The Roads & Traffic Authority of New South Wales v Alto Rural Pty Limited

[2007] NSWSC 1123

CITATION:	The Roads & Traffic Authority of New South Wales v Alto Rural Pty Limited [2007] NSWSC 1123
HEARING DATE(S):	09/10/2007
JUDGMENT DATE :	16 October 2007
JUDGMENT OF:	Associate Justice Malpass
DECISION:	The decision and orders of the Magistrate are set aside. The matter is remitted back to the Local Court for determination according to law. The defendant is to pay the costs of the Summons. If so entitled, it is to have a certificate under the Suitors Fund Act. The exhibits may be returned.
CATCHWORDS:	Breach of mass requirements - liability of occupier - defence of reasonable steps - statutory construction - corporation - actual and constructive knowledge of directors and management
LEGISLATION CITED:	Road Transport (General) Act 2005 (NSW)
CASES CITED:	Proudman v Dayman (1941) 67 CLR 536
PARTIES:	The Roads & Traffic Authority of New South Wales (Pl) Alto Rural Pty Limited (Def)
FILE NUMBER(S):	SC 12875/07
COUNSEL:	Mr T. Lynch (Pl) Mr M. Fraser (Def)
SOLICITORS:	Hunt & Hunt (Pl) Ralph Fitzgerald Solicitor (Def)
LOWER COURT JURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	n/a
LOWER COURT JUDICIAL OFFICER :	Swain LCM
LOWER COURT DATE OF DECISION:	12/04/2007

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE MALPASS

16 OCTOBER 2007

12875/07 The Roads & Traffic Authority of New South Wales v Alto Rural Pty Limited

JUDGMENT

1 HIS HONOUR: Proceedings were brought in the Local Court against the defendant by way of Court Attendance Notice alleging an offence under s56 of the Road Transport (General) Act 2005 (NSW) (the Act). It concerned a single ‘mass requirement” (overloading) offence, which allegedly took place on 27 March 2007.

2 The proceedings were heard by Ms Swain LCM. The Magistrate dismissed the proceedings.

3 The evidence before the Magistrate was entirely documentary. The case was conducted on the basis that allegations of fact contained in the documentation might be accepted by the Local Court as being true.

4 The defendant did not dispute any element of the offence (inter alia, that there was overloading). The mass of the load over the vehicles rear axle group was 21.76 tonnes (the permitted “mass requirement” was not more than 20 tonnes).

5 The defendant relied on “the reasonable steps defence” provided by s87 of the Act (Division 3 of Part 3.4 of Chapter 3). Certain of the relevant provisions thereof are as follows:-

“87 Reasonable steps defence for mass requirements: drivers, operators and owners

(1) If a provision of this Act, or a regulation made under this Act, states that a person has the benefit of the reasonable steps defence for an offence relating to a mass requirement, it is a defence to a prosecution for an offence alleged to have been committed by a person as the driver, owner or operator of a vehicle or combination if the defendant establishes that the defendant:

(a) did not know, and could not reasonably be expected to have known, of the contravention, and

(b) had taken all reasonable steps to prevent the contravention.

(2) If the relevant contravention resulted from the fact that the mass of the vehicle or part of the vehicle (together with the mass of any load on the vehicle or part of the vehicle) exceeded any limit prescribed by the regulations, then the court is not entitled to be satisfied that the defendant took all reasonable steps to prevent the contravention unless it is satisfied that the defendant took all reasonable steps to cause the mass of the load carried on the vehicle to be ascertained at the start of the journey during which the contravention occurred.

(3) The court is not entitled to be satisfied that the defendant took all reasonable steps to cause the mass of a load to be ascertained unless it is satisfied that:

(a) the load had been weighed, or

(b) the defendant, or the driver of the vehicle, was in possession of sufficient and reliable evidence from which that weight was calculated.”

I shall refer also to sub-sections (4) and (5) in due course.

