. There was frequent discussion within the DEWHA team on work health and safety issues in developing program guidelines: Keeffe [87].

  1. Training was one of the key elements that was directed at addressing risks in the HIP: Brunoro Royal Commission Transcript 18 March 2014, p 126 lines 25-29.

  1. Mr Mrdak’s understanding was that mandatory training of firms and the individuals who would be installing insulation funded by the Commonwealth was a critical aspect of the HIP at all times: Mrdak Royal Commission Transcript 27 March 2014 p 1049 line 32 – p 1050 line 45.

  1. Mr Mrdak was not informed of changes to the training and competency requirements and continued to understand throughout that training would be provided to all participants: Mrdak Royal Commission Transcript p 1050 lines 12-45.

  1. DEEWR considered that the use of larger, experienced companies would be using people who were experienced and trained, whereas, under Phase 2 of the HIP, people could set up businesses and, in that situation, there was a need to make sure that there was some kind of training bar: McEwen [31].

  1. Following concerns having been raised by EE-Oz in February 2009 about electrical safety and the hazards of older building and the placement of insulation on or over electrical wiring and fittings such as downlights, DEEWR advised DEWHA that DEWHA should require consultation with EE-Oz as part of its contract with CPSISC: McEwen [52]-[54].

  1. The “white card” was a prerequisite to stepping on a building site, and some providers offered the “white card” qualification online: McEwen [57].

  1. Ms McEwen of DEEWR was of the view, and based on discussions with them, understood Mr Keeffe and Ms Riordan (Brunoro) of DEWHA to also be of the view, that completely untrained people should not be able to participate in the HIP: McEwen [63].

  1. As at 20 March 2009, when Mr Keeffe met with Ms McEwen, it was Mr Keeffe’s firm understanding that training was going to be mandatory for all installers: Keeffe [107].

  1. Until the PCG meeting on 8 May 2009, competency was to be assessed at the level of the individual installer, namely the individual working on the installation: Keeffe [112].

  1. There was a greater focus on safety issues from September 2009 than there was before, due to public and media concern about the HIP and whether it was safe: Hoitink [67].

  1. After Mr Fuller’s death there was a greater focus on safety and roof inspections were ramped up. Although financial auditing was still part of the audit program, there was a shift to safety issues: Hoitink [67].

  1. At some time before changes were made to the HIP requirements at the start of November 2009, DEWHA was aware that there was a lack of supervision by appropriately qualified installers. This was one of the reasons for the changes made at the start of November 2009: Hughes [27].

  1. DEWHA had a better engagement with agencies such as the Electrical Safety Office in Queensland, NECA and the Master Electricians around November 2009 than it did previously: Hughes [31].

  1. The requirement that all installers have training arose from the deaths of insulation installers (Mr Fuller and Mr Barnes) and reports about installers not being supervised correctly: Hughes [64]-[66].

  1. The Pocketbook was not intended as a substitute for training, and was intended to be something “people could have in the glove box of their cars”: McEwen [80].

  1. Mr Mrdak was not provided with the minutes of the 18 February 2009 stakeholder meeting, and was not given a copy of NECA’s letter to Minister Garrett warning of safety risks: Mrdak [104].

Rollout

  1. Mr Mrdak’s understanding was that, if the announced timeframe of 1 July 2009 was not possible, “the Government’s fall-back option” was to continue the reimbursement model that was put in place from February 2009 for the necessary initial period: Mrdak [42].

  1. By 1 June 2009, there were RTOs in 50 separate locations that had added capacity to deliver installer training and a further 40 RTOs that already had the qualification in their scope. Mr Mrdak’s assessment was that this indicated a high degree of capacity to roll out the necessary training: Mrdak [102].

Industry

  1. DEWHA was aware that it was likely the existing industry would expand in order to meet demand: Hoitink [23].

  1. At the industry roundtable on 29 June 2009, Minister Garrett said words to effect “my commitment is to a program to insulate 2.9 million homes. There will be no commitment over and above that but this commitment will be met hopefully by the current program termination date”: Commonwealth submissions [19].

  1. The Commonwealth was aware that industry was responding to the announced HIP and expanding its capacity: Commonwealth submissions [29].

  1. Many businesses were holding stock at the time of the sudden close of the HIP: Commonwealth submissions [30].

  1. Many businesses made investments in the expectation that the scheme would continue beyond February 2010: Commonwealth submissions [30].

States

  1. As at October 2009, the Commonwealth was still not providing the States information on where installations were occurring: Hoitink [82]-[84].

  1. State fair trading authorities would be aware of issues with installations where they received a complaint, but the Commonwealth did not provide information to the States about where all installations of a particular installer had taken place: Hoitink [82]-[84].

  1. DEWHA considered involving the States was one of the possible responses to increased safety concerns from around October 2009: Hoitink [86].

  1. To Mr Mrdak’s knowledge, no additional funding was provided to the States and Territories in relation to the HIP: Mrdak [51].

  1. The Commonwealth needed to do more to engage with the States in circumstances where the Commonwealth took the view that the HIP carried with it occupational, health and safety risks, and the States, as the level of government with capacity and legal responsibility for dealing with those risks, were best placed ot to manage and limit those risks: Commonwealth submissions [38].


Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0

Cases Cited

5

Statutory Material Cited

0

R v Sica [2013] QCA 247
IMM v The Queen [2016] HCA 14
Registrar of Aboriginal and Torres Strait Islander Corporations v Ponto [2012] FCA 1500