Ludowici Ltd v WorkCover Authority of New South Wales

APPELLANT: Mr A R Moses of counsel Solicitor: Mr M Moir Australian Industry Group

LEGAL REPRESENTATIVES: RESPONDENT: Hon. J W Shaw QC with Ms P E McDonald of counsel Solicitor: Mr G Henderson PriceWaterhouseCoopers Legal

JUDGMENT:

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: WRIGHT J, President, WALTON J, Vice-President, BOLAND J Friday, 15 December 2000 Matter No IRC 1871 of 2000 LUDOWICI LIMITED v WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR KANDIAH KALANITHY)

Application for leave to appeal and appeal against decisions of Magistrate O'Shane given on 3 April 2000 and 10 April 2000 in Matter No. CIM99/998 JUDGMENT OF THE COURT 1 This is an application for leave to appeal and appeal pursuant to s 47(4) of the Occupational Health and Safety Act 1983 and s 197(1)(b) of the Industrial Relations Act 1996 from two decisions of Magistrate P O'Shane given on 3 April 2000 and 10 April 2000 in Matter No CIM99/998. In the decision of 3 April her Worship convicted the appellant of a breach of s 15(1) of the Occupational Health and Safety Act. In the decision of 10 April her Worship imposed a fine of $30,000 in relation to the conviction and ordered the appellant to pay the respondent's costs actually incurred, in the sum of $12,670. The proceedings below 2 The prosecution arose from an incident that occurred on 16 September 1997 in which an employee of the appellant, James O'Kane, was injured while operating a 500 tonne hydraulic press at the appellant's premises at Castle Hill. The press was used in the moulding of rubber seals. As Mr O'Kane reached into a die to place more rubber into it, the lid of the die, which was suspended over the die by an overhead crane, fell onto his right hand causing injury. Her Worship found that the cause of the accident was the breaking of the weld on the handle of the lid.

3 The appellant was subsequently charged with an offence under s 15(1) of the Act. The summons alleged that the appellant: failed to ensure the health, safety and welfare of its employees, in particular James O'Kane, in that it failed to provide or maintain a system of work that was safe and without risks to health in respect of the operation of a 500 tonne hydraulic press. 4 The particulars of the charge alleged a failure to: (i) properly assess the integrity of welds attaching a handle to the lid of a die located in the hydraulic press; (ii) provide alternative methods of supporting the die lid in the event of a failure of the handle of the lid; (iii) provide a work method that precluded the need for operators to place hand or arms under a suspended die lid. 5 The appellant pleaded not guilty to the charge.

6 In finding the offence proven, the Magistrate did not refer specifically to any of the particulars of the charge. Her Worship did, however, rely upon a number of factors in reaching her conclusions. These included that: (i) There was no system in place for regular checking of the weld, and that it was left up to the workers operating the press to draw attention to any defects. (ii) For his first time working on the machine the employee was given 20 minutes on the job training, but there was "no evidence that he was informed that he was required to check the machine and report any defects". (iii) It was clear that the "proper maintenance" of the machine as required by the Occupational Health and Safety Act was not in place. (iv) The work the employee was required to perform was "inherently dangerous". (v) "There was no alternative mechanism in place, and in particular, no means by which, in the event of any failure, to obviate an accident of the sort which in fact did occur." 7 Her Worship also found that: It is in looking at the changes to the system of work made by the defendant (the appellant) following this particular incident that the causal connection between the systems of work and the accident and damage to the victim can be most clearly seen. 8 At the time of imposing the penalty of $30,000, the maximum penalty which a Magistrate could impose in Local Court proceedings was $55,000: ss 15(4) and 47(2) of the Occupational Health and Safety Act. The appellant had only one previous conviction, a fine of 20 imposed in 1962 for an offence under the Factories, Shops and Industries Act.

9 As to the question of the costs order made by the Magistrate, the appellant's complaint was that the order was in effect an order to pay costs on an indemnity basis and that there was no basis for her Worship making such an order. The respondent in the appeal proceedings conceded "that it would be appropriate for the order to be varied to provide that the appellant shall pay the costs of the respondent in such sum as agreed or in default of agreement as assessed." Grounds of appeal 10 Mr A Moses of counsel appeared for the appellant. Mr Moses relied essentially on four main grounds against conviction:

1. Her Worship erred in allowing into evidence a record of interview between the prosecutor and the injured employee. This was the appellant's main ground of appeal;
2. Her Worship did not provide reasons, or adequate reasons, for her decision to convict the appellant on each particular of the charge;
3. In finding a breach of s 15(1) her Worship relied upon changes made by the appellant to its work practices after the incident and that this was an error of law;
4. The conviction was against the evidence and the weight of the evidence. The appellant also appealed against the severity of the sentence. 11 The Honourable J W Shaw QC with Ms P E McDonald of counsel appeared for the respondent. Leave to appeal was opposed and the respondent made submissions opposing each of the grounds of appeal.