6 The judgment of the Magistrate contained the following [at transcript p17 L24]:-

“I think the defence is made out. I am satisfied on the balance of probabilities that firstly the defence is available, secondly that the defendant is a corporation being Alto Rural Pty Limited. Under subs (2) I am satisfied that the load was weighed at the start of the journey. I am satisfied that the load was taken on board at port Hunter Commodities and the truck was weighed after it was loaded and there is evidence in annexure C of Mr Busby’s affidavit.
The driver was, (sic) pursuant to subs (3), the load had been weighed, the driver of the vehicle was in possession of sufficient and reliable evidence about the weight and how it had been calculated. The driver thought mistakenly that he could load 25.593 tons. He was mistaken in that because the tare weight of his truck was not 15,907, but rather it was 16,280, some 300 kilos more.”
And [at transcript p18 L16]:-
“The management and the director in particular is not present with the employee, nor could he be expected to be. I am satisfied under subs (1) that he did not know and that he could not reasonable (sic) be expected to have known of the contravention and further he had taken all reasonable steps to prevent such contravention from occurring. The defence is made out and THE CHARGE IS DISMISSED or the Court attendance notice.
I have come to that conclusion despite my findings that the driver ought to have known that the truck was overloaded because of his obviously mistaken belief that the load capacity of the truck was 26.593. The purpose of the chain of responsibility in the legislation is specifically so that each person along the way is liable for their actions.”

7 The plaintiff now appeals to this Court. It brings an appeal as of right. It bears the onus of demonstrating error in point of law that is material to the decision and justifies its disturbance.

8 Broadly speaking, at least in the submissions put orally, there are two aspects to the appeal. One concerns misdirection in respect of the provisions of s81(1)(b). The other concerns misdirection in relation to (a) thereof and subs (5).

9 The defendant was the operator of a vehicle that was carrying fertilizer. It was loaded at the Port Hunter commodities yard in Newcastle (the yard). It was taken to a property (Elroi Downs) owned by the defendant. The driver of the vehicle was Mr Busby. There were work systems that had been put in place. He was aware of the work systems.

10 Corporate Counsel for the defendant, Mr Fitzgerald, had prepared documentation which has been described as a memorandum (a schedule thereto set out, inter alia, load limits including the maximum load for each axle group). For present purposes, it set out the tare weight (15,907 tonnes), the legal maximum allowable gross vehicle mass (42,500 tonnes) and the available loading weight (26,593 tonnes). A copy document was given to Mr Busby in about November 2005. The figures for the legal maximum and the available loading weight were both erroneous.

11 On about 6 December 2005, the vehicle was fitted with a loadman onboard scale system, which enabled the driver to measure the total weight of the vehicle and its load, as well as the weight on each axle group.

12 Mr Busby oversaw the loading. He checked the loadman readings. The reading showed that the load on the rear group axel was less than 20 tonnes and that the total weight of the fertilizer was less than 26,593 tonnes. He believed that the permitted maximum was 26,593 tonnes. He put the vehicle on a weighbridge at the yard and obtained a record ( the docket) as to its loaded weight. The docket disclosed that the weight of the fertilizer was 26,360 tonnes and that the vehicle’s gross vehicle mass (GVM) was 42.640 tonnes. If he had given consideration to this material, he would have been alerted to the possibility of fault in the loadman system.

13 Subsequently it was found to be faulty (the relevant readings were lower than they should have been and recalibration of the system was required). Although it was relatively new, there was no evidence as to it having been checked for accuracy or of any system having been put in place to ensure that its readings continued to be accurate.

14 The Magistrate found that the overloading was due to a mistaken belief on the part of Mr Busby. She found that he mistakenly believed that the unloaded weight of the vehicle was 15.907 tonnes (when it was actually 16.280 tonnes) and that he could load up to 25.593 tonnes on the vehicle. As a consequence, the vehicle was overloaded by 0.3 tonnes. She further found that he ought to have known the truck was overloaded.

15 Sections 53-58 impose offences on “A person”. They are part of Chapter 3 (mass, dimension and load restraint requirements for vehicles) and are to be found in Division 4 of Part 3.3 thereof (which deals with liability for breaches). The sections have a similarity in terminology. They impose what are regarded as strict liability offences. The persons who are the subject of the offences are the consignor, the packer, the loader, the operator, the driver and the consignee. They have been described as concurrent offences.

