Linfox Resources Pty Ltd v The Queen; Downer EDI Mining Pty Ltd v The Queen; Thiess Pty Ltd v The Queen [2010] VSCA 319

1 The three applicant companies (respectively, 'Linfox', 'Downer' and 'Thiess') are members of a joint venture which they called the 'Roche Thiess Linfox Joint Venture'.[1] The joint venture is registered in that name for GST purposes, under an Australian Business Number. In the documents in evidence, the joint venture is always referred to as 'RTL', and for consistency we will adopt the same abbreviation.

2 In 2002, Yallourn Energy Pty Ltd,[2] the holder of mining rights for a coal mine in Yallourn, entered into an arrangement with RTL to develop the mine. Under the 'Alliance Agreement', Yallourn Energy agreed to give RTL possession of the mine site and RTL agreed to carry out contract mining. On 31 October 2006, Richard Gauci died as a result of injuries received when he was crushed by a belt clamp on a conveyor at the Yallourn mine. Mr Gauci was an employee of a maintenance subcontractor engaged by RTL ('Silcar').

3 Charges have been laid against the applicants under ss 21, 23 and 26 of the Occupational Health and Safety Act 2004 (Vic) (the 'Act'). There are nine counts, each of which alleges in substance that RTL failed to ensure, so far as was reasonably practicable, that the mine workplace was safe and without risks to health.

4 At the start of the trial the applicants sought a dismissal of the charges against them, arguing that they were unsustainable. (We examine the grounds below). The trial judge rejected the application. Each of the applicants now seeks review, under s 296 of the Criminal Procedure Act 2009 (Vic), of the trial judge's refusal to certify under s 295(3) of that Act. For reasons which follow, we have concluded in accordance with s 296(4)(b) that leave to appeal should be granted, the appeal allowed and the charges against the applicants dismissed.

5 As will appear, both the form of the charges and the evidence relied on reveal a fundamental misconception on the part of the prosecution as to what was required to prove the commission of an offence under the Act by individual members of the joint venture. It is both remarkable, and regrettable, that this was not appreciated earlier. The defect, which could so easily have been cured had it been identified in good time, is now incurable.

6 There was debate at the hearing as to whether it was appropriate for the defendants to have made what amounted to a no case submission before any evidence was called. In our view, that was an appropriate course in this case, given that the legal issues raised went to the very foundation of the case brought against the defendants. For the same reason, the utilisation of the interlocutory appeal procedure was both appropriate and necessary in the somewhat unusual circumstances of this case. In the event, this timely action has saved several weeks of trial time and avoided a great deal of inconvenience to witnesses.

7 'Joint venture' is not a technical term. It is simply a label used to describe a joint commercial enterprise. As the High Court said in United Dominions Corporation Limited v Brian Pty Ltd:[3]

The term 'joint venture' is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. Such a joint venture (or, under Scots' law, "adventure") will often be a partnership. The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as a company, a trust, an agency or joint ownership.

8 A joint venture has no legal existence. It is just a name, a description of an undertaking. In some instances, as the High Court said in Brian,[4] the joint undertaking is carried out through a medium which does have independent legal existence, such as a company or a trust. But, in the present case, no separate legal entity was created for the purpose of carrying out the undertaking. The joint venture had no legal personality separate from the three companies which combined, by contract, in the undertaking.[5]

9 This basal proposition has obvious consequences for the attribution of criminal responsibility for wrongs which occur in the conduct of the business of the joint undertaking. Since a 'joint venture' has no legal existence as such, it can have no criminal liability and cannot be prosecuted. As in all applications of the criminal law, a legal person must be identified on whom (or on which) criminal responsibility is said to fall. In a case like the present, the only legal persons to which criminal responsibility could have been attributed under the relevant provisions of the Act were the three companies whose joint undertaking it was.

10 As we explain below, liability under those provisions attaches to persons who are 'employers' and/or who, at relevant times, have 'management or control' of a workplace. Unless the individual corporate participants in the RTL joint venture could be shown to satisfy one or other (or both) of those qualifying requirements, they could not be held liable under the Act.

