Inspector Colin Fraser v Rocco Natoli

JUDGMENT OF THE COURT [2010] NSWIRComm 180 1 Proceedings were commenced against the defendant, Rocco Natoli, by way of three applications for order filed on 9 July 2008. The charges brought under s 8(2) by virtue of s 26(1) of the Occupational Health and Safety Act 2000 (2000 Act) concern three separate incidents which occurred at a construction site in Wollongong, in relation to which Apex Building Services Pty Limited (under external administration) (Apex) was principal contractor. Mr Natoli held the office of director of Apex at the time the three incidents occurred. Apex entered into a contract with Formcom Holdings Pty Limited (Formcom) for the supply of labour and materials for the provision of formwork and associated works. The contract expressly provided that Apex was to provide the external scaffolding and Formcom the internal scaffolding. Mr Natoli undertook the scheduling of work at the premises, as well as general management of the work undertaken at the site. 2 On 28 November 2008, pleas of guilty to the three charges were formally entered on behalf of Mr Natoli before Staff J. The matters were scheduled for sentence hearings before me on 29 March 2010. Shortly before that date the prosecution filed Notices of Motion seeking to amend the charges in light of the High Court judgment in Kirk v Industrial Court of New South Wales [2010] HCA 1; (2010) 239 CLR 531. These applications were scheduled to be heard before the sentence hearings, however, before that occurred, Mr Natoli, who was represented by his wife, Ms Joanna Natoli, signalled an intention to make an application to withdraw his pleas of guilty based on the judgment in Kirk. These applications were brought by way of Notices of Motion. This judgment deals with Mr Natoli's Notices of Motion to withdraw his pleas of guilty. 3 The Notices of Motion are in identical terms. They each seek the leave of the Court to withdraw the pleas of guilty on the following ground and reasons: 1) Following the recent decision of Kirk v Industrial Relations Commission of New South Wales, Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) [2010] HCA 1 the applicant believes the evidence he can present that he was not in a position to influence Apex's conduct in relation to any acts or omissions the respondent intends to allege constitute the offences; is now relevant. 2) The factual basis for this notice of motion is set out in the affidavit of Rocco Natoli sworn 9 April 2010. 4 When the applications came on for hearing a further ground emerged during cross-examination of the defendant. This further ground raised the defendant's financial circumstances prevailing at the time he made the decision to enter pleas of guilty. According to the defendant his financial circumstances constituted a "major determining factor" which influenced his decision to enter pleas of guilty to the charges. The Kirk point 5 The defendant's ground set out in the Notices of Motion was the subject of further clarification in both written and oral submissions made on the defendant's behalf by Ms Natoli. It became clear from those submissions that what was being contended in seeking to draw an analogy with the principles espoused in Kirk was that the present charges fail to identify the alleged failures of the defendant to exercise due diligence under s 26(1)(b) of the 2000 Act. These alleged failures, it was asserted, should have been identified in the charges "at least in general terms". 6 No such proposition, however, is capable of being distilled from Kirk. The acts or omissions (the defendant's alleged "failures") with which the High Court was concerned were the acts or omissions of the corporate defendant. In Kirk it was held that a charge brought under s 15(1) of the Occupational Health and Safety Act 1983 (1983 Act) (now s 8(1) of the 2000 Act) or s 16(1) of the 1983 Act (now s 8(2) of the 2000 Act) had to plead the acts or omissions of a defendant that created the risk to safety: Kirk at [14] and [19]; see also Inspector Hamilton v John Holland Pty Ltd [2010] NSWIRComm 72; (2010) 194 IR 189 at [59]. Kirk is not authority for a proposition that the acts or omissions of directors, or persons concerned in the management of a corporation, charged under s 8(2) by virtue of s 26(1) of the 2000 Act, are required to be pleaded in the charge. 7 This latter issue was the subject of consideration in Morrison v Chevalley [2010] NSWIRComm 116. In that judgment, two directors had been charged separately with an offence under s 8(1) by operation of s 26(1) of the 2000 Act. It was submitted on behalf of each defendant that it was incumbent upon the prosecution to plead in the charges the relevant acts or omissions of each director so that each director could understand the case put against him and be able to rely on one of the defences under s 26. 