16 Section 87 provides a statutory defence (“the reasonable steps defence” for an offence relating to a mass requirement). Section 87 has application where a provision of the Act, or a Regulation made under it, states that a “person” has the benefit of such a defence. Section 56 (which concerns the operator of the vehicle) has such a provision. Section 87 is available to “the driver, owner or occupier of a vehicle or combination”.

17 The making out of the reasonable steps defence involves two elements. The onus is on the “defendant” to establish both of them and the onus is expressed to be in respect of the “defendant”. The first is that the defendant did not know, and could not reasonably be expected to have known of the contravention. The second is that the defendant had taken all reasonable steps to prevent the contravention.

18 The section prohibits the Court from being entitled to be satisfied of the second element unless it is satisfied that the defendant took all reasonable steps to cause the mass of the load carried on the vehicle to be ascertained at the start of the journey during which the contravention occurred. The Court is also prohibited by the section from being satisfied that the defendant has satisfied such element unless it is satisfied of one of two matters (either that the load had been weighed or the defendant or driver of the vehicle was in possession of sufficient and reliable evidence from which that weight was calculated).

19 What has been mentioned in the two preceding paragraphs is that which is proscribed by subss (2) & (3). Subs (4) provides that subss (2) and (3) do not apply if the defendant satisfies the Court that, at all material times, “the defendant did not, either personally or through any agent or employee, have custody or control of the vehicle concerned”.

20 As the defendant was a corporation, subs (5) had application. It provides as follows:-

“(5) If the defendant is a corporation, then, in order to satisfy the court that the corporation did not know and could not reasonably be expected to have known of the relevant contravention, the corporation must satisfy the court that:

(a) no director of the corporation, and

(b) no person having management functions in the corporation in relation to activities in connection with which the contravention occurred,

knew of the contravention or could reasonably be expected to have known of it.”

21 It will only be relevant where the person alleged to have committed the offence is either the owner or the operator. It may also be observed that the sub-section expresses that it is the “corporation” (as opposed to “the defendant”) that must satisfy the Court of (a) and (b).

22 At common law, there had been a defence of honest and reasonable mistake of fact where the offence was one of strict liability (see, inter alia, Proudman v Dayman (1941) 67 CLR 536). The common law defence has been repealed by s90 of the Act.

23 It is common ground that the legislature has provided a statutory defence instead thereof and that what has to be established to make it out is a matter for statutory construction.

24 The parties have drawn the attention of the Court to the Second Reading Speech and to the following paragraphs contained therein-:

“The object of the legislation before the House is to amend the State Roads Act and the Traffic Act to improve the effectiveness of enforcing mass limits of heavy motor vehicles.

…

Experience by the RTA has shown that the legislative defence currently available to owners reduces the effectiveness of owner prosecution. The courts have adopted a very broad interpretation of the defence. This has resulted in owners successfully claiming that it applies even where the owner merely gave a general direction to drivers not to overload, without having in place any proper system to ensure the vehicles are not overloaded. The owner defence has been successfully used in a growing number of defended prosecutions. This success has gained wide publicity within the industry and increasing numbers of owners seek to take advantage of it. In the circumstances the existing statutory defence will be amended to give clear guidance to the courts as to what will be required to satisfy a defendant owner’s obligation to show diligence in order to avoid contravention of the Act.”

25 The second element constitutes what has been referred to as a due diligence provision. Such provisions have been regarded as imposing two responsibilities (laying down a proper system to provide against contravention and the provision of adequate supervision to ensure that the system was properly carried out).

26 In determining whether or not the second element has been made out, there seems to be no issue that the acts or omissions of both employees of the corporation as well as directors and management have relevance. In the present case, the plaintiff says that there has been misdirection by the Magistrate. It looks to both the lack of proper system and adequate supervision. It made reference to the erroneous material given to Mr Busby, the faulty loadman system and the errors made by Mr Busby. It seems to me that the Magistrate did misdirect herself in approaching the construction of the statutory provisions (inter alia, she did not address the question of what was to be established by the defendant to satisfy subs (1)(b)).