12 Counsel for both the appellant and the respondent were heard in full on the questions of both leave to appeal and the substantive appeal.

Leave to appeal and the nature of the appeal 13 An appeal under s 47(4) of the Occupational Health and Safety Act and s 197 of the Industrial Relations Act requires the appellant to seek leave under s 188 of the latter statute: Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432; Blue Mountains Disability Services Ltd v Stinson (1999) 92 IR 246.

14 In Drake the Full Bench considered the nature of an appeal under s 47(4) of the Occupational Health and Safety Act and s 197 of the Industrial Relations Act. The Court (Wright J, President and Walton J, Vice President) determined at 446 that: such an appeal is not to be heard by the Full Bench as a hearing de novo, but must be governed by the principles applicable to appeals generally brought under Pt 7 of Ch 4 of the Act. 15 The principles applying to appeals under Pt 7 Ch 4 (particularly s 191) of the Industrial Relations Act are well established: In Re Solicitors (State) Award (No 3) (1997) 72 IR 225 the Full Bench (Hungerford J and Murphy C, with Peterson J concurring) said at 234: It is clear to us that the vice sought to be remedied by the legislature was the "differing interpretations" as to the appeal provisions in the 1991 Act. The remedy, eventually s.191(3) of the 1996 Act, as the speech again made clear, was "to be applied by full benches when considering appeals against discretionary decisions of single members" (emphasis added) and as being "the appropriate principle to apply in appeals against decisions involving an exercise of discretion." In our view, then, and although the Minister indicated "no intention to have two types of appeals and differing approaches to the nature of the appeal principles", the identified mischief and statutory remedy only concerned appeals against discretionary decisions; otherwise, in our view, appeals against matters of law and/or fact were to continue to attract the long-standing and ordinary principles. Even though that will result in different approaches on appeal, the difference will be not a differing approach to the same type of appeal but only the adoption of the appropriate principles according to the type of appeal being considered. We find on this aspect, therefore, that the submissions by Mr Wright are to be preferred over those of Mr Kite and Mr Kimber. In summary, we consider the proper approach to this appeal, and as being entirely consistent with s.191 of the 1996 Act, to be in accordance with the decision of the Full Court (Bauer, Hill and Hungerford JJ.) of the former Industrial Court in relation to appeals pursuant to s.297 of the 1991 Act in Haynes v C I & D Manufacturing Pty. Ltd (1995) 60 IR 149 at 153-154, namely: "Our view is that such an appeal is an appeal stricto sensu on both fact and law, and not, we think, by way of a hearing de novo. As Lord Westbury LC observed in Attorney-General v Sillem ((1864 10 H L C 704 at 724) "(a)n appeal is the right of entering a superior Court and invoking its aid and interposition to redress the error of the Court below" - we regard that as apposite in describing the nature of appeals to the Full Court pursuant to s 297(2)(d) of the IR Act. That principle requires attention by us to the findings of fact made by Schmidt J to determine whether such findings, and the inferences drawn from them by her Honour, revealed any error authorising appellate interference: per Kirby P in Walker v Industrial Court of New South Wales ((1994) 53 I R 121 at 129) and per McHugh J (with whom Mason C J, Deane, Dawson and Gaudron JJ agreed) in Abalos v Australian Postal Commission ((1990) 171 C.L.R. 167 at 178ff). It is not, of course, we would interpose, every case which would require an appellate court to substitute its views for those of the primary judge, and in that respect we agree with the comment by Hill J sitting on appeal in this Court in Hussmann Australia Pty Ltd v Walker ((1993) 48 I R 396 at 406) to the effect that there should be no interference with "conclusions on facts unless (the Full Court) is of the opinion that they were not reasonably open on the evidence". Appeals against a decision involving the exercise of a discretion by the primary judge, on the other hand, have long required that the appellate court is not justified in interfering with the decision appealed from unless it reaches the clear conclusion that by reason of some error, whether of fact or of law, the primary judge not only has taken a different view but has failed properly to exercise the discretion conferred: House v. The King ((1936) 55 C L R 499 at 504-505) and Mace v Murray ((1955) 92 CLR 370 at 378). For completeness, we may perhaps add the special position of the primary judge in cases dependent for their outcome on the demeanour and credibility of witnesses in resolving conflicts in the evidence: Abalos (at 179). The duty of the Full Court on appeal to make its determination on the evidence adduced at first instance is qualified by its ability to call for any other evidence, whether or not fresh or new evidence, and information: s 299. Notwithstanding that power to receive fresh or new evidence, we do not regard such a provision as changing the nature of the appeal, as we have stated it, given by s.297(2)(d). If fresh or new evidence be admitted on appeal, a course arising only where the Full Court itself, and not a party, has "called for" it, the result is that the Full Court will review the challenged decision on the evidence below and on such fresh or new evidence as it thinks fit to receive: see Professional Officers' Association of NSW v NSW Teachers' Federation ((1994) 54 IR 85 at 107)." For completeness, we refer to and adopt the decision of the Full Commission (Bauer and Hungerford JJ, and McKenna CC) of the former 1991 Act Commission in Re Government Cleaning Service (Privatisation) Award (No.3) (1995) 59 IR 348-355 as to the principles to be applied on appeal, and in which the various aspects were reasoned extensively, as being consistent with s 191 of the 1996 Act as to the nature of an appeal: see also the observations to a similar effect concerning the nature of an appeal by the Full Court of the former Industrial Court in Port Macquarie Golf Club Ltd v Stead . See also Hollingsworth v Commissioner of Police (No 2) (1998) 88 IR 288 at 309 and Police Service of New South Wales v Batton (2000) 98 IR 154 at 158 - 159; [2000] NSWIRComm 79 at pars 11 - 14. Leave refused 16 We have decided that in relation to the application for leave to appeal against conviction and sentence, except as to the question of costs, leave should be refused because the matters raised on appeal are not of such importance that, in the public interest, leave should be granted. 17 Consistent with the policy of the Commission we do not propose to give reasons for our decision to refuse leave to appeal, except to make comment in relation to two matters. The first is sentence. We should indicate that, even taking into account the appellant's virtually blemish-free record, we do not consider that a penalty of $30,000 is outside the range of penalty for the nature of the offence of which the appellant was convicted. Admissibility of record of interview

