Country Energy v Malone [2005] NSWIRComm 78 | Case summary

Country Energy v Malone [2005] NSWIRComm 78 | Case summary | Zoe

[13]

Application by Country Energy for leave to appeal and appeal against the judgment of Justice Haylen given on 7 November 2003 in Matter No IRC 2343 of 2002 JUDGMENT OF THE COURT [2005] NSWIRComm 78 1 An explosion occurred on 27 April 2000 during the performance of maintenance work at the Orange South electricity sub-station of Advance Energy. The explosion caused injuries to Mr Phillip Dennis who was employed by Advance Energy as an Electrical Sub-Station Technician. A prosecution was subsequently brought on 24 April 2002 against the appellant by the respondent, an inspector of the WorkCover Authority of New South Wales, alleging a breach of s 15(1) of the Occupational Health and Safety Act 1983. 2 The year after the explosion, in 2001, a merger (for want of a better description) occurred between the bodies then known as Advance Energy and Country Energy by the making of certain instruments pursuant to the Energy Services Corporations Act 1995 and the Electricity Supply Act 1995. 3 The prosecution brought by the respondent against the appellant alleged a breach of s 15(1) of the Occupational Health and Safety Act in its failure to ensure the health, safety and welfare at work of all of its employees, including Mr Dennis and other named employees, in that it failed to provide or maintain a safe system of work. 4 In the charge the respondent alleged that: The Defendant, Country Energy, is the statutory successor of a previous statutory body corporate, Advance Energy. Advance Energy was a statutory state owned corporation by virtue of Section 20A and Schedule 5 of the State Owned Corporations Act 1989 and by virtue of a merger which took place in 2001, Schedule 5 of the State Owned Corporations Act 1989 was amended by Section 7(b) of the Energy Services Corporations Act 1995 which had the effect of creating a new statutory body corporate, Country Energy which has assumed all the rights, obligations and duties of Advance Energy and is taken to be the successor in law of that entity. As at the 27 April 2000, the Defendant was known as Advance Energy. 5 The appellant contended at first instance that the transfer of liabilities from Advance Energy to the appellant did not include the transfer of criminal liability and that it could not be prosecuted for the offence alleged. Haylen J rejected the appellant's contention: Inspector Barry Malone v Country Energy [2003] NSWIRComm 369. 6 The present proceedings involve an application for leave to appeal and an appeal pursuant to s 196(1) of the Industrial Relations Act 1996 and s 5F of the Criminal Appeal Act 1912 against the decision of Haylen J. During the course of the hearing the appellant made an application for declaratory relief pursuant to s 154 of the Industrial Relations Act 1996. This occurred for reasons which will be referred to in detail subsequently in paras [54] and following.

[21]

