Industrial Court of New South Wales CITATION: Inspector Wong v Clarence Valley Council [2006] NSWIRComm 250 PROSECUTOR Inspector Daryl Wong PARTIES: DEFENDANT Clarence Valley Council FILE NUMBER(S): IRC 5291 of 2005 CORAM: Staff J CATCHWORDS: Occupational health and safety - Notice of motion - Local Council - Whether government corporation liable for breaches of the Occupational Health & Safety Act 2000 (NSW) alleged to have been committed by predecessor government corporation - Application for declaration - Whether criminal liability transferred to successor by Occupational Health & Safety Act 2000 - Interpretation of statutory provision - Whether successor government corporation - Held Successor - Declaratory relief refused - Occupational Health & Safety Act 2000, Section 123 Acts Interpretation Act 1901 (Cth) Interpretation Act 1987 (NSW) LEGISLATION CITED: Local Government Act 1993 (NSW) Occupational Health & Safety Act 1983 Occupational Health & Safety Act 2000 Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation and ors (1990) 171 CLR 216 Aveling v UBS Capital Markets Australia Holdings Ltd (2004) 135 IR 98 Commander Australia Limited v Kerr (2004) 134 IR 160 CASES CITED: Country Energy v Malone (2005) 138 IR 221 PP Consultants Pty Ltd v Finance Sector Union of Australia (2000) 201 CLR 648 WorkCover Authority (NSW) v Energy Australia (formerly Sydney Electricity) (1998) 85 IR 99 WorkCover Authority (NSW) v Rail Infrastructure Corp (2001) 111 IR 442 HEARING DATES: 26/07/2006 DATE OF JUDGMENT: 08/10/2006 PROSECUTOR Mr D O'Neil of counsel Solicitor: Mr J O'Connell WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: DEFENDANT Mr A Moses of counsel Solicitor: Mr P Roland Foott Law & Co JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: STAFF J 10 August 2006 Matter No IRC 5291 of 2005 INSPECTOR DARYL WONG v CLARENCE VALLEY COUNCIL Prosecution under s 8(1) of the Occupational Health & Safety Act JUDGMENT [2006] NSWIRComm 250 1 On 17 October 2005, the Court issued a summons to Clarence Valley Council ("the defendant") requiring it to answer a charge brought by Inspector Daryl Wong of the WorkCover Authority of New South Wales that it had committed an offence pursuant to s 8(1) of the Occupational Health & Safety Act 2000 ("the Act"). 2 On 3 March 2006, the defendant filed a notice of motion seeking a declaration that Clarence Valley Council is not liable for the contravention of the Act in respect of any alleged act or omission by Copmanhurst Shire Council on 17 November 2003. 3 The particulars provided in the notice of motion were: 1. The date of the alleged offence by the Defendant is 17 November 2003. 2. The Defendant was not in existence on 17 November 2003 but was formed on 25 February 2004 as a result of a proclamation by the Governor pursuant to Part 1, Chapter 9 and Part 5, Chapter 12 of the Local Government Act 1993 (NSW). The Defendant replaced four former general purpose Councils, including Copmanhurst Shire Council which was the employer of Mr Goodwin whose health or safety it is alleged was exposed to risk on 17 November 2003. 3. The Prosecutor's case is that the Defendant is taken to have done all the relevant acts which were in fact done by Copmanhurst Shire Council. This assertion is based upon the Proclamation by the Governor dated 25 November 2004 under the Local Government Act 1993 (NSW). In particular, reliance is placed by the Prosecutor on clause 16 of Schedule G: see letter dated 1 February 2006 from the Prosecutor's solicitor to the Defendant's solicitors. 4. Neither clause 16 of Schedule G of the Proclamation dated 25 February 2004 or the Local Government Act 1993 (NSW) imposes upon the Defendant the criminal liability of Copmanhurst Shire Council. 4 The central issue identified by the defendant requiring determination is whether it can, as a matter of law, be held liable for the criminal actions of Copmanhurst Shire Council as at 17 November 2003, when the alleged breach occurred. 5 The resolution of this issue involves the statutory construction of s 123 of the Act. 6 Section 123 is in the following terms: 123 Proceedings against successors of government corporations (1) In this section, government corporation means: (a) a corporation that is an agent of the Crown, or (b) a State owned corporation, or (c) a corporation that is an area health service or statutory health corporation within the meaning of the Health Services Act 1997, or (d) a local council or county council, or (e) a public or local authority that is declared by the regulations to be a government corporation for the purposes of this section. (2) Proceedings for an offence against this Act or the regulations that were instituted against a government corporation before its dissolution, or that could have been instituted against a government corporation but for its dissolution, may be continued or instituted against its successor if the successor is a government corporation. (3) Subsection (2) extends to proceedings that could have been instituted against a government corporation because of the operation of that subsection. (4) A penalty notice served on a government corporation for an offence against this Act or the regulations or any penalty paid by a government corporation in respect of such a penalty notice: (a) is taken to be a penalty notice served on its successor if the successor is a government corporation, or (b) is taken to be a penalty paid by any such successor, as the case requires. 