8 The Full Court considered whether it was necessary to plead the relevant acts or omissions of the directors in order that they may understand how to frame any defence under s 26(1). In concluding that it was not necessary, the Full Court said (at [87]): It must surely follow from the proposition that no proof is required of the directors' 'acts or omissions' that their 'acts or omissions' are not essential legal or factual elements of the offence. There is no indication in s 26 that a legal element to be proved by the prosecutor in respect of a director or manager is an act or omission of that director or manager; the onus is on the director or manager. Further, unlike the charge against the corporation, the prosecutor is not required to prove an essential factual ingredient of the 'time, place and manner' ( Johnson v Miller [1937] HCA 77; (1937) 59 CLR 467 at 486) in which the directors in this case failed to prevent the acts or omissions of the corporation; the onus is reversed and it is for the directors to prove that they were not in a position to influence the acts or omissions of the corporation or, being in a position, exercised all due diligence to prevent the corporation, by its acts or omissions, causing a risk to safety. 9 The point was further emphasised in the judgment: [95] In our opinion, there is no obligation upon the prosecutor to plead the 'acts or omissions' of the two directors. It is not an essential legal element of an offence charged under s 8(1) by operation of s 26 that the prosecutor must prove either that the person was in a position to control or influence the corporation with respect to the act or omission, or that the person did not take steps to ensure the company did not do the act or omission in question and was thereby not duly diligent. Nor are such 'acts or omissions' essential factual ingredients to be proved by the prosecutor. [96] Moreover, it is not necessary for the prosecutor to identify in an Application for Order how the directors failed to prevent the corporation, by its acts or omissions, from causing a risk to health and safety in order that the directors may properly prepare a defence. It makes little sense to require the prosecutor to have the knowledge to assert such matters when the rationale for placing the onus on the defendants is that they are best placed to know whether they were in a position to influence the conduct of the corporation or being in such a position exercised all due diligence. [97] This is not to say that some aspect of a defendant's 'acts or omissions' may not be the subject of an application for particulars if fairness demands it. But that is a matter for the trial judge in the conduct of the trial and having regard, in particular, to the fact that the onus is reversed. 10 In Morrison v Chevalley (at [100]), the Full Court noted the defendants' concession that Kirk did not consider whether the prosecutor was required to plead and particularise the charge to enable a director to avail himself of a defence under s 26. Morrison v Chevalley considered (at [106]) there was nothing in Kirk that would require the Full Court to adopt the view, "that in charging a director or manager under s 26 the prosecutor is required to separately plead and particularise the charge so as to identify the 'acts or omissions' of such persons, as distinct from the corporation". 11 These matters effectively dispose of the defendant's ground set out in the Notices of Motion. In written submissions, the defendant stated that he was aware of the nature of the charges against Apex and was aware of Apex's alleged omissions. Notwithstanding these concessions, and the absence of reliance by the defendant on whether the charges plead the acts or omissions of Apex, I intend to consider whether the charges against the defendant do in fact plead the relevant acts or omissions of Apex in accordance with the requirements identified in Kirk. 12 The majority in Kirk held (at [15]) that the necessity for a charge to identify the act or omission said to constitute a contravention of s 15 or s 16, "is even more apparent when regard is had to the defences which were available to employers in proceedings for offences against the provisions ...". The majority in Kirk referred, at various parts of the judgment, to the requirement to identify or specify in the charge, the "measure(s) which ... should have been or should be taken" to prevent the risk occurring. The term "measure" (which should have been taken) is used interchangeably in the judgment with the term "relevant act or omission" which gives rise to the risk (see Kirk at [14] and [17], for example). Both concepts are directed towards the same goal, namely, identifying the manner in which, or how, the defendant is said to have failed to ensure the safety of persons, and as a result, exposed them to risks to their safety. By way of a simple illustration, an alleged failure in a charge to guard a machine identifies the alleged omission to guard the machine (which exposes persons using the machine to risk of injury) and equally identifies the measure which should have been taken (to obviate the risk), namely, to guard the machine. Adequate identification in the charge of the relevant act or omission or the measure, according to the majority in Kirk (at [15] to [19]) is necessary so that a defendant charged under either s 8(1) or s 8(2), for example, can raise a defence under s 28 of the 2000 Act. The charges 13 With these observations in mind, I turn to the charges brought against the defendant in these proceedings. It is only necessary, in my view, to consider one of the charges since the three charges are particularised in substantially similar terms and allege substantially the same failures or omissions. Any differences appear to be of minor significance, at least for the purpose of the present exercise. 