Firstly, reference may be made to the judgment of Hungerford J in WorkCover Authority of New South Wales (Inspector Rech) v Sydney Market Authority (1997) 82 IR 134. The Sydney Market Authority was a statutory corporation representing the Crown but was proposed to be dissolved by Act of Parliament in circumstances where there would be a sale of its business undertaking to private enterprise. It was common ground that if the prosecution case was not finalised before the dissolution of the Authority, then the charges would abate and effectively lapse as there would be no defendant and the position would be indistinguishable from that where there was a death of a natural person. The statutory provisions dealing with the sale of the business and the dissolution of the Authority provided that the assets, right and liabilities of the Authority became the assets, rights and liabilities of the Crown. These words were held to deal with civil matters only and in the absence of an express provision or a provision by necessary implication dealing with criminal liability of the Authority, none could be transferred to the purchaser of the business or any other entity. In such circumstances, it was concluded that the legislature had chosen not to maintain the entity for the purposes of finalising criminal charges. 11 His Honour then referred to his judgment in the Rail Infrastructure Case, and particularly para [90] thereof, which was in these terms: [90] A case more closely resembling the circumstances which arise here is WorkCover Authority (NSW) (Inspector Gilbert) v Energy Australia - formerly Sydney Electricity (1998) 85 IR 99. That case involved a prosecution under s 15(1) of the Act concerning a linesman formerly employed by Sydney Electricity which had become Energy Australia. On a plea of guilty, Energy Australia had no prior convictions but Sydney Electricity, the original defendant and its predecessor, the Sydney County Council, did have prior convictions. The prosecution sought that the prior convictions be taken into account against Energy Australia. Objection was taken by the defendant which submitted that there was not a mere name change to Energy Australia but there was created a separate legal entity. Here, there had been amalgamations of a number of legal entities and a separate management structure with a new focus on safety and a new corporate culture. Hungerford J held that, whether the charges continued after Sydney Electricity was dissolved depended upon the statutory transitional provisions under the Energy Act by which the new entity assumed the functions of Sydney Electricity. His Honour noted that the ordinary rule was that on the dissolution of a defendant statutory corporation to a criminal charge, the charge abates and effectively lapses because there is no continuing legal person in existence against which proceedings may be maintained: Rech [(1997) 82 IR 134]. Where the legislature creates a successor statutory corporation, the question of whether any criminal liability of the former body is assumed by the new body will depend on the terms of the stature effecting the dissolution on one hand, and the creation on the other. His Honour then stated (at p 113): In other words, if the legislature by express enactment provides the original and the successor bodies are one and the same legal person, then it would follow that an undetermined criminal charge against the former would continue against the latter unaffected by the fact that the former was indeed dissolved. It may even follow that proceedings in respect of a criminal charge for an offence committed by the former body could be instituted against the new body even after the former had been dissolved, provided, of course, that any statutory limitation period did not otherwise operate as a bar. Again, the reason would be the new body was created with the same legal personality as the former body. His Honour accepted that, where transitional provisions allowed a 'liability' of the previous entity to be transferred to the new entity, the word 'liability' was apt to embrace both criminal responsibility and civil responsibility: Byrne v Garrisson [1965] VR 52 at 528. The appropriate meaning and whether there should be an extended meaning will depend on the statutory context in which it is used. Importantly, in that case, his Honour was required to consider yet another body within the statutory framework where there was a subsequent dissolution and the constitution of another statutory State owned corporation. The transitional provisions provided that on and from the dissolution of the first body, the new body was 'taken for all purposes … to be a continuation of, and the same legal entity as' the previous body. His Honour was of the view that such a statutory transitional provisional evinced a clear intention to transfer the criminal liability of the new body. 12 It will be noted that his Honour in that extract closely analysed the judgment of Hungerford J in Energy Australia which he then distinguished in this way: [31] In the Energy Australia case it seems that Hungerford J was much influenced by the fact that the statutory scheme simply did not constitute in any way MetNorth 1 as the same legal entity as Sydney Electricity and in fact they both continued with a simple transfer of staff and assets. The statutory scheme in the present matter needs therefore to be considered in the light of these approaches and what was actually transferred and in what circumstances. At this point, it is of some relevance that the dissolution of Advance Energy was simply a means by which to enlarge the area of operation of Country Energy. As demonstrated in Roads Corporation v Gerkens , specific statutory provisions may indicate a limited transfer of liabilities, excluding criminal liability. There are no provisions in the present legislative scheme under consideration which reflect the Victorian case and this is not a case like the Sydney Markets where the statutory body was dissolved, its business sold to private enterprise and therefore the criminal liability abated. In my view, this case comes down to whether the legislative scheme, properly construed, simply transfers civil liabilities or whether there is a clear indication that both civil and criminal liability is transferred. 13 The basis upon which his Honour decided the issues before him are succinctly set out in paras [32] to [37] of his judgment, as follows: [32] The legislative scheme in the present matter is complicated by the existence of a number of pieces of legislation and regulations made thereunder having a role to play in the dissolution of existing entities and the creation of new entities. It was common ground that Advance Energy and Country Energy were energy distributors created under s 7 of the Energy Services Corporations Act 1995 and were considered to be State Corporations under the State Owned Corporations Act 1989. The next step appears to be that under the provisions of the Energy Services Corporations Act 1995, s 13 permitted the creation of additional energy services corporations and s 14 permitted the dissolution of existing energy services corporations. It was said by the defendant that the joint operation of these provisions allowed firstly, Advance Energy to be dissolved pursuant to s 14 and the expanded Country Energy to be created by s 13. Under s 14(5), regulations may contain provisions of a savings or transitional nature consequent upon the dissolution of any energy services corporation under the section. In addition, s 15(1) gave the Minister a discretion to direct, by order in writing, that any specified staff, assets, rights or liabilities of an energy services corporation that had been dissolved by this Act be transferred to such other energy services corporation or to such other person or body acting on behalf of the Crown as specified in the Order. So far, this legislative scheme by referring generally to assets and liabilities permitted either civil or criminal liabilities to be transferred (see the approach of Hungerford J in Energy Australia ). [33] Pursuant to s 14, it appears that the Energy Services Corporations (Dissolution of Energy Distributors) Regulation 2001 was promulgated. Clause 7 of the Regulation was entitled, "Country Energy may act in its own name or in name of Great Southern Energy or Advance Energy". Sub-clause 1 of Clause 7 provided that on and from the commencement of the regulation, Country Energy may act in its own name as the "universal successor" of Great Southern Energy or Advance Energy (or, if necessary, may act in the name of Great Southern Energy or Advance Energy). Under sub-clause 2, it was provided that sub-clause 1 applied for "all purposes, including for the purpose of the rules of private international law". Under sub-clause 5, in the clause, the words "asset, right and liability" had the same meaning as they had in Schedule 3 to the Act. In turn, Schedule 3 entitled, "Transfer of staff, assets, rights and liabilities" defined "liabilities" as meaning "any liabilities, debts or obligations (whether present of future and whether vested or contingent). [34] The next relevant step, which only came to light just prior to the commencement of the hearing, was publication of a Notice of the making of an Order by the Minister for Energy under the Electricity Supply Act 1995. In the Government Gazette of 29 June 2001, the Minister for Energy gave notice of the making of an order under s 85 of the Electricity Supply Act 1995 directing the transfer of all assets, staff, rights and liabilities of Advance Energy and Great Southern Energy to Country Energy to take effect on the beginning of the day on 1 July 2001. The Order itself defined the word "assets" "rights" and "liabilities" to have the same meaning as they had in Schedule 4 to the Electricity Supply Act. It also defined "business" to mean all the activities and operations of Advance Energy and Great Southern Energy as at the transfer day and included the activities and operations of any subsidiaries of Advance Energy and Great Southern Energy. Under Clause 4 of the Order, all staff, assets, rights and liabilities of the former electricity distributors (defined to include Advance Energy) were transferred to Country Energy. Clause 5 was an acknowledgement by Advance Energy that it had agreed with Country Energy and the Minister had agreed that the transfer of assets, rights and liabilities to be effected upon the making of this Order, "is the supplier of a going concern within the meaning of sub-division 38-J of the GST Act ", a reference to Commonwealth legislation, namely, A New Tax System (Goods and Services Tax Act) , 1999. Under Clause 6, it was acknowledged in sub-clause (iii) that on the making of the Order, and by virtue of the operation of the Order, Advance Energy supplied to Country Energy all the things that were necessary for the continued operation of the enterprise comprising the business (itself being a reference to all the activities and operations of Advance Energy).