7 There is no dispute that the defendant is a "government corporation" as defined in s 123. The Evidence 8 The defendant tendered an affidavit of David Keith Andrews sworn 2 March 2006. Mr Andrews is the Director of Engineering Services for the defendant. He was not required for cross-examination. Mr Andrews stated that the defendant was formed on 25 February 2004 as a result of a Proclamation by the Governor of New South Wales on that date pursuant to Pt 1, ch 9 and Pt 5, ch 12 of the Local Government Act 1993 (NSW). The defendant replaced four former general purposes Councils, namely Grafton City Council, Maclean Shire Council, Copmanhurst Shire Council and Pristine Waters Council, and two former special purpose Councils, Clarence River County Council and Lower Clarence County Council. 9 Mr Andrews stated that the six former Councils all ceased to exist on 25 February 2004, being the Proclamation date. 10 Mr Andrews annexed to his affidavit a copy of the Proclamation that was published in the New South Wales Government Gazette No 46 at 809 - 822. 11 The Proclamation defines "former Council" and "former County Council" as being those referred to earlier by Mr Andrews in his evidence. 12 It is relevant to set out particularly cl 9 and cl 16 of Schedule G of the Proclamation, which are in the following terms: 9 Activities of former Councils and former County Councils (1) Anything that was done or omitted to be done by a former Council or former County council and that had effect immediately before the proclamation date continues to have effect as if it had been done or omitted to be done by the new Council. (2) Anything that was commenced by a former Council or former County Council may be completed by the new Council as if it had been commenced by the new Council. (3) Without limiting subclause (1) any approval, order or notice that was given or made by a former Council or former County Council, and that had effect immediately before the proclamation date, continues to have effect as if it had been done or made by the new Council. … 16 Transfer of assets, rights and liabilities (1) The assets, rights and liabilities of the former Councils and former County Councils are transferred to the new Council. (2) The following provisions have effect in relation to any assets, rights or liabilities that are transferred by operation of subclause (1): a. The assets of the former Councils and former County councils vest in the new Council by virtue of this clause and without the need for any further conveyance, transfer, assignment or assurance, b. The rights or liabilities of the former Councils and former County councils become, by virtue of this clause, the rights and liabilities of the new Council, c. All proceedings relating to the assets, rights or liabilities commenced before the transfer by or against the former Councils or former County Councils or a predecessor of any of the former Councils and former County Councils, and pending immediately before the transfer, are taken to be proceedings pending by or against the new Council, d. Any act, matter or thing done or omitted to be done in relation to the assets, rights or liabilities before the transfer by, to or in respect of the former Councils or former County Councils or a predecessor any of the former Councils or former County Councils is (to the extent to which that act, matter or thing has any force or effect) taken to have been done or omitted by, to or in respect of the new Council. e. Anything that was commenced by a former Council or former County Council and uncompleted at the proclamation date may be completed by the new Council as if it had been commenced by the new Council. This includes but is not limited to any application for approval or consent under the Act or any other Act. f. In so doing, the new Council must make any determinations required to be made in accordance with any relevant code, policy or plan of the relevant former Council or former County Council, until such time as the new Council makes a new code, policy or plan in relation to that matter in accordance with the Act or any other Act. g. Anything that was done by a former Council or former County Council, and that had effect immediately before the proclamation date, or that was commenced by a former Council or former County Council and completed by the new Council as a result of this Proclamation, continues to have effect and may be enforced by the new Council as if it had been done by the new Council. h. Without limiting subclause (2)(g) any approval, order or notice that was given or made by a former Council or former County Council, and that had effect immediately before the proclamation date, continues to have effect and for all the purposes of the Act or any other Act shall be deemed to have been given or made by the new Council. i. Any decision of the Land and Environment Court in an appeal from a decision of a former Council or former County Council, determined by the Court after the proclamation date shall be deemed to be a decision of the new Council. (3) In this clause: Assets means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description (including money), and includes securities, streams of income, choses in action and documents. Liabilities means any liabilities, debts or obligations (whether present or future and whether vested or contingent) and includes liabilities relating to criminal acts. Rights means any rights, powers, privileges or immunities (whether present or future and whether vested or contingent). Principles of Statutory Construction 13 Recently, in