ROADS & TRAFFIC AUTHORITY OF NEW SOUTH WALES v GRAINCORP OPERATIONS LIMITED [2009] NSWSC 1204 | Case summary

ROADS & TRAFFIC AUTHORITY OF NEW SOUTH WALES v GRAINCORP OPERATIONS LIMITED [2009] NSWSC 1204 | Case summary | Zoe

[16]

(b) Discussions with the Minister on guidelines and protocols 19 The Reasons for Decision of the Local Court set out in considerable detail the history of the defendant's attempts to respond to its obligations under the new provisions. It is unnecessary to refer here to the whole of that history. Consideration will be given to particular aspects in the discussion below. 20 There was a considerable amount of evidence before the Local Court concerning the introduction of the legislation that is central to the proceedings and, to the development of a policy by the defendant in response, which was directed to the implementation of a system. 21 Before the commencement of the relevant provisions of the Road Transport (General) Act on 30 September 2005, representatives of the defendant met with the then Minister for Roads, Michael Costa MP, to discuss the new legislation and the possibility of establishing a grain harvest management scheme (Exhibit 3, Tab 7). The defendant's expressed concern was that any new legislation should include clear and specific guidelines in relation to the receipt of overloaded trucks and their treatment by grain handlers. 22 The Minister in his second reading speech on 6 April 2005 referred to the establishment of a working group with key industry players in order to establish protocols around grain haulage to operate within the new legislative framework (Exhibit 3, Tab 8). On 1 May 2005, the Authority released an issues paper about the proposed protocol (Exhibit 3, Tab 13). One of the key principles of the proposed protocol expressed on behalf of the Authority at that time was that vehicles transporting grain and turning up at grain receival points over five percent of the statutory mass limit would be turned away. Those vehicles up to five percent in excess of the limit would receive up to three warnings. 23 Ultimately, these protocols were not implemented. However, there were a number of meetings between the Authority and the grain industry to discuss the prospective protocol. At a meeting on 11 May 2005, the Australian Wheat Board ("AWB") stated that regardless of whether a protocol existed or not, the grain receivers required guidance as to how to manage overloaded vehicles once the legislation commenced (Exhibit 3, Tab 14). Both the AWB and the defendant were committed to a "common approach" in this respect. 24 The Government's position as at 29 June 2005 appears to have been that vehicles with loads greater than five percent above the mass limit would be permitted to unload. This was the view expressed by the Minister to the NSW Farmers' Association (Exhibit 3, Tab 20). Similarly, in documents sent by Ms Rigas of the Authority to representatives of the defendant, AWB and the NSW Farmers' Association, under the proposed protocol, only breaches greater than five percent were to be "breached" by the plaintiff (Exhibit 3, Tab 21). 25 Mr Benson of the AWB and Mr Falchoni of the defendant met with Mr McMahon of the Authority on 11 August 2005. An email from Mr Benson to his colleagues at the AWB on 12 August 2005 discussed that meeting (Exhibit 3, Tab 30). Relevantly, the e-mail states:- " It was very difficult to pin him [Peter McMahon] down to actually get Govt to possibly give us any advice on how to deal with overloaded vehicles and the legislation but this is what we ended up with…

[17]

… Bottom line if we are seen to cooperate with the RTA at pre harvest meetings, we store data on those vehicles between 0%-5% for any investigations later on, we report >5% vehicles immediately, we can audit our vehicle identification process, and we distribute copies of the RTA flyer at site to breached vehicles, the feeling is we should avoid being the target of enforcement agencies on the grounds we have been good corporate citizens and have done our best to force compliance on deliveries thereby proving a solid reasonable steps defence. The RTA do not want us to put overloaded vehicles back on the road and they do not really care about vehicles in the 0%-3% range as if they stopped them on the side of the road they would give them a 1 tonne tolerance (2%-3% in some vehicles cases) and let them go. … …" 26 Senior management of the defendant discussed the implications of the decision of the NSW Farmers' Association not to support the protocol as put forward by the Authority. The Managing Director's Report for July 2005 records that the defendant and the AWB were seeking to come to an agreed position with the Authority on what action should be taken by bulk handlers when overloaded trucks presented on the weighbridge during harvest (Exhibit 3, Tab 32, p.177). 27 The responsibilities of a consignee or receiver under the "chain of responsibility" legislation were outlined in a document published by the Authority in August 2005 as part of an educative process in relation to the new legislative regime (Exhibit 3, Tab 34). A consignee or receiver under the legislation, the document stated, must not make any demands which require a truck driver "to carry goods that cause vehicle mass limits to be exceeded." 28 The Authority did not provide guidelines to grain handlers such as the defendant and the AWB. The AWB formulated its own policy for overloaded trucks, which was not to turn them away. It provided the defendant with a copy on 1 September 2005 (Exhibit 3, Tab 36). This prompted Mr Falchoni of the defendant to begin drafting a policy for the defendant (Exhibit 3, Tabs 40 and 41). 29 At a meeting of Graincorp's executives on 26 September 2005, before the commencement of the legislation, the defendant's policy and the Authority's response to that policy were discussed. The managing directors' report for September 2005 relevantly stated (Exhibit 3, Tab 47, p.317):- " Grain handling facilities will now be able to receive overloaded vehicles while the emphasis will be on identifying offenders, with 'those who can demonstrate they are trying to do the right thing have nothing to be concerned about'. Both government departments have been made aware of GrainCorp proposed procedure for overloaded vehicles arriving at sites and are comfortable with the approach being taken ."