14 Charge 1084 of 2008 alleges that Apex failed to ensure that Steve Saad was not exposed to risks to his health or safety. On 19 July 2006, Mr Saad, who was not wearing any fall protection, fell over seven metres through a penetration in temporary catch scaffolding and landed on a concrete floor at the construction site. 15 I propose to examine separately each of the particulars which allege a failure to ensure the safety of non-employees on the part of Apex. (b) The corporation permitted non employees to work on the construction of a formwork deck less than 2 metres from the leading edge at a height of approximately 7.3 metres without any adequate fall protection in place 16 Particular (b) alleges that what was not done (the omission) and, by implication, what should have been done (the measure not taken) was that non-employees not be permitted to work at a height of about 7.3 metres, less than 2 metres from a leading edge, without adequate fall protection. (c) The corporation failed to ensure a safe system of work was in place in relation to the process of the construction of a formwork deck requiring non employees to work at a height of approximately 7.3 metres at the premises 17 Particular (c) alleges that what was not done but should have been done was the provision of a safe system for non-employees constructing formwork decks at a height of about 7.3 metres. Particular (c) does not contain the same level of detail as particular (b). The provision of adequate fall protection, for example, is not specified although it may be concluded that it is an obvious measure which might be contemplated (in the circumstances) for the protection of the workers. Particulars (b), (d) and (h) on the other hand do specify the absence of fall protection for non-employees working at heights at the site as the relevant omission. Particulars (b), (c), (d) and (h) share some common features, namely allegations that non-employees were working at heights constructing the formwork decks. In my view, when particular (c) is considered in combination with those other particulars with which it shares common features it is also capable of being understood by reference to the absence of fall protection: see Doja v R [2009] NSWCCA 303 at [32] [33] per Spigelman CJ; (2009) 198 A Crim R 349. 18 Even if it may be concluded that particular (c) fails to specify in sufficient detail the requisite omission or measure relied upon, this would not justify, in my view, leave being granted to withdraw the pleas of guilty. The prosecutor is only required to prove one omission in order to secure a conviction: Environment Protection Authority v Sydney Water Corporation Limited (1997) 98 A Crim R 481 at 485. (d) The corporation failed to ensure that the system of work used by non employees for the construction of formwork decks was safe and without risks, as the system used involved non employees working less than 2 metres from the leading edge without any adequate fall protection in place 19 Particular (d) alleges that what was not done and, by implication, what should have been done was the provision of a safe system of adequate fall protection for non-employees constructing formwork decks less than 2 metres from the leading edge. (e) The corporation failed to ensure that a temporary catch platform was provided in front of the leading edge of the formwork deck that was not more than 1.8 metres below the formwork deck 20 Particular (e) alleges that what was done and, by implication, what should have been done was to provide a temporary catch platform that was not more than 1.8 metres below the formwork deck. (f) The corporation failed to ensure that any temporary catch platform provided in front of the leading edge of the formwork deck was complete and free from penetrations 21 Particular (f) alleges that what was not done and, by implication, what should have been done was to provide a temporary catch platform that was complete and free of penetrations. (g) The corporation failed to ensure that its subcontractors provided an adequate Safe Work Method Statement dealing with the requirement generally to ensure temporary catch platforms and handrails were erected where workers were required to work at heights of more than 1.8 metres, and in particular that such temporary catch platforms be erected not more than 1.8 metres below the formwork deck and be free of penetrations 22 Particular (g) alleges that what was not done and, by implication what should have been done was to ensure subcontractors provided an adequate Safe Work Method Statement which addressed the erection of penetration-free temporary catch platforms and handrails for workers working at height. (h) The corporation failed to provide adequate information, instruction and supervision to non employees in relation to the process of the construction of a formwork deck requiring work at a height of approximately 7.3 metres at the premises, and in particular in relation to ensuring adequate fall protection where non employees were required to work at heights greater than 1.8 metres and less than 2 metres from a leading edge 23 Particular (h) alleges that what was not done and, by implication, what should have been done, was the provision of adequate information etc with regard to adequate fall protection for non-employees working at the heights and locations nominated in the particular.