11 We assume that there would have been no forensic difficulty in assembling appropriate evidence to establish as against each company that it was an employer and that it was relevantly in control of the workplace at the relevant time. Unfortunately, because of the misconception on which the prosecution's approach appears to have been founded, no such evidence has been gathered in the present case.

12 Counts 1-3 are founded on s 21(1) of the Act, which provides as follows:

(1) An employer must, so far as is reasonably practicable, provide and maintain for employees of the employer a working environment that is safe and without risks to health.[6]

Plainly enough, the duty which this section imposes attaches to, and only to, employers. Under s 5 of the Act, 'employer' is defined to mean:

a person who employs one or more other persons under contracts of employment ...

13 The safety duty under s 21(1) is owed to employees of the employer and, by statutory extension under s 21(3) of the Act, to employees of any subcontractor engaged by the employer. The extended duty applies only to matters over which the employer has control.[7] In the present case, the prosecution contended that the applicants owed the extended duty to employees of the subcontractor, Silcar.

14 The counts laid against the applicants under s 21(1) were in the following form (abbreviated for the sake of simplicity):

[Downer], [Linfox] and [Thiess] all trading with each other as Roche Thiess Linfox Joint Venture ... being an employer it failed so far as was reasonably practicable to provide and maintain for its employees [including Silcar's employees] a working environment that was safe and without risks to health...[8]

15 The threshold allegation, therefore, is that the joint venture (RTL) was an employer, which owed a duty under s 21(1) to its employees (including - by extension - Silcar's employees) to ensure so far as was reasonably practicable that they were able to work safely in the mine workplace. No allegation is made, however, that any of the corporate members of the joint venture was itself an employer which owed a duty to ensure the safety of its employees (or Silcar's employees) in that workplace.

16 Thus the Crown case is that RTL is the employer on whom the safety duty was imposed by s 21(1). That this is a correct reading of the counts is confirmed by the Crown opening, which contains the following statements:

● By operation of law and in fact, RTL was an employer...

● Richard Gauci (and other employees working on the conveyor maintenance) were deemed to be employees of RTL...

● In this case the prosecution alleges that RTL owed a duty to Mr Gauci and other Silcar employees engaged to perform maintenance duties

There is evidence that RTL is an employer at the mine site ...

17 As a matter of law, the proposition that RTL was an employer - and hence a duty holder under s 21(1) - is unintelligible. As explained earlier, the joint venture had no legal personality separate from the corporations which had combined (by contract) in the venture. RTL could not enter a contract of employment. Only its corporate members could. Senior counsel for the prosecution made this very point to the judge. He said:

Each time a document requires legal effect it is signed not by the undertaking [RTL] but by the three accused companies.

18 In order for any one of the applicants to have been shown to be an employer for the purposes of s 21(1), and hence subject to the duty which the section imposes, the Crown had to prove (since it was not admitted) that that company was party to a contract of employment with one or more persons. The prosecution did not, however, approach the case in that way. Having pointed out that it was the three companies which had executed the Alliance Agreement, senior counsel for the prosecution thereafter spoke of the joint venture as if it were a single entity. He told the judge that it was unnecessary to examine the relationship between the joint venturers or the allocation of responsibilities amongst them. For this reason, it seems, the prosecution did not seek to put the joint venture agreement into evidence.

Our point is we don't need to know how [the joint venture] is internally structured. They have authorised and consented to the use of RTL as the undertaking by which the three of them will participate in the joint venture.

...

The so-called single entity or the single undertaking produces a number of documents. There is the project management plan, OHS safety plan, and the Manual of Procedures, and these, we say, are implementation documents which outline how RTL will carry out its responsibility, and thereafter in the depositions there are certain Alliance reports and the reports referred to in the control document[10] show that it is indeed RTL that has assumed responsibility for the mine operations. So we say that it is shown to be the employer, to control the mine operation, to control plant maintenance and to control occupational health and safety.

Now we say, and we contend, that we do not have to show that each individual company had control of the matter or the workplace in its own right.[11]

20 When the judge asked why it was not necessary to prove relevant matters against each individual company, senior counsel responded:

Because it is not how it operates the undertaking. It presents a single front to Yallourn Energy, and says, "We three together, don't you worry about how we go about it, but we three together will operate as this single entity for the purposes of operating the mine and taking all of these matters into account".