[19]

(6) The nature of the appeal 32 A prosecutor's avenue of appeal under s.56 of the Crimes (Appeal and Review) Act is, as earlier noted, confined to a question of law only. It follows that a prosecutor is not entitled to appeal on a question of fact or a question of law and fact. 33 It is necessary for the purposes of the present appeal to determine the scope or meaning of the expression "question of law alone" and to identify the precise basis or ground upon which the Authority, as prosecutor, contends that the learned Magistrate erred in respect of such a question or questions. It is necessary to do so as it is impermissible for issues to be raised in proceedings such as the present if, in fact, they do not constitute such a question. 34 It has been held that there is no universally applicable test for distinguishing questions of law from questions of fact: Collector of Customs v Agfa-Gevaert Limited (1995) 186 CLR 389 at 394; Sood v Regina (2006) NSWCCA 114 at [30]. 35 In Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Limited [2006] NSWSC 343, this Court (Johnson J) referred to the relevant authorities in relation to the formulation "question of law" at [59] to [63]. 36 It was there stated:- "59 The formulation 'question of law' employs general words capable of application at different levels of generality: Attorney General for NSW v X (2000) 49 NSWLR 653 at 660 (paragraph 25). The expression 'question of law' is wider than 'error of law': Attorney General for NSW v X at 677 (paragraph 124). 60 A mixed question of fact and law does not fall within the description of 'question of law alone': Williams v The Queen (1986) 161 CLR 278 at 287, 314; Attorney General for NSW v X at 663 (paragraph 44). 61 That an appeal to this Court by a prosecutor from an acquittal in summary criminal proceedings is confined to a question of law alone is not surprising. Such an appeal constitutes a statutory exception to the rule against double jeopardy: Davern v Messel (1983-1984) 155 CLR 21 at 30. 62 However, a decision of a court of summary jurisdiction acquitting a defendant has never been regarded with the same sanctity as the verdict of a jury and the consistent trend of legislation, both in England and Australia, has been towards allowing the prosecution to appeal against an order of a Magistrate dismissing a charge and empowering the Supreme Court on appeal to quash the order: Davern v Messel at 37-38." 37 Whether facts found by a Court or tribunal fall within the provisions of a statutory enactment, properly construed, is generally a question of law: Hope v Bathurst City Council (1980) 144 CLR 1 at 7; Australian National Railways Commission v Collector of Customs (SA) (1985) 8 FCR 264 at 277. However, the Federal Court has qualified that proposition, stating that, when a statute uses words according to their ordinary meaning and it is reasonably open to hold that the facts of the case fall within those words, the question as to whether they do or do not is one of fact: Collector of Customs v Pozzolanic Enterprises Pty Limited (1993) 43 FCR 280 at 288. 38 In the Plaintiff's Outline of Submissions, the Authority contended that the learned Magistrate, in effect, misdirected himself or, more precisely, misapplied the provisions of s.53(3)(b) and (c) of the Act (paragraphs 15, 17, 19, 23, 28, 30, 34 and 38 of the submissions). 39 In relation to the first issue raised by the appeal concerning s.58(3)(b), the Authority contended that the Magistrate "… substituted for the correct legal questions posed by the statutory provisions, a question about the defendant's policy that was inappropriate to determine whether the defendant was in breach of the Act" (paragraph 15). In this respect, the Authority's argument was that it was not whether the policy adopted by the defendant was likely to induce a breach of a mass requirement that was the issue in the case, but whether the "conduct" of the defendant in accepting the overloaded vehicles and discharging them had the relevant effect (paragraph 17). 40 In relation to s.58(3)(c), it was contended that "the requirement of negligence" in s.58(3)(c) was limited to the question as to whether it was foreseeable to a reasonable person in the defendant's position that its conduct would be likely to have the result proscribed by the section. 41 The Authority accordingly contended that the Magistrate misapplied the provisions, firstly, by failing to determine "the relevant conduct" under s.58(3)(b) and, secondly, by failing to apply the test of foreseeability as to the result or likely result of its conduct as referred to in s.58(3)(b). 42 The Authority further argued that the defendant's "policy" was of peripheral relevance and that the conduct of the senior officers of the defendant in adopting it could not be substituted for the legal question posed by s.58. The Authority contended that the Magistrate made that substitution. 43 Finally, the Authority sought to establish error of the relevant kind in the Magistrate's construction of the provisions upon the basis that, in his opinion, the provisions were ambiguous and that such ambiguity should be resolved in favour of the defendant. It contended the provisions were not ambiguous and were concerned simply with the defendant's "foresight of the result of the defendant's conduct" (paragraph 34). I will deal with this aspect below. 44 In essence, aside from the last-mentioned question of ambiguity, the claimed questions of error of law arising on the second amended summons amounted to a contention by the Authority that the learned Magistrate misapplied the provisions of s.58(3)(b) and (c). 45 It will be necessary in the determination of the appeal to consider the questions of law raised by the Authority in their factual context and by examining the terms of s.58(3)(b) and (c). There is no scope in the present appeal for a merits review or a challenge on questions of fact. It will, however, be necessary to refer to the factual matters that provide the context in which the construction of s.58(3) is to be undertaken.