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Overall, I am satisfied that the legislative intention is that the defendant, Country Energy, has had transferred to it, amongst other things, the criminal liability of Advance Energy. The result is that the defendant is properly named in the charge and the Court may proceed to hear that charge against the defendant. 14 It is to be noted that his Honour's reasoning commenced with the finding that ss 13 and 14 of the Energy Services Corporations Act permitted the creation of additional energy services corporations and the dissolution of existing corporations. Further, that s 14(5) and s 15(1) of that statute respectively provided regulation-making power for the making of savings or transitional provisions consequent upon the dissolution of existing corporations and provided power to the Minister to direct, by order in writing, that any specified staff, assets, right and liabilities of such corporations, that had been dissolved by the statute, be transferred to such other energy services corporation or such other body or person acting on behalf of the Crown as specified in the order. 15 Relying on the approach of Hungerford J in Energy Australia his Honour held that the legislative scheme "by referring to assets and liabilities permitted either civil or criminal liabilities to be transferred". 16 His Honour then held (at least inferentially) that all of the relevant subsequently made regulations and orders were within the powers granted by the relevant provisions of the legislation. His Honour considered each of those provisions in detail but held that, as to the "myriad of provisions", the clearest legislative intent (and thus decisive to his Honour's decision) was to be found in clause 7 of the Energy Services Corporations (Dissolution of Energy Distributors) Regulation 2001 and, within that context, significant was the fact that Country Energy was described as the "universal successor" of both of its earlier constituents, that is, Great Southern Energy (and relevantly for present purposes) Advance Energy. His Honour found that that matter and the acknowledgment in the Minister's order that the "business is an on-going and continuing business" helped strengthen the conclusion that both civil and criminal liabilities had been transferred to the new body. 17 As to the first of these limbs of his Honour's conclusions, his Honour relied heavily on the respondent's submission that the concept "universal successor" in the regulation involved something more than a "successor" simpliciter. His Honour relied in that respect on the judgment of Fry J in Corporation of Hyde v Bank of England (1882) 21 Ch D 176. 18 His Honour also emphasised that he found it persuasive that clause 7 of the 2001 Regulation not only made Country Energy the universal successor of Advance Energy but did so "for all purposes, including for the purposes of the rules of private international law". His Honour found that while this verbiage was not identical to that found in the Rail Infrastructure case the similarity was striking; and in the Rail Infrastructure case the Rail Infrastructure Corporation was taken for all purposes to be, including the rules of private international law, a continuation of the same legal entity as the two amalgamating bodies. His Honour considered that there was also force in the submission for the respondent that clause 7(3) dealt with the transfer of assets, rights and liabilities whereas clause 7(1) dealt with Country Energy as being the "universal successor" and clause 7(1) could therefore not be simply performing the same task as clause 7(3). Significantly in that regard was that clause 7(3) was said to operate "without limiting sub clause (1)". Submissions of the Appellant

