Inspector Green v The Crown in Right of the State of New South Wales

CATCHWORDS: Costs - Occupational health and safety - Reference of questions of law - Power of Full Bench to make costs order - Consideration of approach to be adopted in awarding costs - Costs order made.

Crimes (Sentencing Procedure) Act 1999 s 10 Criminal Appeal Act 1912 s 5AE LEGISLATION CITED: Criminal Procedure Act 1986 s 257B Industrial Relations Act 1996 s 168 s 181 s 187 s 193 s 196 Occupational Health and Safety Act 2000 s 10

Environmental Protection Authority of NSW v Goulburn Wool Scour Pty Ltd [2004] NSWCCA 439 Inspector Wolf v Rockdale Beef Pty Limited [2005] NSWIRComm 163 Inspector Wolf v Rockdale Beef Pty Ltd [2006] NSWIRComm 280 CASES CITED: Inspector Wolf v Rockdale Beef Pty Ltd (No 2) [2006] NSWIRComm 365 Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622 WorkCover Authority of New South Wales (Inspector Dawson) v Plastachem Pty Ltd and Ors (2001) 110 IR 351 WorkCover Authority of New South Wales v Lucon (Australia) Pty Limited (2003) 124 IR 459

PROSECUTOR: Ms P E McDonald of counsel Phillips Fox, Solicitors LEGAL REPRESENTATIVES: (Ms P Burgess/Ms J Healy)

DEFENDANT: Ms R Parmegiani Sparke Helmore, Lawyers

CORAM: WRIGHT J, President WALTON J, Vice-President BOLAND J

INSPECTOR RITCHIE GREEN v THE CROWN IN RIGHT OF THE STATE OF NEW SOUTH WALES (DEPARTMENT OF COMMERCE FORMERLY DEPARTMENT OF PUBLIC WORKS AND SERVICES)

Prosecution under section 10(1) of the Occupational Health and Safety Act 2000

INSPECTOR RITCHIE GREEN v THE CROWN IN RIGHT OF THE STATE OF NEW SOUTH WALES (DEPARTMENT OF COMMERCE FORMERLY DEPARTMENT OF PUBLIC WORKS AND SERVICES)

Prosecution under section 10(2) of the Occupational Health and Safety Act 2000

JUDGMENT OF THE COURT [2006] NSWIRComm 368 1 On 2 December 2004 Inspector Ritchie Green of the WorkCover Authority of New South Wales commenced proceedings against the Crown in Right of the State of New South Wales (Department of Commerce formerly the Department of Public Works and Services) under s 10(1) and s 10(2) of the Occupational Health and Safety Act 2000 in respect of alleged breaches of that statute which were said to have occurred on 4 December 2002.

2 The proceedings first came on for directions before the Court (Haylen J) on 14 March 2005 and, in the absence of an appearance for the defendant, were adjourned until 30 May 2005 for further directions. 3 On 20 May 2005 her Honour Justice Schmidt delivered judgment in Inspector Wolf v Rockdale Beef Pty Limited [2005] NSWIRComm 163 and the defendant consequently filed a notice of motion seeking these proceedings be dismissed on the following grounds: 1. The contravention alleged against the Defendant does not inform the Defendant of the legal nature of the offence with which the Defendant is charged or the particular act, matter or thing alleged as the foundation of the charge;

2. The contravention alleged against the Defendant does not allege all of the legal elements of the offence provided for in sections 10(3) and 10(4) of the Occupational Health & Safety Act 2000;

3. The proceedings against the Defendant were not commenced within the time prescribed by section 107 of the Act. 4 Subsequent proceedings occurred before Haylen J on 30 May, 15 July, 15 August and 19 August 2005. There had been an intermediate directions hearing before the President of the Court on 26 July 2005 and, after the reference to the Full Bench pursuant to s 196 of the Industrial Relations Act 1996 and s 5AE of the Criminal Appeal Act 1912 of four questions by Haylen J, the reference came before the President for further directions on 25 and 31 August 2005. At those directions hearings the parties indicated their consent that the proceedings before the Full Bench be adjourned to await the hearing of matters referred by Schmidt J in the Rockdale Beef proceedings and the parties were directed to have the present proceedings relisted within seven days of judgment being delivered in that matter. 5 After the judgment of the Full Bench in Rockdale Beef (Inspector Wolf v Rockdale Beef Pty Ltd [2006] NSWIRComm 280) was handed down the present reference came on for further directions on 18 September 2006 at which time the defendant sought an adjournment because it had recently instructed new solicitors. 6 The references have now been terminated and the proceedings returned to Haylen J to be heard on their merits in the light of the agreement of the parties that that should occur. The question that the Full Bench now has to decide is the issue of costs of the reference and the parties have agreed that should occur "on the papers". Contentions of the parties