[49]

(a) Plaintiff's submissions 60 The Authority contended that the Local Court, in considering the issues in terms of s.58(3)(b) and (c), misapplied the provisions, in particular, in determining whether or not the defendant's conduct was likely to induce breaches of gross mass requirements and in taking into account the defendant's policy in respect of its obligations under the 2005 legislation on the issue of negligence. The Authority argued that the "conduct" of the defendant was the issue and that this was limited to the company's activities in its acceptance of overloaded vehicles and in the discharge of their loads at the defendant's depots on the relevant dates. The defendant's September 2005 policy, it contended, was not part of the relevant "conduct" under s.58(3). 61 Behind Tab 90 of Exhibit 3 is a table of consignments which were accepted by the defendant as being in breach of a particular mass requirement by vehicles when deliveries of loads were made. In respect of each vehicle, there is an entry described as a "first overload". No prosecution was commenced against the defendant for the first overload but only for second and subsequent consignments which were considered "severe" breaches of the mass requirement. The Authority contended that each subsequent acceptance of a load in breach of the mass requirement was likely to induce a further mass breach. The Authority did not contend that the giving of the warning by the defendant constituted a breach. Its contention was that the defendant acted negligently in accepting the second and subsequent loads and that it should have refused delivery until the loads were within legal requirements. 62 Accordingly, at the centre of the Authority's argument was the proposition that the learned Magistrate erred in treating the policy adopted in September 2005 as "conduct" of the defendant likely to induce a breach for the purposes of s.58(3)(b). Reference was made to paragraph [56] of the learned Magistrate's Reasons for Decision which, it was contended, connected the defendant's policy to the likelihood that further loads would be received by the defendant in breach of a mass requirement. It was claimed that the policy was, in fact, likely to have induced a breach of a mass requirement. 63 The issue, it was argued, which the learned Magistrate was required to determine under s.58(3)(b) was whether that conduct, not the adoption of the policy, was likely to induce a breach of the mass requirement. The policy, in the plaintiff's submission, was only relevant to s.58(3)(c), namely, whether the defendant was negligent as to the matters referred to in s.58(3)(b). 64 The Authority also submitted that in concluding that s.58(3)(c) was ambiguous, and that such ambiguity in regard to a penal provision must be resolved in favour of the defendant, the learned magistrate erred (see decision at [55]). In relation to the construction of penal statutes, the plaintiff relied upon the observations of Gibbs J in Beckwith v Regina (1976) 135 CLR 569 at 576:- " The rule formerly accepted, that statutes creating offences are to be strictly construed, has lost much of its importance in modern times. In determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous or doubtful the ambiguity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences: see R. v. Adams ; Craies on Statute Law , 7th ed. (1971), pp. 529-534. The rule is perhaps one of last resort ."

[52]

(b) Defendant's submissions 67 The defendant contended that, although the learned Magistrate incorrectly expressed the question for determination in the judgment at [56], the statement in that paragraph needed to be read fairly in the context of the judgment as a whole. The reference to the policy in that paragraph, properly understood, was one that covered the conduct of the defendant that gave effect to the policy. 68 The defendant submitted that it was relevant for his Honour to take into account the circumstances that directly informed the defendant's conduct and that these included, in particular, both the formulation and the implementation of the defendant's policy. 69 It was contended that the case that had been particularised against the defendant was one of systemic negligence. In that respect, it was necessary for the learned Magistrate to specifically consider the defendant's policy to issue warnings and maintain records of excessive loading that would be made available to the Authority. The particulars requested by the defendant and supplied on behalf of the Authority were behind Tabs 86, 87, 88 and 90 of Exhibit 3. The allegations of negligence were said to travel beyond foreseeability and included concepts of duty and breach of duty, as well as an alleged failure to implement stated procedures. 70 The defendant contended that its policy as implemented was relevant both to the issue under s.58(3)(b) and to the question as to whether the conduct specified was negligent under s.58(3)(c). When so understood, the defendant contended, the learned Magistrate's decision was not erroneous. 71 The issue of negligence arising under s.58(3)(c), could not, it was contended, be determined merely by proof of reasonable foreseeability. Further, the correct test to apply in relation to s.58(3)(c), in the defendant's submission, was that formulated in Regina v Nydam [1977] VR 430 at 445 and expressed by the Court of Criminal Appeal in NSW Sugar Milling Co-Operative Ltd v Environmental Protection Authority (1992) 59 A Crim R 6 (at 12) in the following form:- " The question is whether that body [the appellant co-operative] fell so short of the standard of care of an objectively reasonable person in the position in which it found itself that it was negligent to the criminal degree ." 72 In the present case, the defendant argued that for the Authority to establish that it was negligent under s.58(3)(c), it had to establish that it failed to take all reasonable steps to avoid engaging in conduct that was likely to result in inducing a breach of a mass requirement by others. 73 The likely result of the defendant refusing to accept a load from a vehicle in breach of a mass requirement, the defendant argued, would have been to force drivers of overloaded vehicles back onto the road thereby exposing the defendant to liability under s.58(3) or s.82 of the Act. The defendant contended the intention of Parliament could not have been to impose a duty under s.58(3) that would conflict with other provisions of the Act. This was an important matter in determining whether the defendant was negligent or not. 74 Accordingly, the defendant relied upon the proposition that, if it is impossible to do a thing specified in a statutory provision without contravening another law, the provision may be construed either as authorizing the doing of that thing (so that it is inconsistent with the other law) or as imposing a qualified duty which stops short of requiring contravention of the other law: Commercial Radio Coffs Harbour Limited v Fuller (1986) 161 CLR 47 at 50. 75 In determining what a reasonable person in the position of the defendant would do in response to the risk in question, the defendant contended that the Court should consider "the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have": Wyong Shire Council v Shirt (1979) 146 CLR 40 at 47.