18 The second matter that warrants comment relates to the principal ground of appeal relied upon by the appellant, namely, an alleged failure by her Worship to properly apply s 65(2) of the Evidence Act 1995 by admitting a record of interview with the injured employee. We set out the background to the issue and the submissions in deference to the detailed arguments presented by counsel for both the appellant and respondent. 19 During the hearing before her Worship the prosecutor tendered a record of interview by the prosecutor with Mr O'Kane made on 13 October, 1997. The appellant had objected to the tender of the record of interview on the grounds that Mr O'Kane was not available to be cross examined on what he said in the record of interview and it would be unfairly prejudicial to the appellant. Magistrate O'Shane admitted the record of interview under s 65 of the Evidence Act stating that "In my view all reasonable steps have been taken to ensure the attendance of this particular person and the person is unavailable." 20 Mr Moses submitted that the admission into evidence of the record of interview was a clear error of law in that s 65(2) of the Evidence Act was not correctly applied. Section 65 of the Evidence Act relevantly provides: 65. Exception: criminal proceedings if maker not available (1) This section applies in a criminal proceeding if a person who made a previous representation is not available to give evidence about an asserted fact. (2) The hearsay rule does not apply to evidence of a previous representation that is given by a person who saw, heard or otherwise perceived the representation being made, if the representation was: (a) made under a duty to make that representation or to make representations of that kind, or (b) made when or shortly after the asserted fact occurred and in circumstances that make it unlikely that the representation is a fabrication, or (c) made in circumstances that make it highly probable that the representation is reliable, or (d) against the interests of the person who made it at the time it was made. Note. Section 67 imposes notice requirements relating to this subsection. 21 Whilst the respondent met the notice requirements under s 67 of the Evidence Act, the appellant challenged whether the requirement in s 65(1) that the person who made the previous representation be "not available" had been met. The definition of unavailability appears in cl 4 of Part 2 of the Dictionary of the Evidence Act. Clause 4 provides that: 4. Unavailability of persons (1) For the purposes of this Act, a person is taken not to be available to give evidence about a fact if: (a) the person is dead, or (b) the person is, for any reason other than the application of section 16 (Competence and compellability: judges and jurors), not competent to give the evidence about the fact, or (c) it would be unlawful for the person to give evidence about the fact, or (d) a provision of this Act prohibits the evidence being given, or (e) all reasonable steps have been taken, by the party seeking to prove the person is not available, to find the person or to secure his or her attendance, but without success, or (f) all reasonable steps have been taken, by the party seeking to prove the person is not available, to compel the person to give the evidence, but without success. (2) In all other cases the person is taken to be available to give evidence about the fact. 22 Mr Moses submitted that not only were no reasonable steps taken, but no steps were taken, to comply with pars (e) and (f) of cl 4(1) of Part 2 of the Dictionary of the Evidence Act. 23 It was argued by the appellant that: it cannot be seriously suggested that knocking on the door of the last known address of an injured employee and being told that person has returned to Ireland in some way fulfils your obligations to take all reasonable steps to either find an individual or have that person give evidence for the purposes of criminal proceedings….. 