24 As the analysis reveals, the charge, with the possible exception of particular (c), contains sufficient detail with regard to the alleged omissions of Apex to enable it to raise, or propound, a defence under s 28 of the 2000 Act. Other grounds including the defendant's financial circumstances 25 During oral hearing the defendant also relied on a lack of financial resources to defend himself in relation to the charges as an available ground justifying the grant of leave to withdraw his pleas of guilty. 26 No authorities were relied upon by either party in support of the ground. The evidence on the issue is found in the defendant's affidavit, as well as in his oral evidence. The issue was not the subject of written submissions and was only raised in oral submissions for the first time at the end of the proceedings. 27 Before considering the evidence it is necessary to briefly visit some of the principles relevant to the Court's discretion in deciding whether to grant leave to a defendant to withdraw a plea of guilty. In this regard, the prosecution in written submissions helpfully set out some of the relevant principles, to which I will make brief reference. 28 In WorkCover Authority of New South Wales (Inspector Page) v RGM Building Services Pty Limited [2000] NSWIRComm 27; (2000) 97 IR 51, Wright J, President (at [6]), quoted with approval, a passage from R v Marchando [2000] NSWCCA 8 in which Simpson J discussed the principles: The relevant legal principles are neither complicated nor controversial. The court has a discretion to permit a change of plea at any time prior to sentence: R v Griffiths (1977) l37 CLR 293 at 335; Chow v DPP (1992) 28 NSWLR 593 at 599. Leave, while a discretionary matter, should readily be granted where the plea has been entered pursuant to some material mistake, or in circumstances where its integrity is otherwise questionable; R v Sagiv (1986) 22 A Crim R 73. Circumstances that warrant the exercise of discretion in favour of permitting the change of plea include lack of appreciation on the part of the defendant of the nature of the charge; absence of evidence sufficient to convict the defendant; fraud or threats or other impropriety inducing the plea: R v Boag (1994) 73 A Crim R 35; or, more generally, a miscarriage of justice for other reasons: R v Chiron [1980] 1 NSWLR 218 at 235. The last mentioned case establishes that a miscarriage of justice justifying the grant of leave to withdraw a plea of guilty may be established, inter alia, where the decision to enter the plea resulted from an erroneous ruling on the admissibility of evidence. The central question in all cases is whether it has been shown - the onus lying on the applicant - that the plea was not really attributable to a consciousness of guilt: R v Davies (1993) 19 MVR 481. 29 In Woods v The Queen [2008] NSWCCA 83; (2008) 184 A Crim R 108, the Court of Criminal Appeal emphasised that the fundamental principle behind allowing the withdrawal of a plea is the ensuring that there is no miscarriage of justice. No miscarriage of justice will occur if the plea of guilty was entered in the exercise of a free choice: Woods at [36]. In the present circumstances the defendant confirmed in written submissions that he was aware of the nature of the charge against Apex, in particular its alleged omission. Further, the defendant expressly disavowed in written submissions that he had received imprudent or inappropriate advice from his legal representatives at the time he made his decision to enter pleas of guilty. 30 In his affidavit sworn on 9 April 2010 however, the defendant appeared to contradict his written submissions on the issue when he said: 13. After I was charged I was given legal advice by solicitors Yates Beaggi Lawyers that prosecutions brought by WorkCover against Directors of a Company were indefensible. I was told that is just the way the system worked, so there was no point in trying to defend any prosecution. 14. I was advised that even though specific acts or omissions by myself were not set out in the applications by WorkCover, I had no choice but to plead guilty. 31 The evidence before the Court on the applications reveal that the defendant, at the time he entered the pleas of guilty, had: a. been served with the pleadings including the Applications for Order and the Affidavits in Support of the Applications for Order; b. been provided with the prosecution Brief of Evidence; c. had retained solicitors to act on his behalf; d. had obtained legal advice from his solicitors in relation to the charges; e. had obtained legal advice from experienced Counsel who regularly acts in this jurisdiction. 