[62]

(ii) The meaning of "induce" 85 The word "induce in s.58(3)(b) is a significant one. It is not defined in the Act. The Oxford English Dictionary defines "induce" as meaning "to lead (a person), by persuasion or some influence or motive that acts upon the will, to (into, unto) some action, condition, belief, etc.; to lead on, move, influence, prevail upon (any one) to do something". 86 In Finance Sector Union v Commonwealth Bank of Australia [2000] FCA 1372, Finkelstein J considered the meaning of the word "induce" in the context of s.298M of the Workplace Relations Act, which prohibits an employer from inducing an employee to stop being a member of an industrial association. His Honour there observed at [36]:- " To assert that one person has induced another to act is to say that, by words or deeds, the first person has caused the second person to act in a particular way . Put another way, the acts or deeds of the first person constitute a reason for the second person to act in a particular fashion: see generally H L A Hart and T Honoré, Causation in the Law (2nd ed, 1985), esp. ch II. Indeed, those authors say (at p 54) that a person has been induced when a course of action is made ' more eligible ' than it otherwise would have been or where there is an extra reason for doing the action. Thus, inducement may be obvious, such as by bribes, threats or offers of reward. Or it may be subtle, by manipulation . " (emphasis added) 87 The word "inducing" was considered by Kiefel J in ACCC v Mayo International Pty Limited (1998) 85 FCR 327 in relation to s.48 of the Trade Practices Act 1974 (Cth) which prohibited resale price maintenance. Acts comprising resale price maintenance included "the supplier inducing, or attempting to induce, a second person not to sell, at a price less than the price specified by the supplier, goods supplied to the second person by the supplier or by a third person who, directly or indirectly, has obtained the goods from the supplier" (s.96(3)(b)). Her Honour stated at 329:- " In the case of an inducement, the statutory provision will be satisfied where the necessary causal connection is shown between the supplier's words or actions and the maintenance of price. When an attempt is in issue, the essential question will be whether the supplier can be shown, by the conduct in question, to have intended the reseller to act in that way. 'Inducing' to my mind conveys both the means employed and the result . It refers to actions which are effective, although they may not have comprised actual coercion or pressure, or the offer of an advantage: see Heating Centre case at 164, Pincus J. In the present case it has not been shown that the franchisees were in fact induced by what was arranged. It has not been shown that Mr Jackson ever made plain what their supposed obligations were and the evidence relating to the individual contraventions suggests that he did not ." (emphasis added) 88 In the context of s.58(3) as a whole, the relevant actions or conduct must, accordingly, possess a character or a quality that is capable of inducing or rewarding a breach of a gross mass requirement. There must be proof of a fact or matter that establishes that the conduct in question has such a character or quality. Whilst the mere doing of an act may be capable of inducing a breach, there may be no likelihood of it actually doing so. The repetition of an act may or may not have the requisite quality. Similarly, the influential or persuasive effect of conduct may vary according to whether it is alleged to have resulted from a positive act or statement or whether it is claimed to have arisen from mere inaction. 89 As Finkelstein J observed in the above case, an inducement in some circumstances may be obvious. In others, it may be subtle.

[63]

(a) Findings on s.58(3)(b) 90 There are only two paragraphs, being paragraphs [45] and [56], in the Magistrate's judgment that directly record observations concerning the application of s.58(3)(b) to the facts of the present case. 91 Firstly, in paragraph [45], the following appears:- "45. Clearly, with the benefit of hindsight, what happened after the 30 September 2005 supports the submission that the conduct, being the policy of the defendant not to turn away overloaded vehicles, created a situation where there was a real and not remote chance that further loads in breach of a relevant mass requirement would be received by the defendant. Of course, that was its stated policy. That policy was publicly disclosed prior to 30 September 2005 and was not subject to criticism at that time by the RTA. It is not without significance that the same policy was adopted by AWB." 92 I do not consider that this paragraph was intended to express, or could be taken as expressing, the Magistrate's concluded view in relation to the issue that arose for determination under s.58(3)(b). Firstly, there is no preceding analysis in the judgment which would support the proposition that the paragraph should be read as expressing a final or a concluded opinion. Secondly, the phrase "… with the benefit of hindsight" is not indicative of either an objective or prospective construction of the provision and stands in contrast to the terms of s.58(3)(b) which incorporate a prospective notion, "… likely to result". 93 The other paragraph in the judgment on the subject of s.58(3)(b) (paragraph [56]) does, clearly, express a concluded view on the operation of that provision:- "56. I am not satisfied beyond reasonable doubt that the policy adopted by the defendant in September 2005 was likely to induce a breach of a relevant mass requirement and that the defendant was negligent in adopting such a policy …" 94 The submissions for both parties proceeded upon the basis that the provisions s.58(3)(b) involve a causal concept, a matter that is evident from the terms employed in the provision, namely, "… results or is likely to result in inducing or rewarding a breach …" (emphasis added).