Aveling v UBS Capital Markets Australia Holdings Ltd (2004) 135 IR 98, a Full Bench of the Court considered the question of statutory construction. After referring to the Full Bench decision in Commander Australia Limited v Kerr (2004) 134 IR 160, the Full Bench said at [18]: [18] Their Honours observed that it was not necessary for the purpose of the proceedings to refer in detail to the relevant approach to statutory construction except for the following principles which were described as "clear-cut": [35] ... First, to paraphrase what was said in the recent Full Bench judgment of this Court in Crowe v UCS Developments Pty Ltd [2003] NSWIRComm 234 at [63], albeit in respect of another part of the 2002 amending legislation (s 108B), the operation of the relevant provision is a question which, as with any issue of construction, may often be resolved by ascertaining the intention of the legislature from the express words of the instrument viewed in their context. [36] Second, a statutory provision must not be construed in isolation but in the context in which it appears as part of the whole instrument. Third, courts are obliged by statutory injunction to prefer a construction which would promote the purpose of a statute to one which would not. Fourth, the requirement to look to the purpose or object of the statute transcends the former obligation to adopt the traditional mischief or purpose rule in preference to the literal rule of construction because the earlier rule required the identification of an ambiguity or inconsistency before the court could have regard to purpose. Further, if the language of the statute or statutory provision is not ambiguous or uncertain, the court will apply its ordinary and grammatical meaning unless to do so will give the statute an operation that was obviously not intended: Mills v Meeking [(1990) 169 CLR 214] at 223. [37] The approach that is now required does not presuppose the existence of ambiguity or inconsistency; rather, it permits and requires the court to consider the purpose of the Act in determining whether there is more than one possible construction. In that respect, the context in which the relevant provision appears must be considered as part of the process of interpretation itself, and not merely at some later stage when ambiguity might be thought to arise. Finally, the reference of context is to be taken in its wider sense to include such matters as the existing state of the law and the mischief which, by reference to permissible extrinsic material such as explanatory memoranda and law reform reports, it might be discerned that the statute was intended to remedy: see, for example, CIC Insurance Limited v Bankstown Football Club (1997) 187 CLR 384 at 408; Mills v Meeking at 223; Police Association of New South Wales v Commissioner of Police (2002) 123 IR 301 at 312 - 317; Re Club Employees (State) Award and other Awards (2002) 122 IR 272; Fox v GIO Australia Limited (2002) 56 NSWLR 512; (2002) 120 IR 410 at [45] to [47]; Mitchforce Pty Ltd v Starkey (No 2) [2003] NSWIRComm 458 at [104]; Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSWIRComm 135 at [44] - [46]; and Re Crown Employees (New South Wales Fisheries Salaries and Conditions of Employment) Award (2003) 129 IR 369 at [66]. 14 Section 33 of the Interpretation Act 1987 (NSW) provides: In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object. 15 It is plain that reference to extrinsic material, such as parliamentary debates and papers, is permissible in the process of statutory interpretation: see s 34 of the Interpretation Act and s 15AB of the Acts Interpretation Act 1901 (Cth). 16 I shall approach the construction of s 123 accordingly. Consideration 17 The then Attorney General and Minister for Industrial Relations, the Hon J W Shaw in introducing the Occupational Health & Safety Bill 2000 into the Legislative Council on 26 May 2000 stated during the Second Reading Speech that: The Occupational Health and Safety Bill is a significant step in this Government's program of workplace safety reform. It is a modernisation of the pioneering legislation of 1983. It will provide the framework for workplace safety in the new technological era. The path to modernisation was commenced in 1996. 18 Referring to s 123 Mr Shaw said: … The bill contains two additional provisions clarifying government liability for occupational health and safety. These arose in the context of proceedings taken against government agencies rather than from workplace safety report recommendations. The important point is that the amendments ensure that prosecutions can be undertaken when they are warranted. One amendment clarifies that the responsible agency is entitled to act for the Crown in any enforcement proceedings. That agency will be the agency for the determination and payment of any penalty. The second amendment enables proceedings to be taken against the successor of a government corporation when the successor is also a government corporation. This will ensure that a change in the corporate make-up does not interfere with the protection of employees via appropriate prosecutions. By way of background, in an innovatory way, the 1983 legislation expressly bound the Crown and its agencies to give effect to occupational health and safety standards. That was an important reform at the time and we are extending and refining that provision in this bill. 19 In Country Energy v Malone (2005) 138 IR 221, the Full Bench of this Court considered whether liability for a criminal