So it does not matter who has control within the three of them ...

21 Later, the judge invited the prosecutor to respond to the defence argument that neither the presentment nor the Crown opening made reference to any agent or employee of any of the defendants. Senior counsel responded:

We say that we don't have to, because ... they knew what they were signing, they understood that they were taking on the undertaking and they're charged on that basis.

22 In short, the fundamental premise of the Crown case was that, since the three companies had jointly agreed with Yallourn Energy that they - as the RTL joint venture - would carry out mining, they could be treated as a single entity for the purposes of considering questions of employment, control of operations at the mine and - ultimately - breach of duty. Once it was shown that RTL was an employer, and in control, then it was said to follow - necessarily - that the same was true of each of the three defendants. A breach by RTL was, by definition, a breach by each of them. Thus the Crown opening says:

The prosecution alleges that RTL (and thereby each accused company);

● had control of these matters within the meaning of s 21(3); and that

● failed in its duties and contravened the Act in the manner set out in counts 1 to 3.

There are nine steps which the prosecution alleges map out RTL's control of the matters.[12]

23 As we have pointed out, however, 'RTL' is just a name. 'RTL' does not employ anyone; it is not a dutyholder; it exercises no control; it commits no breach. Nor is there any basis for the contention that the individual companies have some kind of derivative liability through RTL. None of the counts under s 21(1) could succeed against an individual company unless it could be proved that the company was an employer and (in relation to s 21(3)) actually in control of the relevant workplace activity at the relevant time.

24 Like arguments apply to the counts based on ss 23 and 26 of the Act. Counts 4-6 are based on s 23 of the Act, which extends the safety duty of an employer to persons, other than its employees, who may be affected by 'the conduct of the undertaking of the employer'. Counts 7-9 are based on s 26 of the Act, which provides as follows:

(1) A person who (whether as an owner or otherwise) has, to any extent, the management or control of a workplace must ensure so far as is reasonably practicable that the workplace and the means of entering and leaving it are safe and without risks to health.

...

(2) The duties of a person under subsection (1) apply only in relation to matters over which the person has management or control.

25 In contradistinction to ss 21(1) and 23, the imposition of the safety duty under s 26 depends not on the person being shown to have been an employer but on proof that the person had 'to any extent' the management or control of the workplace. At the same time, as s 26(2) makes clear, the duty extends only so far as the person has actual management or control. This limitation corresponds with that which governs the extended duty of an employer under s 21(3), referred to earlier.

26 The language of the counts under s 26 is in these terms:

And the Director of Public Prosecutions further presents that [Downer], [Linfox] and [Thiess] all trading with each other as Roche Thiess Linfox Joint Venture having to any extent the management or control of a workplace it failed to ensure ...

The use of the singular - 'it failed' - betrays the same misconception as underpins the 'employer' counts. Thus the Crown opening stated:

If RTL is found not guilty of these [s 21] counts, then the prosecution alleges that RTL may alternatively be found guilty of [sic] s 26 OHS Act instead.

27 Both before the judge and on these applications, the prosecution relied on the decision of the New South Wales Industrial Relations Commission in Workcover Authority of New South Wales (Inspector Mansell) v Ove Arup Pty Ltd.[13] In that case a prosecution had been brought under s 17(1) of the Occupational Health and Safety Act 1983 (NSW), under which safety duties are imposed on:

each person who has, to any extent, control of non-domestic premises which have been made available to persons ... as a place of work.

The defendant company was a member of a joint venture. In contrast to the present case, however, the defendant had pleaded guilty, thereby admitting to having had control of the workplace in its own right. As counsel for the applicants pointed out in the present case, the only issue on the plea was to what extent the defendant had been in control. Accordingly, the case provided no support at all for the prosecution approach to the present case.