[64]

(b) The issue of "conduct" 95 As discussed in paragraph [55], the prosecutions in this case alleged that the defendant's conduct, as consignee, in accepting overloaded vehicles and permitting discharge of their loads at its depots constituted the "conduct" charged in the C.A.Ns, on the basis that such actions were likely to result in growers or their transport operators breaching mass load requirements. 96 Inherent in the plaintiff's argument is the proposition that the repetition of such conduct (namely, the receipt of goods where there had been a previous breach or breaches of gross mass requirements by the same vehicle), despite the warning given by the defendant, constituted conduct "likely to result in inducing" the breach specified in s.58(3)(b). 97 Foundational to this line of argument is the further proposition that the warnings that had been given by the defendant were ineffective. Stronger action, the Authority, in effect, argued, was called for. The failure of the defendant to turn overloaded vehicles away meant that the "conduct" charged was likely to result in inducing a breach of a relevant mass requirement. Implicit in the argument is a contention that there was an obligation or a duty on the defendant to do more than it did in deterring others from breaching the relevant requirement. 98 When analysed in this way, the Authority's case in relation to the issue arising under s.58(3)(b) embraces notions of duty and causation, and their inter-relationship. The question as to whether the defendant was under a duty or an obligation to go beyond the warning system that it adopted, in particular, whether it was incumbent upon it to take affirmative action to prevent delivery as the Authority suggested, is considered below. 99 The question of law raised in the appeal involves the proposition that the Magistrate substituted the wrong "conduct" (the policy) for the relevant acts in applying the provisions of s.58(3) (acceptance and discharge of the loads). Given the quasi criminal nature of the offences created by s.58, the "conduct" referred to in s.58(3) must be capable of being clearly identified. Only then will it be possible to decide whether such conduct was causally significant in the sense of it being "likely to result in inducing" consignors to breach the gross mass requirements. The question of law raised in relation to s.58(3)(b) may then also be examined. 100 In relation to the prosecutions instituted by the Authority, three matters are noted:-

[67]

(3) In proving this element of the offences, the Authority accepted before the Magistrate, that it relied upon the drawing of inferences from the matters established by the evidence to which I have referred. 101 The defendant's contention was that, on the evidence relied upon by the Authority, all that could be said was that, on the specific occasions in question, the defendant's acceptance of second and subsequent loads that exceeded the gross mass requirements failed to deter a further overload. To conclude that the conduct was likely to result in inducing, encouraging or persuading further overloads was said to be a very different matter. The fact that certain drivers either chose to ignore or, for whatever reason, acted contrary to the warnings given to them by the defendant, did not mean that in it accepting "overloads" such conduct, without more, could be considered to have been likely to result in inducing breaches. 102 It was the Authority's onus to establish beyond reasonable doubt that the conduct" of the defendant was likely to result in inducing a breach of a gross mass requirement by others. To discharge that onus, the Authority was required to adduce cogent evidence by which that fact was established. The defendant's warning/recording breaches system was part of the delivery/unloading process operated by it in the relevant period. As such, that system was integral to the conduct particularised in the C.A.Ns. There was no submission made that the evidence concerning the defendant's system of warning/recording in the relevant period was not properly admissible on the issues under s.58(3)(b) and (c). 103 As to the evidence suggesting that the warning/recording system failed to deter several (but not all) consignors from breaching the gross mass requirements, such failure, of course, may have been attributable to a combination of factors. 104 The fact of trucks at times presenting themselves at the defendant's depots, notwithstanding earlier warnings given by the defendant may, but would not necessarily, without more, point to the defendant's conduct as the, or even a, causal factor. It was for the Authority, which carried the onus of proof, adduce evidence that moved the causal issue beyond speculation as to the likely causes of particular breaches. 105 In this respect, and contrary to the submissions made on behalf of the Authority, I consider that the learned Magistrate did address the relevant issues arising under s.58(3) (see, in this respect, paragraph [55] above). His Honour clearly identified the elements said to constitute "the conduct" referred to in the C.A.Ns. For reasons I have earlier stated, he was entitled and, indeed in my opinion, was required to take into account the factual context in which the particular deliveries and discharge of the loads occurred. That context included the specific warnings that had been given to the relevant consignors by the defendant's employees in accordance with the policy earlier promulgated. The giving of the warnings and the particular terms of these warnings were material to both the issue of inducement under s.58(3)(b) and to the issue of negligence under s.58(3)(c). 106 Dr Birch submitted (at transcript, p.46) that the learned Magistrate did not address the correct question. The submission in this respect was:- "… He is referring inappropriately to the policy adopted in November 2005 [sic] . He is not asking himself can I find that there was inducement by inferring from the fact that the particulars disclosed and summarised in the schedule revealed this re-presentation or repetition. The point is that he did not address the question. So that was his error on that point." 107 The Authority's submissions refer to the defendant's "policy" and criticise the Magistrate for having evaluated the issues under s.58(3) by reference to it rather than to the conduct specified in the C.A.Ns. However, it is of particular importance to bring to account, on a proper reading of the Reasons for Decision, what it was that the learned Magistrate considered to be the relevant conduct and what his Honour took into account in relation to it. It is clear, in my opinion, that the conduct to be considered under s.58(3)(b) included what I have earlier referred to as the warning/recording system as implemented by the defendant. His Honour, in my opinion, properly had regard to the policy, in particular, to the policy's rationale, to its terms and to its application or implementation as part of the delivery process.