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19 Mr J J Fernon SC appeared for the appellant, and emphasised that the transfer of liabilities from Advance Energy to the appellant under the provisions of the Energy Act and the Energy Regulation did not include a transfer of criminal liability. Senior counsel carefully analysed the earlier decisions of this Court on similar issues. 20 Specifically it was contended that the Rail Infrastructure case was plainly distinguishable as in that case there was no question as to whether the criminal liability of one entity had been transferred to another entity because the legislation expressly stated that the two entities were in fact one. Conversely, in the present case the legislature had intended to establish the appellant as a new and separate entity. The appellant took on, within the meaning of the term "universal successor", the assets, rights and liabilities of Advance Energy. 21 Senior counsel also placed significant reliance on the judgment in Roads Corporation v Gerkens (1993) 6 VAR 363 where Eames J stated that "one would not normally expect that [the] criminal liability of [one] company would be transferred to a company which purchased the business of the former" and his Honour's conclusion that "[i]n the absence of direct authority, and notwithstanding the social benefits to which the Occupational Health and Safety Act is directed, I consider that it would be untenable to conclude that the words 'successor in law' were intended, by such a vague and general approach, to impose criminal liability upon the Roads Corporation for offences committed by the RTA." 22 The appellant submitted that upon its proper construction the relevant provision of the regulation was too "vague and general" to impose criminal liability upon Country Energy for any offence alleged to have been committed by Advance Energy. 23 Particular issue was taken with the proposition accepted by his Honour that the term "universal successor" in clause 7(1) of the Energy Regulation refers to something more than a "successor simpliciter". Even if his Honour was correct, it was submitted that it did not follow from this that the use of the expression "universal successor" involved transfer of criminal responsibility. Submissions of the Respondent

[49]

(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. 29 We regret, however, that we are not able to accept as correct his Honour's conclusions as to the meaning and effect of the pertinent parts of clause 7 of the Regulation. 30 In particular, we do not agree with his Honour's view that the reference in clause 7 to Country Energy being the "universal successor" of Advance Energy can be properly construed as resulting in any criminal liability of Advance Energy being assumed by Country Energy upon the dissolution of Advance Energy. 31 The reasons for our conclusions may be stated in short summary terms in this way. First, the judgment under appeal did not have regard to the precise and limited way in which clause 7(1) of the crucial Regulation referred to Country Energy as the "universal successor" of Advance Energy. Second, the concept of "universal successor" does not appear to have been used in any relevant context outside the area of civil (in the sense of non-criminal) law or in any context where it was relevant to the assumption of criminal liability. 32 We now elaborate the bases for our conclusions. Clause 7(1), which as earlier noted was heavily relied on by his Honour, referred to Country Energy as the "universal successor" of (relevantly) Advance Energy. A close examination of the text of clause 7(1) shows that it refers to Country Energy as the "universal successor" in a very limited and particular way. It enables Country Energy to do relevantly two things: first, to act in its own name as the universal successor of Advance Energy; and second, if necessary, to act in the name of Advance Energy. Clause 7(1) does not however deal in any way with the manner in which Country Energy could be prosecuted, sued or proceeded against as if it were Advance Energy. 33 Similarly, clause 7(2), as his Honour observed, provides that clause 7(1) "applies for all purposes, including for the purpose of the rules of private international law". However, that provision only applies, as does clause 7(1), to permit Country Energy to act in certain ways. It does not in any way deal with the manner and subject matter in respect of which Country Energy may be prosecuted, sued or proceeded against. 34 Clause 7 of the Regulation deals with the actual transfer of assets, rights or liabilities from Advance Energy to Country Energy. That was effected by the Ministerial order gazetted on 29 June 2001 when the Minister directed the transfer of "all assets, staff, rights and liabilities of Advance Energy" under s 85 of the Electricity Supply Act 1995 to Country Energy. The power to issue that order was, as earlier noted, authorised by s 15(1) of the Energy Services Corporations Act as well as s 85 of the Electricity Supply Act. 35 Section 15(3) of the latter Act provides that Schedule 3 of the statute applies to the transfer of staff, assets, rights or liabilities under the section. As noted earlier, clause 8 of that Schedule defines liabilities to mean "any liabilities, debts or obligations (present or future and whether vested or contingent)". 36 We observe here that the particular definition of liabilities does not, on its face, readily lend itself to encompass the notion of criminal liability but seems rather to be directed to civil liabilities or obligations. 37 Clause 7(3) of the Regulation must be therefore read in the light of the terms of s 15 of the Energy Services Corporations Act and the relevant parts of Schedule 3 thereof. When so read, it will be seen that the powers given thereby are powers to ensure that there is plenary power in respect of the transfer of assets, rights and liabilities and plenary power to act in relation to such matters after transfer. Again, there is nothing on the face of this provision which would indicate that what is being referred to is anything other than civil rights or liabilities or legal proceedings in respect of such civil rights or liabilities. Certainly, there is no clear indication that the drafter of the Regulation was considering criminal responsibility or responsibility for criminal offences. 38 Haylen J expressed the view if criminal liability were not transferred pursuant to clause 7(1) then that would indicate that clause 7(3) was purely surplusage since clauses 7(1) and 7(3) would seem to be otherwise dealing with the same matters. We do not agree. Clause 7(1) means what it says. It gave to Country Energy the authority to act in its own name as the "universal successor" of Advance Energy and indeed to act in the name of Advance Energy. Clause 7(3), although no doubt inserted in part for more abundant caution, provided Country Energy with power "if it is necessary to do so" to act in the name of Advance Energy under the law of any country to perfect the transfer of any asset, etc or to take, defend or maintain legal proceedings in respect of any such asset, etc. Although there is certainly a degree of overlap between clauses 7(1) and 7(3) it cannot be said that one provision is merely repetitive of the other. The expression "universal successor"