28 In response to the prosecution's contention that RTL itself was an employer and, as such, was subject to the duties imposed by s 21(1), the defendants drew attention to s 145(1) of the Act, which provides as follows:

(1) Subject to sub-section (2), if -

(a) this Act imposes a duty on a person or provides that a person is guilty of an offence; and

(b) the person is a partnership or an unincorporated body or association (including a partnership or an unincorporated body or association representing the Crown) -

the reference to the person is taken to be instead as a reference to each officer of the partnership, body or association (as the case may be).

29 Surprisingly, however, neither side's submissions interpreted this provision correctly. The defendants advanced the following arguments:

• the Crown had a choice as to whether it proceeded against the joint venture as such or against the individual companies;
• it was apparent from the language of the counts, and from the Crown opening, that the Crown had elected to proceed against the joint venture (RTL) as such;
• since the joint venture was an unincorporated association of the three companies,[14] the effect of s 145(1) was that the safety duty - and liability for breach - attached to the officers of the joint venture, not to the joint venture itself;
• since the charges had not been brought against officers of the joint venture, as required by s 145(1), they were bad in law.

designed as a facilitative, and not as a prescriptive provision. ... The section provides a means (previously unavailable under the 1985 Act) to prosecute responsible individuals who comprise the unincorporated body.

In other words, although s 145 provided 'a means ... to prosecute' in a case such as this, the prosecution had not been obliged to take that course and had not done so.

31 Section 145(1) does not give the prosecution a choice. Nor is it in any relevant sense 'facilitative'. The statutory language is quite clear (subject to the conceptual problem identified in the following paragraph). Where s 145(1) applies, it effects a statutory transfer of the safety duties imposed by the Act. Thus, if a partnership makes contracts of employment with its staff, rendering itself an 'employer' for the purposes of the Act, the partnership is 'the person' on whom s 21(1) would otherwise impose a duty. But, since the 'person' is a partnership, the effect of s 145(1) is that the duty is 'taken to be instead' imposed on each officer of the partnership. This transfer of duty, and associated liability, occurs by operation of law. No question of prosecutorial discretion arises.

32 This example serves to highlight a basic conceptual difficulty with s 145(1). As a matter of law, a partnership is not 'a person'.[15] Like a joint venture, it has no legal personality of its own and cannot - as such - attract duties under the Act. The same is true of an unincorporated body or association. On a strict view, therefore, the provision is incapable of meaningful application. This point was not taken by either side, however, and for the purposes of this discussion we have proceeded on the assumption that effect could be given to the clear intention of the provision.

33 Had s 145(1) been applicable to RTL, it would have operated to transfer the safety duties imposed by the Act from the joint venture to 'officers of RTL' (assuming such a category of persons to exist). The companies themselves would have been under no duty to ensure workplace safety at the mine, and could have had no liability for any safety breach.[16] No prosecution for breach could have been brought except against officers of the joint venture.

34 We do not think that this is a result which Parliament could possibly have intended. In our view, s 145 is directed at a situation where there is no corporate dutyholder, that is, no corporate entity on which the Act imposes duties, whether as an employer or as controller of the relevant workplace. The common characteristic of partnerships and unincorporated bodies and associations is that they are not corporate entities. There is no corporate dutyholder in the relevant workplace. In our view, s 145 has no application in a situation like the present, where there is a corporate entity (or more than one) on which - assuming it to be either an employer or a controller of the relevant workplace - the Act imposes safety duties.

35 Again surprisingly, both parties asserted that s 145(1) owed its origin to the 2004 Maxwell Report[17] on the review of the predecessor Act, the Occupational Health and Safety Act 1985 (Vic).[18] This is simply not correct. Section 145(1) is a provision fundamentally different from that which was recommended. This is readily apparent upon an examination of the relevant section of the Report, which recommended only that officers of unincorporated associations (and partnerships) should have the same accessorial liability as officers of corporations. There was no suggestion in the Report that such an association, or a partnership, should be relieved of substantive liability altogether, by having its safety duties under the Act transferred wholesale to its officers.[19]

36 The defendants' alternative submission, before the judge and again on these applications, was that the prosecution had not identified any evidence which could establish that any individual defendant was an employer, or that any individual defendant had, to any extent, management or control of the relevant workplace. As we have seen, the prosecution contended that no such evidence was required.