offence "transferred" to Country Energy as a statutory successor of Advance Energy in accordance with the provisions of the Occupational Health & Safety Act 1983. At [28] the Full Bench said: [28] We agree with the trial judge that the most useful decisions for present purposes are those referred to earlier in para [9]. Those decided cases establish the following principles: (a) absent statutory provisions to the contrary, the dissolution of a statutory body or corporation results in the abatement of criminal proceedings against the body: Sydney Market Authority at 135, Energy Australia at 228, Roads Corporation at 383. (b) if there is a successor of the defunct corporation the question whether any criminal liability of the former body will be assumed by the new body will depend on the terms of the statutory provisions (or possibly the delegated legislation) dissolving the former body and creating the new one: Energy Australia at 228. (c) examples of situations where criminal liability would be assumed by a successor body include where there is express legislative provision that the original and successor bodies are the same legal person or where the new body is created with the same legal personality as the former body: Energy Australia at 228 - 229, Rail Infrastructure Corporation at 474, Freight Rail Corporation at 114. (d) the ordinary meaning of the word "liability" is apt to embrace both criminal and civil responsibility but whether, in a particular case, the word does embrace criminal liability will depend on the statutory context in which it is used: Energy Australia at 230, Freight Rail Corporation at 114 and 118. (e) the mere transfer of the former body's staff, assets, rights and liabilities to the new body is unlikely to result in the two bodies being the same legal person: Energy Australia at 231 - 232. (f) the equating of the two bodies (the body dissolved and the new one) as the one body for the purpose of succession to criminal liability could only occur by legislative enactment which would usually be expected to be accomplished in words "clearly so stated": Energy Australia at 232, Freight Rail Corporation at 121, Roads Corporation at 384. 20 The Full Bench went on to briefly refer to successor provisions in other statutes and in the Occupational Health & Safety Act 2000, observing at [49] that in WorkCover Authority (NSW) v Rail Infrastructure Corp (2001) 111 IR 442 and also in WorkCover Authority (NSW) v Energy Australia (formerly Sydney Electricity) (1998) 85 IR 99, the legislature expressly provided that the successor body was to be considered as the same legal person as the former body, or having the same legal personality as the former body. 21 In referring to the enactment of the Occupational Health & Safety Act 2000, and in particular s 123 (which was not in force at the time of the offence that was considered in Country Energy), the Full Bench observed at [53]: The legislature in enacting these provisions, particularly s 123, appears to have accepted the approach of Hungerford J in the 1998 judgment in Energy Australia that if it was intended to transfer criminal liability from one statutory corporation to another or to equate a defunct body and its successor for such purposes it could be expected that the words used by the legislature would clearly state the requisite intention. We do not consider that the provisions considered in these proceedings do that. 22 The defendant submitted that it could not be contended that the defendant is a successor to Copmanhurst Shire Council as it carries on substantial activities which differ from the activities previously performed by Copmanhurst Shire Council. 23 I firstly turn to consider the words of s 123 of the Act. In my view, in light of the structure and effect of s 123 and its surrounding provisions, the clear intention of the legislature, as stated by the then Attorney General, is to ensure that a change in the corporate makeup of a government corporation does not interfere with the protection of employees that is provided in the objects of the Act which are to be found in s 3. These objects are to promote the health, safety and welfare of people at work. It was common ground that the defendant is a government corporation. It is clear from the terms of s 123(2) that "Proceedings for an offence against this Act … may be continued or instituted against its successor if the successor is a government corporation". The clear intent of the provision is to transfer criminal liability from one statutory corporation to another, or to equate a defunct body and its successor for such purposes as was observed by the Full Bench in Country Energy. So much was conceded by the defendant. 24 Section 123 therefore overcomes the determination by the Court in Country Energy. It means that specifically a government corporation taking over from another government corporation could be made a successor in law including in respect of criminal matters. 25 This leaves the question of the purpose of s 123 and whether the defendant council is a successor. This is a mixed question of fact and law to which reference should be made to the circumstances of this matter. 26 I consider that s 123 has the purpose of transferring criminal liability from one government corporation to another providing that the government corporation is a successor. 