27 There is contest between the parties as to the role to be given to subs (5) in the context of s87 and other provisions of the Act. One sees it as being of the nature of a threshold requirement, while the other sees it as being of the nature of a dictionary provision.

28 The structure of the section sees subs (1) prescribing the elements of the defence that are to be established by the defendant. The structure suggests that the other provisions of s87 are intended to supplement what is said in subs (1). Subss (2) and (3) specify what may be described as threshold requirements that are to be satisfied to make out the second element. Subs (4) deals with circumstances in which subss (2) and (3) have no application. In this context, it could be expected that subs (5) would also be intended to impose a threshold requirement that had to be satisfied in the case of a corporation.

29 It may be observed that there are differences of language between subss (2) and (3) on the one hand and subs (5) on the other hand. Subss (2) and (3) have the imprimatur that “the Court is not entitled to be satisfied”, whereas subs (5) uses the words “in order to satisfy the Court”. Despite these differences, it seems to me that a similar intention is evinced.

30 Whilst it was not raised as an appeal ground, it may be noted that the Magistrate misdirected herself in the construction of subs (5) (which she erroneously referred to a subs (1)) in relation to directors and management persons. The sub-section appears to impose an onerous obligation in relation to both “no director of the corporation” and “no person having management functions” in relation to activities in connection with which the contravention occurred.

31 The Second Reading Speech informs that the object of the legislation was to improve the effectiveness of enforcing mass limits of heavy motor vehicles. As to the prosecution of mass limit offences, it informs that the plaintiff has a discretion under it to prosecute either the owner or driver or both for such offences. It also informs that to address past criticism, it was proposed that prosecutions for overloading be primarily directed against owners (presumably also against operators).

32 It does not seem to me to have been intended that the knowledge (actual or constructive) of the driver was to be disregarded by the Court when making a determination as to whether the first element was made out. As in the case of (b) of subs (1), I consider that (a) thereof was intended to set out what must be established by the defendant to make out the first element. The acts or omissions of the driver are relevant to that exercise (and in my view, of themselves, may be determinative of that issue).

33 In this case, apart from the driving of the vehicle, the driver was assigned the tasks of overseeing the loading, the checking of the loadman readings and the tasks contemplated by subs (2) and (3). It seems to me to be unrealistic to suggest that the Court should only look at evidence concerning directors and management.

34 I consider that subs (5) was intended to operate in the sense that the defendant will fail to establish the first element (which deals with the state of knowledge of the defendant) unless the Court is also satisfied as to the requirements thereof. It is threshold in nature and not that of a dictionary for the meaning to be given to subs (1).

35 It seems that the section would have had in contemplation situations where an employee such as the driver lacked relevant knowledge but that it was had by either a director or management person (for example, in cases where there were known to be problems concerning the system and/or its supervision).

36 Whilst it is not usually the case, it seems to me that in respect of this legislation the Second Reading Speech provides assistance. Whilst reservation may be had as to whether the statutory provisions do “give clear guidance” there seems to be a clear intention to bring about a change to what had been the defence and to restrict the availability of a defence to what is now provided by s87.

37 I consider that the intention was to provide a remedy for a problem (owners and operators were avoiding conviction for overloading under the previous defence). What is now the new statutory defence has been supplemented by additional provisions requiring proof as to the actual or constructive knowledge of directors and management.

38 Accordingly, I consider that the Magistrate has also misdirected herself in respect to the construction of the first element of the defence. Indeed, her decision on that question was not open on her own findings.

39 Therefore, I am of the view that the plaintiff has discharged the onus of demonstrating an error of law that justifies the disturbing of the decision.

40 The decision and orders of the Magistrate are set aside. The matter is remitted back to the Local Court for determination according to law. The defendant is to pay the costs of the Summons. If so entitled, it is to have a certificate under the Suitors Fund Act. The exhibits may be returned.

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