[52]

We understand that one of the sources of the law of Louisiana is French civil law. 40 Dictionary.com gives the source of the two definitions above as the 1996 edition of Merriam-Webster's Dictionary of Law. The site also gives cross-references to the expression "universal successor" in the well-known volume by Oliver Wendell Holmes entitled The Common Law. In the 1963 DeWolfe Howe edition of Holmes' book, there are references to "universal succession" at pp 269 and 281. The first reference is in the section entitled "Successions after Death" and notes that executors and administrators "afford the chief, if not the only, example of universal succession in English law". It is explained however that such successors do not succeed to all kinds of property because, although the personal estate goes to them, land takes another course. At p 281 there is reference to "universal successor" in the section entitled "Successions Inter Vivos" in the context of Roman Law. It is noted there that, in general, universal successors stand in the place of heirs, and the Roman heir, with one or two exceptions, was always a universal successor. 41 Reference should be made to the judgment referred to by Haylen J: that is, the judgment of Fry J in Corporation of Hyde v Bank of England (1882) 29 Ch D 176. It will be recalled that his Honour dealt (at [36]) with that case in the following way: I accept the force of the prosecutor's submission that the term "universal successor" in the Regulation is something more than a "successor" simpliciter. As far back as 1882, Fry J found that when a district of a local Board was incorporated as a Borough, all the property of the Board vests at once in the Corporation without the necessity of any conveyance or transfer. In reaching this view, Fry J was able to say that it was obvious that the general scope and intention of the clauses was to make the Corporation "the universal successor to the local Board - to place it as regards all its powers, and as regards all its property also, entirely in the same position as the local Board". I do not see anything in the various provisions and definitions that were provided to the Court which would detract from that proposition in this case: Country Energy stepped into the shoes of Advance Energy for the purposes of continuing the business of that entity and to act in its name. Interestingly, Country Energy could take proceedings in the name of Advance Energy under Clause 7(3) of the Regulation. 42 It is however important to note precisely what Fry J said in relation to the notion of "universal successor". It appears from the report that his Lordship's use of the expression was as a shorthand description of the very detailed transitional provisions contained in s 310 of the Public Health Act 1875 (UK). The expression "universal successor" was not used in the section. Specifically, what his Lordship referred to was that the intention of the clauses in making the successor corporation the successor to the local Board was "to place it as regards all its powers, and as regards all its property also, entirely in the same position as the local Board". As to construction of other parts of the provisions vesting property and powers in the corporation his Lordship considered that the provisions should not receive a narrow construction "but in its true meaning it appears to me to extend to everything in the nature of property which, if the Act had not passed, would have come to the hands of the Board". It will be seen that his Lordship in referring to the corporation as the "universal successor", was merely referring to it as being the donee or recipient of plenary powers and property rights. Again, there is nothing in his Lordship's judgment in Corporation of Hyde v Bank of England which would indicate that anything that his Lordship said was to be construed as extending to the transfer or assumption of criminal liability. Certainly, the judgment has no more then indirect relevance to the present issue. 43 It is clear that the concept of "universal successor" is one derived from the Roman Law and utilised in Civil Law systems. The concept was discussed in some detail by Viscount Simonds in National Bank of Greece and Athens v Metliss [1958] AC 509 at 524 - 525: The question is rather one of principle and analogy, though analogies are dangerous and principles difficult to state with precision. The analogy, which has found some favour with the courts below and is not without its use, is in the conception of universal succession. That is a conception of the Roman law which found its way into many systems of law including, as my noble and learned friend, Lord Keith of Avonholm, has pointed out, the law of Scotland. It may be assumed that the Greek legislature, using the words "universal successor" in the relevant Act, was looking to the familiar principle under which the heir was the universal successor of his testator and regarded as eadem persona cum defuncto, and was asserting the identity of the new company with the old. But I do not care to rest my opinion on a conception which is, at the least, artificial. The fact is that the new company is a new juristic entity which was not a party to any contract with the respondent, and I do not think that, when a competent legislature has created a corporation and vested in it all the powers, assets and liabilities of an old corporation, which is then dissolved, anything is added by a further reference to universal succession, unless, indeed, it can be said that such a reference makes the path seem more familiar and, therefore, easier. In the same way it is easier to recognise the validity and efficacy of such a transfer if one recalls the many examples of statutory amalgamation of undertakings in this country and, no doubt, in other countries. It might be said that it has become a