32 In cross-examination, the defendant confirmed that he forwarded the documentation sent to him by the prosecution to his solicitor, Mr Brenton Yates of Yates Beaggi Lawyers. He also said he discussed the documentation with Mr Yates and that Mr Yates briefed counsel, Mr Anthony Britt, to provide legal advice to him as to his prospects of success in defending the charges. He agreed that he attended Mr Britt's chambers with Mr Yates and Ms Natoli for the purpose of a conference during which Mr Britt explained to him how the 2000 Act operated. He also conceded that Mr Britt advised him that he had a choice to plead not guilty and defend the charges. He said his lawyers did not put any pressure on him to plead guilty and that he understood the effect of pleading guilty to the charges. He was shown an extract from his affidavit sworn on 1 June 2009 in which he said he acknowledged that he pleaded guilty to the charges and that he had failed in his obligations in respect of the three incidents the subject of the three charges. He was also shown a passage from the same affidavit where he stated that he acknowledged his responsibility in connection with, "the accident and the management of the site generally". He also said in the same passage that he was "regretful and apologetic for the injuries suffered by Mr Saad and the impact such injuries have had on him and his family". He adhered to all these statements in his cross-examination, adding that he should have taken more control and responsibility for the people employed to take care of these matters. He also conceded that he had given instructions after the conference to Mr Yates to enter pleas of guilty on his behalf. In re-examination, the defendant confirmed that the charges had been explained properly to him during the conference and that he had been advised that he was being charged as a director of Apex because Apex had done "something wrong". He also explained that he was not claiming that he had been given "inappropriate advice" prior to his decision to enter pleas of guilty. He also clarified that in bringing the present applications he was not proposing to rely on any new material or evidence in support of a defence under s 26(1) of the 2000 Act. 33 He repeated, however, in his oral evidence, that he had been advised during the conference with his legal representatives that the charges were "indefensible" (because of economic factors) and that he should, "just move on", and "there is no point in trying to defend any prosecution". 34 Mr Yates was called by the prosecution to give evidence on these matters. He presented a somewhat different account of what was discussed during the conference. He said that neither he nor Mr Britt had advised the defendant that the charges were "indefensible". Rather, he said that Mr Britt's advice was that a defence would be difficult to run in that the defendant's prospects of success were not great. He said it was not put to the defendant that he had no defence to run or that he was unable to run a defence. He denied that he, or Mr Britt, had advised the defendant in the terms deposed to by the defendant in his affidavit of 9 April 2010, namely, that the prosecutions were, "indefensible ... that is just the way the system works, so there is no point in trying to defend any prosecution". According to Mr Yates the defendant was not told he had no choice but to plead guilty and it was always made clear to him that he could run a defence if he wanted to. 35 When this evidence of both the defendant and Mr Yates is considered as a whole it is open to conclude that the defendant understood the nature of the charges and entered his pleas of guilty in the exercise of a free choice. I did not understand the defendant to seriously contend otherwise in closing submissions. Rather, he sought to develop his lack of financial resources as his primary motivation for entering the pleas of guilty. No miscarriage of justice therefore arises if leave is not granted to the defendant to withdraw his pleas of guilty because the account given by him of what transpired during the conference with his legal representatives is not accepted in full. What clearly emerges in regard to the matters discussed during the conference, taking both versions into account, is that the defendant had the charges properly explained to him, as well as the defences available to him, which facilitated his understanding of the nature of the charges. These matters illustrate that his decision to plead guilty was made voluntarily and without any undue pressure being placed upon him. 36 The issue as to the defendant's financial capacity arose in the context of his account given in oral evidence of what had occurred during the conference. According to the defendant it was a significant factor which influenced him to enter the pleas of guilty. The matter was touched upon in the defendant's affidavit of 9 April 2010 in which he said: My family has faced financial devastation since the liquidation of Apex. We have received very little income in the last 12 months and have spent all of our $60,000 in saving, much of it on legal fees. I have two very young children to support. 