[68]

(c) The matters before the Magistrate 108 The Reasons for Decision set out the history of the policy, its development and its practical application. There are references in the Reasons to a "draft policy" (paragraph 28), to "a final draft" (paragraph 29) and to the policy that was "adopted" on 26 September 2005 (paragraph 31). The learned Magistrate, in relation to the period October to December 2005, referred to the defendant's receipt of grain at its handling sites and to the fact that "in the receipt of grain, the defendant applied its policy of not turning away overloaded vehicles …" (paragraph 32). It is clear that his Honour distinguished the policy in its early draft form through its evolutionary stages to its adoption and final implementation. 109 The evidence was that the particular deliveries the subject of the prosecutions were made upon the basis of the terms in the Commodity Receipts, copies of which were attached to Mr Eurell's affidavit sworn 22 October 2008. These conditions, as earlier noted, were set out on the reverse side of the receipts (see Exhibit A, the terms of which were based on the defendant's September 2005 Policy, a copy of which is at p.38 of Mr Eurell's affidavit). 110 The policy and its effectiveness or otherwise were matters to which considerable attention was given in evidence and in submissions. The submissions of the Authority to the Magistrate by Mr S Odgers SC, then appearing for the Authority, included references to the "warning" that had been provided by the defendant which was criticised as not "unequivocal" (transcript 1 May 2008, p.169). At transcript, p.177, Mr Odgers contrasted the September and December 2005 policies and referred to the evidence of a reduction in the number of breaches and submitted (transcript, p.177):- "… We contend that that's powerful evidence that the earlier policy was conduct, as the policy was implemented , that was such as to be likely to lead to further mass breaches …" (emphasis added) 111 It is clear from the transcript of proceedings that the policy as implemented by the defendant was central to the factual matrix concerning the deliveries the subject of the prosecutions and that the parties proceeded upon that basis. 112 As to the issues considered by the learned Magistrate in terms of s.58(3), the Reasons for Decision should be understood in light of the submissions and issues that were before him as decision-maker. See TS v George (Studdert J, unreported 14 April 1998); Murphy v Director of Public Prosecutions [2006] NSWSC 965 at [50] per Whealy J. 113 The submissions made on behalf of the Authority on the policy were referred to in paragraph [44] of the Reasons for Decision. It is in light of the matters raised in evidence and in submissions that the Magistrate's reference to "policy adopted" in paragraph [56] of the reasons should be understood.

[69]

(d) Inducing conduct must be considered in context 114 The terms of s.58(3) require the "conduct" to be identified for the purpose of determining whether it is "… likely to result in inducing …". The anterior questions, accordingly, are, what is the conduct and was the conduct of such a character as to fall within the subsection? 115 It is necessary that the character of the conduct be determined in all the circumstances of the case. The characterisation of conduct under s.58(3) has some similarities to the issue of the characterisation of conduct as misleading or deceptive as "likely to mislead or deceive" within the meaning of s.42 of the Fair Trading Act 1987, as to which, see the discussion by French CJ at [24] to [36] in Campbell v Back Office Investments Pty Limited (2009) 257 ALR 610. 116 As the Chief Justice observed in Campbell (supra) at [24], contextual factors may play a role in determining causation such as is conveyed by the phrase "likely to". So, in the present case, the Magistrate was required to consider the relevant acts charged in their particular context for the purpose of determining whether they were "likely to result in inducing" (a breach). 117 Accordingly, in applying the provisions of s.58(3)(b), both the circumstances and context of the questioned conduct must be taken into account. There is a significant difference in a case where, for example, the circumstances involve the positive inducement of breach (eg, by statement) from one where a consignee does nothing to deter overloading and where a consignee sounds a warning against overloading vehicles. The policy as, it was applied by the defendant, was a circumstance that was to be taken into account in characterising the "conduct". No error of law arose in his Honour doing so, he being bound to consider all relevant contextual and other circumstances. 118 There was no dispute that the defendant's policy was considered relevant to the question of whether the defendant's conduct was likely to induce a breach. Evidence is relevant if it can rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding: s.55 of the Evidence Act 1995. The policy, as implemented, was relevant in that it was evidence of "conduct" in accordance with that policy. It, in turn, was relevant to a fact in issue, namely, whether the conduct was likely to induce or deter, that, in turn, being a question of fact ultimately for the Magistrate to determine. In other words, it was evidence that, if accepted, would go to rebutting the plaintiff's case on inducement. Once such evidence was considered relevant and admitted, it formed part of the circumstances of the case. The reasoning of the Full Court in BHP Iron Ore Pty Limited v Australian Workers' Union (2000) 171 ALR 680 at 696 is apposite here:- "Construed in its context … it appears to us that s.298M will be contravened by conduct that leads or moves, by persuasion or influence, an employee to stop being a member of a union. It further appears to us that it is essentially a question of fact, to be determined by looking at all the circumstances of the case." 119 The circumstances of the case on the admitted evidence included the defendant's policy. Accordingly, such circumstances were required to be considered and taken into account in determining the relevant factual question which was whether the defendant's conduct could be properly characterised as being likely to induce. 120 The submission for the Authority to the effect that the "conduct" the subject of the prosecutions did not or could not include the defendant's policy as implemented in the period October to December 2005 is, in my respectful opinion, for reasons discussed above, without foundation. It follows that the Authority's contention that the Magistrate wrongly treated the policy as the "conduct" of the defendant likely to induce a breach for the purposes of s.58(3)(b) is equally without foundation. The learned Magistrate, in my opinion, correctly identified the acts said to constitute the conduct particularised in the C.A.Ns and evaluated them for the purposes of applying the provisions of s.58(3)(b) along with the facts arising from the application of the defendant's policy/warning system. His Honour, in doing so, in my opinion, correctly applied those provisions to the facts of the case. 121 It follows from the conclusions I have expressed that the Authority has failed to establish error involving a question of law in terms of s.56 of the Crimes (Appeal and Review) Act.