commonplace feature of commerce and industry in the modern state that such amalgamations should take place, and that it has become a matter of comity to recognise them except in so far as they are in conflict with the positive law of the country where it is sought to give effect to them. 44 The reference by Viscount Simonds to the speech of Lord Keith is to the following part of his Lordship's judgment, at 530: I find it easier, however, to approach the matter from the point of view of succession. The appellants were expressly declared by the relevant Greek statute and subsequent royal decree to be the "universal successor" of the banks which were absorbed and extinguished by the amalgamation decree. This conception, as expounded in the evidence in this case, is common to other legal systems which have borrowed from the Roman law. Used generally with reference to an heir who takes up a succession on death, it carries with it a liability on the heir to the deceased's creditors for the deceased's debts. From this aspect he represents the deceased. The persona of the deceased is regarded as continued in the heir, or, as it is otherwise expressed, he is eadem persona cum defuncto. He is no more to be regarded as a new party introduced into a contract than is an executor or administrator of a dead man's estate in English law. The term "universal successor" may be foreign to English law but it cannot be regarded as strange in this House for the doctrine is part of the common law of Scotland, though now affected by statute, and, till within the last hundred years, had important consequences to the heir in a succession. As such the doctrine would not appear to have differed in its fundamental principles from the common law of Greece. I would quote only one short passage from Stair, III.4.23: "Heirs in law are called universal successors, quia succedunt in universum jus quod defunctus habuit, they do wholly represent the defunct, and are as one person with him, and so they do both succeed to him active, in all the rights belonging to him, and passive, in all the obligations and debts due by him." 45 Both of the judgments use the Latin phrase eadem persona cum defuncto (the same person as the deceased) as equivalent to, or synonymous with, the expression "universal successor". This might, at first glance, seem to support the contentions of the respondent. Two considerations must however be noted. First, the contexts in which both expressions are used are commercial contexts dealing with succession to property or to rights and liabilities under contract. Second, the analogy which led to the use of the Latin phrase was that of "an heir who takes up a succession on death". An heir, or executor or administrator in Anglo-Australian law, does not, on the death of the testator, succeed to the testator's liability for criminal acts or to criminal proceedings commenced against the testator before his demise. 46 Lastly, reference may be made to the judgment of Colman J sitting in the Queen's Bench Division (Admiralty Court) in Centro Latino Americano de Commercio Exterior S.A. v Owners of the Ship "Kommunar" (the "Kommunar") (No. 2) [1997] 1 Lloyd's Law Reports 8. The facts of that case need not be considered in detail. It concerned Admiralty proceedings where the defendants, whose vessel had been arrested, applied to have the arrest set aside on the basis that the defendants were not, at the time the relevant cause of action arose, the owner or charterer of or in possession of any ship or the defendants were not the party liable in personam on the claim. This issue required consideration of legal succession issues as to the ownership of the vessel arising from the privatisation of a Russian state enterprise. Colman J considered a number of decisions of the House of Lords in which the expression "universal successor" was referred to, being Adams v National Bank of Greece [1961] AC 255 and the judgment earlier referred to, National Bank of Greece and Athens S.A. v Metliss. In that context, his Lordship made this observation: It is clear from Adams v. National Bank of Greece , [1961] A.C. 255 that Metliss is to be treated as a case where the English Courts recognized the effect of the universal succession prescribed by the Greek legislation as being to make the successor bank the party which in the eyes of English law was to be treated as liable for the debt following upon the coming into effect of the legislation. That is not to say that the successor company was the same legal entity as the original debtor but rather that it became the transferee under Greek law of the assets and liabilities of the latter corporation. (emphasis added) 47 The extract from the judgment of Colman J usefully synthesises the various references to the expression "universal successor" earlier in these reasons. It also shows that notwithstanding the width of the expression, it does not mean that the successor body is the same legal entity as its predecessor but merely that it has certain legal attributes of the predecessor. 48 In summary on this issue, we consider that there is nothing in any of the references to "universal successor" either in clause 7 of the relevant Regulation or in any of the definitions or cases referred to which would indicate that, notwithstanding the width of the expression "universal successor", the use of that expression was intended by the legislature or the maker of the Regulation to result in Country Energy being the same legal entity as Advance Energy, to result in the "transfer" of criminal liability from Advance Energy to Country Energy or (to put the last proposition in a slightly different way) to result in the assumption by Country Energy of any criminal liability on the part of Advance Energy. Successor provisions in other statutes and in the Occupational Health and Safety Act 2000