7 The prosecutor submitted that the Court should order that the defendant pay the costs of the reference to the Full Bench, such costs to be as agreed or assessed. 8 In seeking that order, the prosecutor relied on the chronology of the proceedings and how the proceedings were commenced against the defendant for an offence under s 10(1) of the Occupational Health and Safety Act and for an offence under s 10(2) of that statute in respect of an incident alleged to have occurred on 4 December 2002 at the Waterview Seelands Eatonsville Water Supply site at South Grafton. 9 In Inspector Wolf v Rockdale Beef, Schmidt J held that as the charge did not plead relevant matters as set out in s 10(3) and s 10(4) of the Act and failed to specify the essential legal elements of the offence, the charge was invalid. 10 On 27 May 2005 the defendant filed notices of motion in the proceedings seeking the dismissal of the orders issued against the defendant on the three grounds earlier referred to. 11 At the second directions hearing before Haylen J on 30 May 2005 the defendant said that the Rockdale Beef judgment of Schmidt J was apposite to the offences it was facing and that the judgment prompted the filing of the notices of motion. 12 At a directions hearing before Haylen J on 15 July 2005, the prosecutor submitted that the points of law raised by the notices of motion would be appropriate to be referred to a Full Bench of the Court. The defendant sought time to seek instructions about the proposed reference but said that it was in fundamental agreement that the matter should be referred to the Full Bench if the Rockdale Beef reference was not proceeding. 13 Subsequently the prosecutor prepared the four questions that were referred to the Full Bench. The defendant, at a directions hearing before Haylen J submitted that questions 1 and 4 were subsidiary to questions 2 and 3 but that issue was academic since the questions would be effectively answered in the Rockdale Beef reference proceedings. 14 During a directions hearing before the President on 31 August 2005 the parties agreed that the reference in these proceedings would be stood over until the determination of the reference/appeal in Rockdale Beef. His Honour ordered that the reference be stood over and directed that both parties apply to have the matters relisted within seven days following judgment in the Rockdale Beef reference/appeal. 15 The prosecutor submitted that the Full Bench of the Court has power to order costs of a reference under s 196 of the Industrial Relations Act. For example, in WorkCover Authority of New South Wales v Lucon (Australia) Pty Limited (2003) 124 IR 459 at 462 held: The legal basis for such orders is that costs in relation to appeals and references under s 196 are not dealt with under the Criminal Appeal Act but, because of the terms of s 196(4), are dealt with in accordance with the normal costs provisions applicable to this Court under, for example, s 181 of the Industrial Relations Act . 16 As the power to award costs is based on the general costs provisions of the Industrial Relations Act, the general rule that costs follow the event should operate. The prosecutor was successful here as the Full Bench in the Rockdale Beef reference/appeal judgment found in favour of the prosecutor in relation to the essential elements of the offence under s 10 of the Act. It has been acknowledged by the defendant that the Full Bench judgment in Rockdale Beef disposes of the questions referred. 17 The grounds relied on by the prosecutor for the award of costs he seeks, include: (i) the genesis of the questions referred was the defendant's notice of motion;

(ii) it was appropriate for the questions to be referred. The questions raised important issues concerning the issue of the essential elements of an offence under s 10 of the Act which should be determined by a Full Bench;

(iii) the initial decision to refer the questions was appropriate in circumstances in which it was uncertain how the more complex Rockdale Beef matter was to progress;