[71]

(b) Negligence in statutory offences 123 The word "negligent" is to be considered in its statutory context. As earlier observed (paragraph [49]), s.58 creates offences based upon the liability of a consignee depending upon whether the consignee has acted intentionally (s.58(1)(c)), recklessly (s.58(2)(c)) or in a negligent manner (s.58(3)(c)). 124 It is, accordingly, necessary to derive the meaning of the term "negligent" in the latter provision. The legislature may create a statutory offence of a criminal or quasi-criminal nature in which negligence is an element of the offence: see discussion of such offences in Environment Protection Authority v Ampol Limited (1993) 81 LGERA 433 per Mahoney JA at 437 to 438. In Ampol Limited (supra), Mahoney JA (at 438) observed in relation to the concept of "negligence" (the relevant provision in that case, s.6(1) of the Environmental Offences and Penalties Act 1989 was directed to a person who, without lawful authority, wilfully or negligently caused any substance to leak):- "… ordinarily the term involves two things: that there was a duty not to do the act impugned and that that act was done … the legislature required that in doing what was impugned, the accused fell below the standard of conduct required of it." 125 In an earlier case also concerned with s.6(1) of the Environmental Offences and Penalties Act, NSW Sugar Milling Co-operative Limited v Environmental Protection Authority (supra), Allen J (at 12) considered that negligence involved a question as to whether the corporate body fell so short of the standard of care of an objectively reasonable person in the position in which it found itself that it was negligent to the criminal degree. 126 In State Pollution Control Commission v Kelly (unreported, Land and Environment Court of NSW, 21 June 1991), Hemmings J, similarly observed that negligence was an element of the offence which a prosecutor was required to prove beyond reasonable doubt but that not all criminal offences which had negligence as an element required proof "… of a high degree of negligence" (p.9). His Honour added that such an offence may require "… no more than giving 'negligence' a meaning consistent with its ordinary usage in everyday life expressed in terms appropriate to its context". 127 In that case it was also stated that the provisions of s.6 compelled:- "… the objective determination in each case of a standard of care, rather than nominate a degree of departure which is necessary to constitute negligence. The degree of departure from such standard would be more relevant after conviction in the assessment of penalty appropriate to the offence …" (p.9)

[73]

(d) The defendant's response to the provisions of s.58(3) 129 This was not a case in which the defendant failed to take any steps by way of precaution or in guarding against the conduct referred to in s.58(3). There was a considerable body of evidence, referred to in the Reasons for Decision, of the defendant having given active consideration at a senior executive and managerial level to the new provisions creating liability in consignees and to the formulation and implementation of the September 2005 policy. 130 I have earlier stated in paragraph [111] that the application of the defendant's policy in the relevant period was a relevant fact concerning the conduct about which the learned Magistrate was required to make findings and that his Honour did do so. The real criticism made by the Authority was that the steps taken by the defendant to issue warnings were inadequate or insufficient and that it should have gone further and have refused to accept vehicles which exceeded the gross mass requirement. However, that is a factual issue going to breach. There is no doubt that a refusal to discharge the load from such vehicles would have represented a more stringent response than a warning. That, however, was not the question which the learned Magistrate was required to consider. It is, moreover, not the question of law on this appeal. 131 The issue for determination in the prosecutions was whether or not the defendant acted in breach of the standard of the reasonable person in its position exercising reasonable care, skill and foresight. 132 A person who is subject to a particular duty of care may be required to take certain protective or precautionary steps to avert or minimise the risk of certain events occurring. The fact that such measures may not ultimately prove to be effective does not, of itself, establish negligence. 133 In the present case, the Authority proceeded with the prosecutions before the Magistrate upon the basis of the evidence to which I have earlier referred and sought to have the learned Magistrate conclude, as a matter of inference, that the defendant was negligent. 134 There was no evidence adduced in support of the prosecutions which established what a reasonable person in the position of the defendant would or should have done in the circumstances in which the defendant found itself. The duty arising under s.58(3)(c) to exercise reasonable care, in the sense to which I have earlier referred, did not require the defendant to ensure that a breach of mass requirements by others could not or did not occur. In those circumstances, the onus was upon the Authority to establish that the action taken by the defendant (the implementation of the September 2005 policy) did not measure up to or constitute the exercise of reasonable care, skill and foresight according to the applicable objective standard. 135 Although, on a question of law, the factual matters relating to the alleged breach of duty do not arise for consideration. I will briefly refer to some matters by way of context in which the questions raised do arise. The evidence did not establish that, following the implementation of the company's September 2005 policy, widespread overloading occurred at its depots throughout the State. In paragraph [34] of the Reasons for Decision, reference was made to Mr Lloyd's evidence that there had been "… reasonable compliance in northern NSW around Moree but in the central west it was the opposite. Repeated overloading often in the severe range was being recorded at Graincorp sites. This is confirmed by the documents contained in Exhibit 2 … Over 58% of the offences were identified in the central west". 136 The evidence rather pointed to a regional issue concerning an overloading problem in the Central West, rather than one of a general State-wide nature. The reasons as to why that problem was more prevalent in that area are not clear. An inference, however, may well have been open from the established facts that the September 2005 policy was not uniformly ineffective. 137 The evidence, as I have earlier stated, established that, had the policy required overloaded trucks to be turned away, this could give rise to other problems. In paragraph [41] of the Reasons for Decision, reference is made to the defendant's policy to not turn away trucks for the reason that "this only results in overloaded trucks being returned to the road causing further damage and risk". On the evidence, the defendant took into consideration the problem of potential liability under the provisions of s.82(1) of the Act. In exercising care, it was entitled to at least have regard to that matter and the Magistrate was entitled to bring it into consideration. Section 82(1) provides that a person who causes or permits another person to commit an applicable road law offence is taken to have committed that offence and is punishable accordingly. The submission for the defendant in that respect was:- "36. The Parliament cannot have intended to impose a duty under s.58(3)(c), the performance of which would expose a person to prosecution for another offence against the same Act" : Defendant's Outline of Submissions 138 Reliance, as earlier noted, was placed, in this respect, upon the decision in Commercial Radio Coffs Harbour Limited v Fuller (1986) 161 CLR 47 at 50. 139 To satisfy the requirement in s.58(3)(c), the Authority had to establish that the defendant was negligent as to the matter mentioned in paragraph (b). In other words, in this case it had to adduce evidence that established that the defendant was negligent as to whether its conduct was likely to result in inducing or rewarding a breach of a relevant mass requirement by consignors. 140 As discussed above at paragraph [42], his Honour made a number of findings in relation to the development and implementation of the defendant's policy (at [53]). His Honour, in particular, made a finding of some significance, namely, that in respect of the policy adopted by the defendant, the company held a belief, which was found by him to have been a reasonable one, that the collection of data, the issuing of written warnings and the provision of information to the Authority upon request should have been a discouragement to overloading (at [53]).