[53]

49 It is instructive to consider how criminal liability has been mandated by the legislature to accrue to or be assumed by a successor statutory body. Reference has already been made how that occurred in the Rail Infrastructure case and also in the Energy Australia case where 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. 50 It is also useful to consider how the legislature dealt with this matter in 2000 when it enacted the Occupational Health and Safety Act of that year. It must of course be recognised that the provisions of that statute did not apply to the present proceedings because the offence alleged in this matter occurred in April 2000 and the Occupational Health and Safety Act 2000 did not come into force until 1 September 2001. 51 The Occupational Health and Safety Act 2000 dealt with the issue in ss 118 to 123. Sections 118 and 119 provided that the Act binds the Crown and that the Crown in any capacity may be prosecuted for an offence against the Act or Regulations. Further, that in respect of an offence against the Act committed or alleged to have been committed by an agency of the Crown that is a corporation, the corporation itself and not the Crown is to be prosecuted for the offence. 52 Section 123 deals with proceedings against successors of government corporations and s 123(1)(b) provides that for the purposes of the section the expression "government corporation includes a State owned corporation" and s 123(2) and (3) are to be read in the light of that definition. Those provisions are in the following terms: (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. 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. Application for declaratory relief

[54]

54 Finally, it is necessary to deal with a matter which was raised with counsel during the course of argument. This matter related to the Full Bench judgment in Morrison v Joy Manufacturing Co Pty Ltd [2004] NSWIRComm 107 where, at [58], it was held that the Commission in Court Session had no jurisdiction to hear appeals from interlocutory judgments and orders in its summary jurisdiction pursuant to the combined operation of s 5F of the Criminal Appeal Act and s 196 of the Industrial Relations Act. 55 Each of the parties was given leave to file further written submissions in respect of the issue. The respondent made no further submissions as, during oral argument, he had advised he did not wish to stand in the way of this Court determining the issue on its merits. 56 In its written submissions, the appellant accepted that the reasoning in Morrison v Joy Manufacturing was applicable in this case. It then sought leave to make an application for a declaration of right pursuant to s 154 of the Industrial Relations Act in the following terms: Country Energy is not liable for the contravention of the Occupational Health & Safety Act 1983 alleged by the Prosecutor, Inspector Barry Malone, in No IRC 2342 of 2002 in respect of any alleged act by or omission of Advance Energy at the Orange Electricity Substation, Lords Place, Orange on 27 April 2000. 57 Section 154 of the Industrial Relations Act empowers the Commission in Court Session to make binding declarations of right in relation to a matter in which the Commission (however constituted) has jurisdiction. The Court Session may do so, whether or not any consequential relief is or could be claimed. We consider s 154 enables this Court to grant the declaratory relief claimed by the appellant. Although the use, in the provision, of the phrase "in relation to a matter in which the Commission ... has jurisdiction" may be somewhat ambiguous, we consider that the intention of the legislation in enacting the provision was to grant power to provide declaratory relief in areas where the subject matter of the issue or the controversy between the parties relates to an area of the Commission's jurisdiction. Although the Full Bench may not have power to uphold the appeal (Morrison v Joy Manufacturing) in these proceedings, nevertheless the question whether the Court Session has power, in a particular case, to decide whether a particular proceeding has been properly commenced is a matter within the Court Session's jurisdiction and there is thus power to grant declaratory relief to resolve the present controversy between the appellant and the respondent. 58 We are, however, mindful of the traditional reticence of superior courts to grant declaratory relief in criminal proceedings. Nevertheless, the particular circumstances of this case make it appropriate for declaratory relief be considered and, if relevant circumstances are found to exist, for declaratory relief be granted. The first circumstance is that the judgment of the Full Bench of this Court in Morrison v Joy Manufacturing clearly showed that there was an hiatus in the jurisdiction of the Court in its power to deal with appeals from interlocutory decisions. The second particular matter relevant to our consideration is that we have reached the conclusion that Haylen J erred in the conclusion reached that criminal liability for offences committed, or alleged to have been committed, by Advance Energy was assumed by Country Energy when the former body ceased to exist upon its absorption into the latter body. Thirdly, the circumstances of the present case are quite different to the usual case in which declaratory relief is sought in criminal proceedings and where the grant of the relief might interfere with the proper progress of a criminal trial or committal proceedings. 