(iv) it was appropriate for the parties to postpone the determination of the reference until the judgment in Rockdale Beef was given. As acknowledged by the parties and depending on the answers given, the Rockdale proceedings might answer the questions referred. However there was some uncertainty with the Rockdale Beef reference/appeal because of procedural issues. The Full Bench in Rockdale declined to determine the s10 issue as the Bench found the reference was not valid and it was not certain whether leave to appeal out of time would be granted to the prosecutor; (v) the procedure followed was agreed to by the defendant. 18 In its submissions, the defendant agreed that the Full Bench decision in Inspector Wolf v Rockdale Beef Pty Limited disposes of the issues raised in the reference and by the defendant's notice of motion. It, however, opposes any claim for costs by WorkCover arising out of the reference on two bases: first, there is no power to award costs; alternatively, should the court have power to award costs the power should in the circumstances be exercised in favour of the defendant. 19 The defendant relied on the consideration that her Honour in Rockdale Beef held that the terms of the duty imposed on controllers of premises or plant, by s 10(1) and s 10(2), are not those which appear in these subsections alone but can only be ascertained from all the provisions of s 10 in its entirety. In particular, her Honour at [41] held: In my view it follows that it cannot be concluded that what appears in ss10(3) and (4) is to be understood as exceptions or qualifications to general duties imposed by ss10(1) and 10(2). They are, rather, essential aspects of the duties themselves, which fall for a prosecutor to demonstrate. Were it to be concluded otherwise curious circumstances would follow. 20 Further, at [50], her Honour held: It follows that a charge brought in respect of an alleged breach of section 10 must specify what duty the defendant is alleged to have breached. The prosecution must prove all legal elements of the offence so specified, including those elements which flow from the provisions of ss10(3) or (4). 21 In the concluding sentence of her Honour's judgment on this aspect of the matter, her Honour observed that "[t]he prosecutor accepted, correctly as I have noted, that a failure to specify such legal element in the charge is not curable". 22 The defendant submitted that, based on the determination of Schmidt J in the Rockdale Beef matter, an examination of the charges brought against the Department disclosed the following deficiencies: (a) The charges did not allege that the plant/premises were used by people other than the employees of the Department (section 10(3)(a)).

(b) The charges did not allege that the plant/premises were not used exclusively as or in a private dwelling (section 10(3)(b)).

(c) The charges did not allege that the plant/premises were controlled by the Department in the course of a trade, business or other undertaking (section 10(3)(d)).

(d) The charges did not allege that the Department had control over the plant/premises of a limited kind (section 10(4)(a)).

(e) The charges did not allege that the Department had an obligation relating to the plant/premises arising from the terms of a contract (section 10(4)(b)). 23 The defendant then recited that, having regard to the above matters, it filed a notice of motion which was listed before Haylen J and that, after the questions of law in the Rockdale Beef matter were referred to the Full Bench on 3 June 2005, the prosecution submitted to Haylen J on 15 July that the issues raised in the defendant's notice of motion should be referred to the Full Bench for determination as questions of law pursuant to s 5AE of the Criminal Appeal Act; further, that on 25 August 2005 when the matter next came before the President the parties agreed that the Rockdale Beef reference dealt with inter alia the same issues raised in the present reference and consequently the reference should be adjourned until the Full Bench had dealt with the reference in the Rockdale Beef matter.