[80]

(5) The matters in (3) and (4) were also relevant upon the issue of breach of duty. 146 I do not consider that the learned Magistrate misapplied the provisions of s.58(3)(c) as the Authority has contended. I do not, in particular, consider that the Magistrate's application of those provisions to the facts raises a question of law under s.56 of the Crimes (Appeal and Review) Act. (19) Notice of contention 147 A notice of contention was filed on 20 May 2009 on behalf of the defendant. The stated ground of the notice of contention was:- "The learned magistrate held that 'likely' in s.58(3)(b) of the Road Transport (General) Act 2005 meant 'a real and not remote possibility', whereas his Honour should have construed the term to mean 'a high degree of probability but not necessarily in excess of 50%'." 148 In the proceedings in the Local Court, the defendant did not contest the submission made by the plaintiff that the correct meaning of the word "likely" for the purposes of s.58(3)(b) was "a real and not remote chance" ([43] judgment). 149 The defendant submitted in the present appeal that the correct definition of "likely" is a high degree of probability but not necessarily probability in excess of 50%, relying upon the decision in Tillman v Attorney-General (NSW) (2007) 178 A Crim R 133. In that case, the Court of Appeal upheld the meaning of "likely" as applied by Bell J in relation to the circumstances of the relevant sex offenders legislation. Her Honour held at [89] that the word "denotes a degree of probability at the upper end of the scale, but not necessarily exceeding 50%". Given that s.58(3) makes consignees of goods criminally liable, it was contended that a higher standard of likelihood ought to apply: ASIC v Nomura International PLC (1998) 89 FCR 301; Attorney-General (NSW) v Winters (2007) 176 A Crim R 249 at [33]-[47]; Tillman (supra). 150 The Authority contended that there was not a substantive difference between the formulation adopted by the defendant in the notice of contention and the standard which was applied by the learned Magistrate (transcript p.48). On the basis that the defendant's contended construction incorporated a higher standard, it was submitted for the Authority that the negligence of the consignee is criminalised, not the conduct, as was the case in Nomura International PLC (supra). In any event, it was submitted that the defendant has not demonstrated how a different construction of "likely" leads to the affirmation of the Magistrate's decision. This was based on the parties' agreement to the construction of "likely" before the Local Court, that Court's acceptance of that approach, and the absence of any factual finding that the defendant did not meet the reformulated standard. 151 I do not consider that the ground relied upon in the notice of contention to be a valid one. Accordingly, that ground is not available to affirm the Magistrate's decision. I will shortly state the basis for that conclusion. 152 The defendant relied upon a number of authorities referred to in paragraphs [12] to [17] of the Defendant's Outline of Submissions. The test of a high degree of probability but not necessarily probability in excess of 50% as propounded in the Notice of Contention is a test that has been applied in relation to areas of the law that are very different to road transport legislation, eg, Tillman (supra); TSL v Secretary to Department of Justice (2006) 14 VR 109. 153 The test of "likely" in relation to conduct which is "likely to mislead or deceive" has been held to be a "real or not remote chance or a possibility regardless of whether it is less or more than fifty per cent" in trade practices law: Global Sportsman Limited v Mirror Newspapers Limited (1984) 55 ALR 25 at 30. That was the test the parties accepted before the Magistrate in the present proceedings. In those circumstances and in light of my determination of the grounds of appeal favourably to the defendant, it is not necessary to express a final or concluded view upon the correctness of the meaning of the word "likely" in s.58(3)(b) of the Act which the parties accepted for the purpose of the prosecutions below.

ROADS & TRAFFIC AUTHORITY OF NEW SOUTH WALES v GRAINCORP OPERATIONS LIMITED

At a glance

Court

Decision date

Before

Source

Judgment (83 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (19)

Cited By (1)