59 There is also a clear public interest in clarifying the legal rights of the respective parties concerning the prosecution commenced by the respondent and it would be contrary to the public interest to place the parties in the situation where the proceedings might continue before Haylen J in circumstances where there is no legal authority for those proceedings to continue. 60 Notwithstanding the general approach in such matters, there have been cases where superior courts have granted declaratory relief in criminal proceedings. One example is the judgment of the Victorian Court of Appeal in Director of Public Prosecutions v His Honour Judge G D Lewis and Anor [1997] 1 VR 391. In that case, Tadgell JA (with whom Ormiston and Charles JJA agreed) accepted that courts will be slow to grant declaratory relief which impinges directly on the course of proceedings in a criminal matter (the main authority referred to was the judgment of the High Court in Sankey v Whitlam (1978) 142 CLR 1 at 23 - 26) and, in that context, his Honour identified "[a] principal reason ... is that it is generally desirable in the public interest that criminal proceedings should be allowed to pursue their usual course, without punctuation by applications for interlocutory relief in relation to them". 61 His Honour however noted that Sankey v Whitlam was authority for the grant of declaratory relief in an appropriate case even though it was sought in respect of pending criminal proceedings, and there was other authority to like effect. His Honour discussed the approaches taken in earlier cases in this way: Various epithets have been used to label circumstances in which such a declaration might be appropriate: "most exceptional", "very exceptional", "special" and "unusual", and expressions similar in effect, are to be found in the decided cases: e.g. Cain v Glass (No. 2) (1985) 3 N.S.W.L.R. 230 at 235; Anderson v Attorney-General (N.S.W.) (1987) 10 N.S.W.L.R. 198. These expressions of themselves do not assist very much in the recognition of a given case as fit for a declaration. It can at least be said, however, that a declaration which is designed to regulate criminal proceedings is very much the exception and not the rule, and will ordinarily be refused unless there is special justification for making it. A case such as Craig [(1995) 184 CLR 163], in which an order for a stay had been made by reference essentially to the circumstances of the accused, and in the exercise of a wide discretion, could scarcely meet that criterion. I think the present case is very different. As against the undesirability of a superior court's undue intervention by way of declaration in a criminal proceeding, there is to be weighed the undesirability of recognising yet not heeding an inferior court's improper refusal to try an accused person upon a presentment that is duly before it: cf. Jago v District Court of New South Wales (1989) 168 C.L.R. 23 at 38-9, and 49-54, per Brennan J.; 76-8 per Gaudron J. It is one thing to decline to interfere by declaration when a trial judge has ordered a stay in the exercise of a discretion after an assessment by him of the surrounding facts. It would be another altogether to decline to act in the present case when the stay order depended not on matters of fact or discretion but entirely, or almost entirely, on an erroneous application of principles of law. In the present circumstances there is no avenue of appeal by the Crown against the judge's error; and the provisions of ss. 446 and 450A of the Crimes Act 1958 have no application. These matters might not by themselves be sufficient to justify an exercise of the jurisdiction to make a declaration, but there are other considerations as well. Offences of the kind charged and the circumstances alleged in counts 3 to 8 of the presentment have come before the courts in recent years with disturbing regularity. It is of course in the public interest that allegations of such offences be brought to trial if a presentment can be satisfactorily formulated. But the formulation of charges in respect of sexual abuse alleged to have occurred long ago to a child, whose memory as an adult is necessarily vague about dates, presents considerable difficulty as a matter of criminal pleading. It is nevertheless desirable, again in the public interest, that the difficulty be faced and worked out rather than that the courts should walk away from it. 62 We consider that the circumstances here are sufficiently parallel to those in the Victorian case that it would be appropriate to grant declaratory relief. Although the circumstances of the present matter are not on all fours with those in that case, we note, in addition to the considerations earlier identified, the appellant has no ready avenue of appeal if its present appeal is dismissed (the judgment in Morrison v Joy Manufacturing leading to that result), and the order granted by his Honour depended not on matters of fact or discretion but on an erroneous application of the law. The Victorian case also importantly emphasised the significant public interest element in granting the relief and we have earlier referred to the public interest in bringing proceedings under the Occupational Health and Safety Act to a halt if there is plainly no legal justification for their continuation. 63 We are therefore prepared to grant the declaration sought by the appellant. We should however deal with the costs of the proceedings before making the necessary orders. Costs

Country Energy v Malone

At a glance

Court

Decision date

Before

Source

Judgment (60 paragraphs)

Parties

Cases Cited (9)

Cited By (6)