37 When the Court suggested that such evidence would be readily obtainable, senior counsel for the prosecution made it clear that there would be no supplementation of the evidence at this late stage. This was evidently the agreed position between the parties, but it seemed a somewhat surprising concession for the prosecution to have made. We recognise that, in accordance with authority, the laying of the charges may well have been regarded as precluding any subsequent exercise of the coercive information-gathering powers available to the Authority under the Act. [20] But nothing should have prevented the prosecution from thereafter gathering further evidence by non-coercive means or by the use of subpoenas in the proceeding.

38 The Court invited the prosecution to identify the extent of the evidence which would be relied on before the jury to prove employment, and control, as against the individual companies. This was done in the form of a written 'List of Evidence Relied Upon', filed after the conclusion of the hearing.

39 The evidence which would be relied on by the prosecution to establish that each of the applicants was an employer consists of three items. The first is a statement in the Occupational Health and Safety Plan for the mine, as follows:

During this time RTL has maintained a core workforce, including a fully operational mechanical workshop to service and plant repair both RTL and others. RTL at Yallourn employs approximately 130 personnel for the mine works.

The second is an extract from the Board papers for the Alliance Board, established under the Alliance Agreement. (The Board consisted of two representatives of Yallourn Energy and two nominated by the joint venture.) The relevant Board paper reported on hours worked in the relevant period. The total hours were apportioned between 'RTL', 'Silcar' (the subcontractor), and 'others'. There is also a reference to 'RTL Wages Employees'.

40 The final piece of evidence is an extract from the Project Management Plan for the Alliance, which lists a number of individuals by position. Their duties are variously described as 'RTL Safety Manager', 'RTL Administration Manager', 'RTL Contract Administrator', and so on.

41 It should be noted immediately that the Crown has limited itself to evidence said to show that each of the applicants had employees at this particular workplace. The extended duty under s 21(3) could, of course, apply to an employer which engaged a subcontractor to do work in the relevant workplace but whose own employees worked elsewhere. The fact that the employer was party to contracts of employment would be sufficient to render s 21(1), and hence s 21(3), applicable to it. But the Crown has not sought to contend, in the alternative, that each of these companies must (as a matter of irresistible inference) have employees of its own - for example, in its head office - even if it were not shown to have had employees working at the mine.

42 The evidence which would be relied on does show that there were persons performing administrative and operational tasks for and on behalf of the joint venture. But that evidence singularly fails to establish - doubtless because the prosecution considered that it was unnecessary to do so - by whom any of these persons was employed, less still that any of the defendants was party to a contract of employment and hence was an 'employer'.

43 As discussed with counsel in the course of argument, there is an infinite range of possibilities as to the basis of employment of these 'RTL employees'. They might, for example, be employees of one or more labour-hire companies with which one or other or all of the joint venture companies has entered a contract. Again, a service company may have been set up to provide management services to the joint venture. Or the individuals may all be employees of one of the applicant companies. There is simply no way of knowing.

44 In our view, the bare possibility that one of the applicants, or more than one of them, may have been an employer at the relevant time is wholly insufficient for the case to go forward to a jury. There is no basis upon which a jury could be satisfied beyond reasonable doubt that any, less still all, of the applicants was or were employers and hence subject to duties under ss 21 and 23 of the Act.

45 Pressed to identify the evidence which could show that any of the individual defendant companies had management or control of the workplace, the prosecution referred to three witness statements and to a series of statements in joint venture documents and correspondence. Almost without exception, the documents refer to - and only to - 'RTL'. There is simply no evidence of any individual defendant company having had either management or control of the workplace. Tellingly, the witness statements contain statements of the following kind:

• 'RTL is the operator of the mine';
• 'In 2006, RTL personnel could raise maintenance quality issues on plant maintained by Silcar';
• 'RTL had an influence over what maintenance was being done by their maintenance contractors, in the mine, via their control of access to the mine plant.'

46 Reliance is placed on the following clause of the Alliance Agreement:

12.4 Obligations under the OH&S Act

For the purposes of the OH&S Act, each Alliance Participant will be deemed to be the employer in respect of all operations that are within its control and/or the control of its Subcontractors, Suppliers, employees and agents.