24 It was also submitted by Mr Moses that if the Court found against him in relation to s 65 of the Evidence Act, s 137 of that statute applied. Section 137 provides: 137. Exclusion of prejudicial evidence in criminal proceedings In a criminal proceeding, the court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant. 25 Finally on the evidence issue, Mr Moses argued that the tender of the record of interview without Mr O'Kane being available for cross examination was contrary to the duty of the prosecutor. 26 It was the appellant's contention that the Court should allow the appeal on the evidence point alone on the basis that there was a decision based on inadmissible evidence which occasioned a miscarriage of justice, with the consequence that there should be a verdict of not guilty and no new trial. However, it was acknowledged that this was a matter for the Court's discretion. 27 In opposing this ground of appeal Mr Shaw submitted that: (i) The facts asserted to by Mr O'Kane in his record of interview were otherwise proved by witnesses other than Mr O'Kane; (ii) There was sufficient evidence for her Worship to find that Mr O'Kane was unavailable; the process server was told by a close family relative that Mr O'Kane had gone to live permanently in Ireland; (iii) The record of interview was admissible under s 87(1)(b) of the Evidence Act . Section 87(1)(b) provides that: 87. Admissions made with authority (1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that: (a) when the representation was made, the person had authority to make statements on behalf of the party in relation to the matter with respect to which the representation was made, or (b) when the representation was made, the person was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person's employment or authority, or (c) the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party. (2) For the purposes of this section, the hearsay rule does not apply to a previous representation made by a person that tends to prove: (a) that the person had authority to make statements on behalf of another person in relation to a matter, or (b) that the person was an employee of another person or had authority otherwise to act for another person, or (c) the scope of the person's employment or authority. 28 Having considered the submissions and evidence before the Magistrate we have come to the view that, absent the record of interview with Mr O'Kane, there was sufficient other material before her Worship to prove the facts asserted by Mr O'Kane and for her Worship to arrive at her decision to convict. No injustice, therefore, was caused by the admission of Mr O'Kane's record of interview. 29 Nevertheless, whilst we do not propose to decide the point, we express our reservations about the adequacy of the effort by the prosecutor to find Mr O'Kane or to secure his attendance to give evidence. The evidence was that a summons to give evidence was sought to be served on Mr O'Kane by a process server who was told by Mr O'Kane's sister, Maureen McCloskey, that Mr O'Kane "had gone to Ireland and is living and working there, and that he is not intending to return to Australia in the near future." Nothing was done to confirm whether in fact this was the case. We think this falls short of the requirement under s 65(2) of the Evidence Act to take all reasonable steps to find the person and secure his attendance. 30 We do not consider it necessary to make any finding on Mr Shaw's submission regarding the applicability of s 87(1)(b) of the Evidence Act. 31 As to the question of costs, we consider that the concession by the respondent "that it would be appropriate for the order to be varied to provide that the appellant shall pay the costs of the respondent in such sum as agreed or in default of agreement as assessed", is a proper concession and one of which we approve.

Orders 32 We make the following orders:

1. Except as to the question of costs, leave to appeal is refused and the appeal is dismissed.
2. The order made by Magistrate O'Shane as to costs is varied to provide that the appellant shall pay the costs of the respondent in such sum as agreed or, in default of agreement, as assessed.
3. The appellant is to pay the respondent's costs of the appeal in an amount as agreed or, in default of agreement, as assessed.

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