27 It is therefore necessary to determine what is a successor. Viewed in its proper context, s 123 deals in particular with Crown employment in that context, and not in the private business context. For example, s 123(1) includes State owned corporations, a corporation that is an area health service or statutory health corporation. It also includes a local council or a county council. 28 The word "successor" is defined by the Internet site Dictionary.com, as "a person who follows next in order; a thing or person that immediately replaces something or someone; a person who inherits some title or office". Black's Law Dictionary (Seventh Edition) defines successor as "a person who succeeds to the office, rights, responsibilities, or place of another; one who replaces or follows another; a corporation that, through amalgamation, consolidation, or other assumption of interests, is vested with the rights and duties of an earlier corporation". 29 In light of the meaning I have discerned s 123 to have, in my view, it is not necessary to undertake the extensive examination set out at [28] of Country Energy (referred to earlier in this judgment) to determine the issue that arises in this matter. However, it is necessary to determine when successorship occurs. The defendant is a new agency which includes the former Copmanhurst Shire Council, irrespective for the most part what form it takes. In light of that resolution, critical in dealing with the question is the Proclamation. Proclamations of this kind would not normally affect criminal proceedings but rather only civil matters. However, this Proclamation clearly preserves criminal proceedings that were commenced, or could have been commenced. The factual situation here is that a small council has become part of a larger council. It appears that the defendant has taken over broader activities than the activities previously undertaken by Copmanhurst Shire Council, although its activities form some part of it. This is a factor of successorship. 30 There was some reference during the hearing to authorities that deal with successorship in the context of industrial awards. The test applied by the High Court in Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation and ors (1990) 171 CLR 216 ("the ATOF case") at 230 which was followed in a subsequent case (see PP Consultants Pty Ltd v Finance Sector Union of Australia (2000) 201 CLR 648) is whether there is a substantial identity between the old activities carried out by the previous government corporation and those now carried on by the successor government corporation which correspond with the old activities. 31 Turning to the Proclamation itself, it makes clear in Schedule G, cl 1 Definitions, that the former area of Copmanhurst Shire Council is constituted as the defendant and "former Council" includes Copmanhurst Shire Council. 32 Clause 9 of the Proclamation (set out at [12] of this judgment) provides anything done, omitted or commenced by a former Council continues to have effect as if done, omitted or commenced by the new Council. 33 Clause 16(1) of the Proclamation provides for the transfer of assets, rights and liabilities from the former Councils to the defendant. In accordance with the decision of the Full Bench in Country Energy, without more, such a transfer would not be sufficient to result in the "transfer" of criminal liability. However, cl 16(2)(c) provides all proceedings relating to assets, rights or liabilities commenced before the transfer of a Council are taken to be proceedings pending against the defendant and cl 16(2)(d) makes similar provision in respect of any act, matter, or thing done or omitted to be done in relation to assets, rights or liabilities. 34 Finally, cl 16(3) defines liabilities as meaning "any liabilities, debts or obligations (whether present or future and whether vested or contingent) and includes liabilities relating to criminal acts". 35 The defendant contended that whilst cl 16(3) defined liability to include those relating to criminal acts, this should be construed as the civil liability of the defendant to pay damages arising out of criminal acts of Copmanhurst Shire Council, not as it being liable to be convicted of a criminal offence that it did not commit. I reject this submission. On a proper reading of the Proclamation, there is a clear intention for the transfer of criminal liability (see cl 16(3)). There is no reason to read down the reference in cl 16(3) to liability as having applicability only to civil liability arising out of criminal acts. It would not be appropriate, in my view, to so constrain the clear meaning within the Proclamation as contended for by the defendant. 36 In my view, and I find, the defendant is a successor to Copmanhurst Shire Council. It follows that the effect of s 123 is that on 25 February 2004 the criminal liability incurred by Copmanhurst Shire Council was transferred to the defendant. 37 Although counsel for the defendant raised whether there was sufficient evidence before the Court, I am satisfied that the evidence before me enables the determination of the issue raised by the notice of motion. 38 For these reasons, I therefore decline to grant the declaration sought by the defendant. ORDERS 39 The Court makes the following orders: 1. The notice of motion is dismissed. 2. The usual cost order would be that the defendant pay the prosecution's costs, as agreed, or assessed. If there is any disagreement about the terms of that order, the parties have liberty to apply, which should be exercised within 21 days. 3. This matter is listed for plea and/or directions at 9.30 am on Monday 4 September 2006. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.