37 In oral evidence, Mr Yates was asked if he recalled any discussion about the potential costs the defendant might incur if he entered pleas of guilty. Mr Yates recalled the following matters: A. Look, only that the cost of a defence was obviously going to be something, well, that they would spend a lot of money running a defence, and that in the scheme of things, in the scheme of what the penalty might be if they were to be unsuccessful in the defence, in the scheme of how much they would spend by going down a path of pleading guilty and putting on some evidence as to mitigation, all of those things were discussed. At this point in time the Natolis and their related entities were under some pressure on the financial front and there was a number of other matters on the go, so, the cost of proceedings, that cost of an adverse outcome was at the forefront of all of our minds. 38 Mr Yates also said, "I've no doubt that Mr Natoli would have run a defence had he had the financial resources to do so". 39 In cross-examination, the defendant alluded to his "economic circumstances" as the reason which had prompted him to plead guilty. In closing submissions, Ms Natoli, on behalf of the defendant, described his financial position as a "major determining factor" in the decision to plead guilty. Ms Natoli said that the present applications were made in order to afford the defendant the opportunity to keep his safety record intact and, because, "we have lost everything, we have nothing to lose". In similar vein, the defendant, in re-examination, said that the basis of his applications to withdraw his pleas of guilty was that, "in light of the Kirk matter ... I felt I can defend myself on a not-guilty basis". 40 It is somewhat difficult to reconcile these expressions of intention to defend the charges while at the same time lacking the financial resources to engage legal representation with the defendant's evidence that the same lack of financial resources prevented him from defending the charges at an earlier stage. These matters suggest that the defendant simply changed his mind in deciding to defend the charges without legal representation based solely on a wrong perception of what was said in Kirk. This would not constitute a proper basis for granting leave to the defendant to withdraw his pleas. No miscarriage of justice arises therefore from a refusal to grant leave because the defendant lacked financial resources at the time the pleas of guilty were entered. According to the defendant the state of his finances remains unchanged. The option to defend the charges without legal representation was clearly open to the defendant in the exercise of a free choice, with the benefit of legal advice, and with a full appreciation of the nature of the charges, at the time he decided to enter pleas of guilty to the three charges. 41 Leave to withdraw the pleas of guilty in respect of the three charges brought against the defendant therefore is refused. The matters will be set down for directions hearings at 9.30am on Thursday, 16 December 2010. Costs will be reserved. 42 In evidence and in submissions the defendant appeared to place a great deal of importance on what he perceived to be the conduct of George Karam, also a director of Apex, in relation to the offences the subject of the three charges. It was not made entirely clear during the hearing of the present applications what relevance Mr Karam's conduct had on the defendant's decision to apply to withdraw his pleas of guilty. In written submissions, the defendant asserted, in purported reliance on Kirk, "... that general fairness would require that the factual basis for the decision reached by the Prosecutor that s 26 (although applying to Mr Karam) did not apply to the defendant should have been disclosed to the defendant. These matters were not, and never have been, particularised in the charges". 43 The prosecutor's decision to proceed against the defendant but not against Mr Karam, although not a matter of any apparent relevance to the present applications, may nevertheless be of relevance to the sentence proceedings, in terms of any issue raised, for example, of the contributions of other persons or entities not prosecuted in relation to the subject matter of the offences with which the defendant is charged. Orders 44 The Court makes the following orders:

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