24 The defendant argued that s 5AE of the Criminal Appeal Act is designed to facilitate the giving of advice by a court to a first instance judge to facilitate the proper resolution of issues in the proceedings: Environmental Protection Authority of NSW v Goulburn Wool Scour Pty Ltd [2004] NSWCCA 439 and the questions of law contemplated by that provision cannot arise in the absence of substantive proceedings. Accordingly, so it is submitted, any such questions of law referred to the higher court form part of the "proceedings" for the "offence". Proceedings for a breach of the Occupational Health and Safety Act are criminal proceedings and thus the procedure to be adopted in relation to such proceedings in the Industrial Court is provided by s 168 of the Industrial Relations Act which relevantly provides, firstly, that Part 5 of Chapter 4 of the Criminal Procedure Act 1986 applies to such proceedings and secondly, that the provisions thus applied by s 168 "prevail over any other provisions of this Part for the purposes of proceedings for an offence". 25 The defendant observed that s 168 is to be found in Part 5 of Chapter 4 of the Industrial Relations Act, which Part also includes s 181 of the Industrial Relations Act which deals with costs. The defendant thus submitted that s 181 is excluded from operating in criminal proceedings by virtue of s 168(4) and thus the source of the power to award costs is different in the case of criminal proceedings for an offence: WorkCover Authority of New South Wales (Inspector Dawson) v Plastachem Pty Ltd and Ors (2001) 110 IR 351. 26 It was further submitted that the relevant Part of the Criminal Procedure Act applied to proceedings by s 168 of the Industrial Relations Act includes s 257B of the Criminal Procedure Act which (relevantly) provides that costs may only be awarded to a prosecutor if and when the court convicts a defendant of an offence or makes an order under s 10 of the Crimes (Sentencing Procedure) Act 1999. The disposition of the issues raised by the reference proceedings by the Full Bench will not constitute a conviction nor an order under s 10 of the Crimes (Sentencing Procedure) Act and accordingly the Court has no power to make an order with reference to costs. 27 We do not accept the defendant's submissions as to this jurisdictional question. What it essentially overlooks is that s 196 of the Industrial Relations Act constitutes a specific statutory procedure dealing with both appeals and references to the Full Bench of the Industrial Court and also provides that the scheme thus established applies and the other provisions of Part 7 of Chapter 4 of the Industrial Relations Act do not apply in respect of criminal proceedings taken before a judge of the Industrial Court. Clearly, what the legislature intended was that s 196 was to apply to appeals and references to the Full Bench in criminal matters instead of the provisions which might otherwise apply; for example, s 187 in the case of appeals and s 193 in the case of references. The effect of s 196 is to incorporate within the statutory regime so established the relevant parts of the Criminal Appeal Act in lieu of provisions such as s 187 and s 193. 28 There are thus a number of dichotomies or distinctions created by s 196. One is between the "usual" appeal and reference proceedings provided by the Industrial Relations Act and those particular to criminal proceedings before the Industrial Court. The second is the dichotomy between criminal proceedings at first instance in the Industrial Court (which are governed by s 168) and appeals and references which are governed by s 196. 29 The identification of the latter dichotomy shows the fallacy in one of the important premises of the defendant's jurisdictional argument. It is not correct to say that reference proceedings are governed by s 168 of the Industrial Relations Act and the provisions incorporated by that section from the Criminal Procedure Act. 30 An examination of s 196 shows that although it operates in respect of the proceedings to which it applies to the exclusion of certain provisions of the Industrial Relations Act (such as s 187 and s 193), the provisions of the Industrial Relations Act, the operation of which is affected, do not include those such as s 181 which relates to costs. This conclusion is obvious when regard is had to the fact that the costs provision in s 181 is not affected by s 196(1) which makes clear that s 196 only operates to exclude the application of provisions within that Part of the Act which commences with s 187. This conclusion also follows from s 196(4) which makes clear that the incorporation into the statutory scheme relating to appeals and references in criminal matters of the Criminal Appeal Act does not apply to any provision of the Criminal Appeal Act relating to costs. There is clearly thus no basis in either the terms or the manifest intention of s 196 to exclude the provisions of s 181 in respect to matters such as appeals and references in criminal matters in terms of s 196(1). 31 It is unnecessary to set out the terms of s 181. Rather we note what the Full Bench in Inspector Wolf v Rockdale Beef Pty Ltd (No 2) [2006] NSWIRComm 365 at [16] recently said as to that section: [Section] 181 of the Industrial Relations Act provides a wide discretion to award costs, which must of course be exercised judicially. Although prima facie costs should follow the event, nevertheless it is appropriate for the Full Bench, in deciding the issue of costs in reference proceedings, to have regard to all circumstances which might be reasonably relevant to the exercise of the discretion.

We therefore conclude that the Full Bench has power to make the costs order for which the prosecutor contends. Defendant's alternative submission