Plainly enough, no contractual arrangement between joint venturers could affect, less still control, how the Act would apply to the conduct of the undertaking. Relevantly for present purposes, the clause proves nothing about the actual state of management or control in the relevant part of the workplace at the relevant time.

47 Even if the Alliance Agreement between the joint venture and Yallourn Energy could be construed as evidencing the assumption, by each of the three companies as contracting parties, of management of and control over the mine site, there is no evidence which would enable the prosecution to show, for the purposes of s 26(2), the extent of management or control exercised by any individual company in the relevant place at the relevant time.[21] Put another way, there is no evidence upon which a jury could be satisfied beyond reasonable doubt that any one of the defendant companies had management or control of any relevant matter.

48 We would have been bound to reject the defence challenge had the inference been reasonably open on the evidence that any of the applicants was an employer and was in control of the relevant activity in the mine workplace. The availability of other inferences consistent with the applicants' having no liability under the Act would not have justified withholding the case from the jury.[22]

49 No inference of employment or control is available, however. As counsel for the applicants correctly submitted, the question of who actually employed the 'RTL employees', and who actually controlled the relevant activity in the mine workplace, is a matter of conjecture and speculation.[23] There is nothing in the evidence relied on which enables 'a deduction ... reasonably [to] be drawn'[24] that any one of the defendant companies was an employer or relevantly in control.

[1] Roche Mining Pty Ltd changed its name to Downer EDI Mining Pty Ltd in 2007.

[2] In 2005, the company changed its name to TRUenergy Pty Ltd.

[3] [1985] HCA 49; (1985) 157 CLR 1, 10 ('Brian').

[4] [1985] HCA 49; (1985) 157 CLR 1.

[5] Counsel for the applicants supported their submissions, both at first instance and on appeal, by reference to W D Duncan, Joint Ventures Law in Australia (2nd ed, 2005) - see esp [4.2.2]. Counsel also drew attention to the following article: J D Merralls, 'Mining Petroleum Joint Ventures in Australia: Some Basic Legal Concepts' (1988) 62 Australian Law Journal 907.

[7] Or would have control if not for any agreement purporting to limit or remove control: s 21(3)(b).

[9] See [39]-[40].

[10] This is a reference to a document entitled 'R v RTL - Control', which was an addendum to the Crown opening.

[13] [2006] NSWIRComm 240.

[14] It is unnecessary for the purposes of this proceeding to decide whether a joint venture between companies constitutes an unincorporated association, either in general or in any particular case: see, generally, Kibby v Registrar of Titles [1998] VSC 148; [1999] 1 VR 861.

[15] See Bishop v Chung Bros [1907] HCA 23; (1907) 4 CLR 1262, 1267 (Griffith CJ).

[16] We set to one side for this purpose the question whether one or more of the companies could have satisfied the definition of 'officer'.

[17] C Maxwell, Occupational Health and Safety Act Review (March 2004).

[18] The applicants relied on a statement to that effect in B Sheriff, OHS in Practice - A Guide to Legislation in Victoria (2010) 11-23.

[19] C Maxwell, Occupational Health and Safety Act Review (March 2004), [772]-[777].

[20] S Donaghue, 'Coercive Questioning After Charge'[2000] FedLawRw 1; , (2000) 28 Federal Law Review 1; Australian Crime Commission v OK [2010] FCAFC 61; (2010) 185 FCR 258; NSW Food Authority v Nutricia Australia Pty Ltd (2008) NSWLR 456.

[21] Cf Stratton v Van Driel Limited [1998] VSC 75, [19] (Byrne J); The Queen v ACR Roofing Pty Ltd [2004] VSCA 215; (2004) 11 VR 187, [66]-[69] (Nettle JA).

[22] Attorney-General's Reference (No 1 of 1983) [1983] VicRp 101; [1983] 2 VR 410.

[23] Holloway v McFeeters [1956] HCA 25; (1956) 94 CLR 470, 476-7 (Dixon CJ), 488 (Kitto J).