32 The defendant's alternative submission was that, should the Court have the power to award costs, then this power should be exercised in favour of the defendant rather than in favour of the prosecutor. 33 In making this submission the defendant relied upon the settled propositions, that, generally, costs should follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. Further, that the power to order costs is discretionary, being exercised after hearing the case on its merits, where generally the successful party is able to recover its costs. 34 The defendant also accepted that there are circumstances where it is appropriate for an order for costs to be made without a hearing on the merits and in such circumstances the court should have regard to matters such as the reasonableness of the parties in commencing the proceedings and the reasonableness of the parties generally. 35 Reliance was specifically placed on the judgment of McHugh J in the High Court in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622. On the basis of the approach of his Honour in that case the defendant submitted that where it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled, or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that no order for costs will be made. 36 In advancing its contentions on this aspect, the defendant relied substantially on the reasonableness of its approach in commencing the interlocutory proceedings it did by way of its notice of motion. The defendant was also critical of the approach of WorkCover in relation to the reference proceedings. As we understand the defendant's submission, it relied upon the fact that the WorkCover Authority is the prosecutor in both the Rockdale Beef matter and the present matter and therefore on 15 July 2005, when the prosecutor submitted the notice of motion should be referred to the Full Bench for determination of the questions of law, it was quite clear that the issues raised by the notice of motion in these proceedings would be dealt with by the Full Bench in the Rockdale Beef reference. 37 Thus, it was contended that there was no reason why the notice of motion before Haylen J could not have been adjourned until after the Full Bench's decision in the Rockdale Beef matter. In elaboration of this submission the defendant submitted that it did not commence the proceedings in question, being the reference to the Full Bench, since pursuant to the terms of s 5AE the defendant could not determine whether such a reference was made nor could it object to the reference and thus the reasonableness of the defendant's actions, in filing the notice of motion, need to be examined in the context of the "legal landscape" at the time of filing which was: (1) At the time that the Department filed its notice of motion, a decision had been handed down by Schmidt J in the Rockdale Beef prosecution matter.

(2) The decision went to the heart of the interpretation of section 10 of the Occupational Health and Safety Act .

(3) The decision highlighted deficiencies in the way the Department had been charged.

(5) The only authority then in existence, the decision of Schmidt J, supported the Department's notice of motion.

It is on these matters that the defendant relies in submitting that it acted reasonably. Conclusions and order

38 We reject the defendant's submission that it should not be ordered to pay the prosecutor's costs of the reference. While it might be said that both parties acted reasonably, in the sense that neither acted improperly or in any way which might be said to be an abuse of the court's process in taking the steps that they did (for example, in the case of the defendant in filing its notice of motion or in the case of the prosecutor in submitting that a reference of questions should be made to the Full Bench or, in the case of both parties, in agreeing to an adjournment of the Full Bench proceedings to await the outcome of the proceedings in the Rockdale Beef reference), it must be recognised that in raising the issues that it did in its notice of motion, the defendant was making a choice as to the approach it would take to the litigation. 39 Although one might understand why the legal advisers of the defendant felt obliged to give the advice they did based on the decision of Schmidt J, it must also be recognised that it was a matter for the defendant whether it acted on that advice and it must be reasonably taken to have accepted that if it acted on that advice then the consequences (including consequences in costs) of so acting would be consequences for which it would be liable. 40 As to the defendant's reliance on the judgment of McHugh J in Lai Qin, it is pertinent to note that his Honour held (at 624): In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs ( Latoudis v Casey (1990) 170 CLR 534). Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order ( Latoudis at 543, 566-568). When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. 41 His Honour's subsequent observations, which are relied on by the defendant, that where both parties acted reasonably no costs order should be made, must be seen in their proper context; for example, at pp 624 to 625, his Honour gave these examples: In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties ( Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action ( Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. 42 His Honour, later at p 625 however, distinguished that situation from those where the court may feel confident that, although both parties have acted reasonably, one party was almost certain to have been successful if the matter was heard. This is such a case. 43 We also consider that some of the observations made by the Full Bench in Lucon at 464 (at [24]) are apposite here. Here, as in Lucon, the reference was appropriate but it is going too far to say that there were public interest considerations in the defendant raising the points it did by its notice of motion. The points raised were essentially to assist, or to vindicate, the defendant's forensic situation in the litigation and, as we have already observed, ultimately the defendant had a choice as to whether it would maintain the points that it raised. We reject the criticism which the defendant appears to be making as to the prosecutor's conduct in seeking the reference of the issues raised by the notice of motion as questions of law to the Full Bench pursuant to s 5AE. That step was the direct and likely consequence of the defendant's notice of motion and it was clearly open to WorkCover to act on the basis that the defendant in filing its notice of motion, and therefore raising similar points to that dealt with in Rockdale Beef, was making a choice in raising the issue and was therefore prepared to accept the consequences of the choice it made. 44 In conclusion, we order that the defendant pay the prosecutor's costs of, and in connection with, the reference to the Full Bench. _______________

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