SafeWork NSW v Paul Whitmarsh (No.2)

Representation: Counsel:
Mr M Cahill (Prosecutor)
Mr I Latham (Defendant)
Solicitors:
Department of Customer Service (Prosecutor)
Wotton Kearney (Defendant)

File Number(s): 2023/27880

Publication restriction: Nil

JUDGMENT

Background

1. On 27 January 2021 AWB Contractors Pty Ltd (AWB) was attempting to lift a steel yacht for the purpose of salvage and disposal. During that process the crane lift failed when the mast of the yacht broke. One of the workers, Mr Haywood, was struck in the head by the mast, and suffered fatal injuries.

2. AWB was charged by the prosecutor SafeWork NSW (SafeWork) with a breach of its health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (NSW) (the WHS Act). Mr Whitmarsh was separately charged by SafeWork under s 27 of the WHS Act, the allegation being that he failed to exercise due diligence to ensure that AWB complied with its health and safety duty, and the failure to comply with the duty exposed workers to a risk of death or serious injury contrary to s 32 of the WHS Act.

3. AWB pleaded guilty and is yet to be sentenced.

4. Mr Whitmarsh pleaded not guilty. His trial is due to commence before me on 31 March 2025.

5. In preparation of the prosecution case, SafeWork has advised the defendant of the documents which it proposes to tender. Some of those documents have been obtained during the investigation of the incident by SafeWork, pursuant to coercive powers. SafeWork wishes to tender some of those documents at the hearing of the trial of Mr Whitmarsh. Mr Whitmarsh has indicated that he will object to the tender of some of the documents. SafeWork requested to be advised of the basis of the objection, and Mr Whitmarsh, as is his right, declined to give advance notice of the objections.

6. With a view to proving that the documents which SafeWork does hold are business records (which may facilitate their tender into evidence at the trial) SafeWork has issued two subpoenas, one to AWB and one to an associated company Australian Wharf and Bridge Pty Ltd (Australian Wharf).

7. Mr Whitmarsh has a privilege against self-incrimination. The two companies which are the subject of the subpoena have no privilege against self-incrimination. The question to be decided is whether Mr Whitmarsh can rely upon his individual privilege against self-incrimination to prevent him being required to search for the documents which are the subject of each subpoena (MFI 1, para 4).

The subpoenas

8. Both subpoenas are in identical form. Each requires the company to produce 44 documents. The documents are not described by category. The Schedule to each subpoena lists each document by reference to its title. For example, document 9 is “AWB SWMS 7-Safe Crane Operations.” Most of the documents in the Schedule are SafeWork Method Statements. A small number of the documents are minutes of toolbox talks. As previously recited, SafeWork already has copies of each of the 44 documents, but has issued these subpoenas to assist in proof of the provenance of each document.

9. I will consider each company separately, as AWB is in liquidation, whereas Australian Wharf is an existing company of which Mr Whitmarsh is the sole director (DX 1).

AWB Contractors Pty Ltd (in liquidation)

10. Mr Whitmarsh, as the sole director of AWB, placed the company into voluntary administration in October 2024. AWB is now in liquidation and is subject to the control of two liquidators. Its name has been changed to ACN 102 299 409 Pty Ltd. I will continue to refer to the company as AWB. Mr Crispino and Mr Albarran were appointed as liquidators on 29 November 2024 pursuant to a creditors voluntary winding up (PX 1, Tab 4).

11. The argument that the sole director of a one-person company cannot be compelled to search for and produce company documents, as this would infringe his individual privilege against self-incrimination, has no application to the subpoena to AWB.

12. Upon a company being wound up and the appointment of a liquidator, the directors lose their power to manage the company, but not their office as director: Gooley et al*, Corporations and Associations Law, Lexus Nexus 7**th* Edition para 30.49.

13. Section 474(1) of the Corporations Act 2001 (Cth) provides that if a company is being wound up in insolvency, the liquidator must take into his or her custody, or under his or her control, all the property which is, or which appears to be, property of the company.

14. The property of the company includes all books and records of the company. Thus, the documents described in the Schedule to the AWB subpoena are part of the property of the company which the liquidators must get in and deal with. Mr Whitmarsh has no right to or control over such documents. Section 483(1) of the Corporations Act 2001 (Cth) gives the Supreme Court and the Federal Court power to order an officer or employee of a company to deliver property of the company or books and records of the company to the liquidator.

15. On the hearing of this application Mr Latham, counsel for Mr Whitmarsh, said that he also had instructions from, and acted for, the liquidators of AWB.

16. The principles concerning whether or not the sole director of a one-person company can be required to search for documents to answer a subpoena issued to his or her company is dealt with below. That issue does not arise in respect of AWB, because the liquidators have, or are entitled to, possession of the books and records of AWB. The liquidators are the parties affected by the subpoena in that they must ensure that AWB complies with the subpoena. No question arises concerning Mr Whitmarsh being required to search for documents that might incriminate him.

17. During oral submissions, Mr Latham submitted that the liquidator could not search for and find the documents without the assistance of Mr Whitmarsh. There was no evidence to that effect. In any event, production of these documents does not call for an exercise of judgement, such as would be required to ascertain whether company documents fell into broad categories. The subpoena is very particular, and any person could search for and find these documents without the assistance of Mr Whitmarsh. As previously recited, the documents required by the subpoena are described with precision and could readily be identified by the liquidators, or their staff, by matching the title of each document against the list of 44 documents in the Schedule to the subpoena.

18. For these reasons, the issue raised by Mr Whitmarsh in respect of the AWB subpoena does not arise. AWB is obliged to produce the documents called for by the subpoena.

Australian Wharf and Bridge Pty Ltd

19. The evidence establishes that Mr Whitmarsh is the sole director, secretary and sole shareholder for Australian Wharf. The evidence also establishes that the company does not employ any persons, and has not employed any persons since 2003 (DX 1, para 6). The evidence put forward by SafeWork (PX 2) to suggest that somehow the company is still in operation is unconvincing. I will proceed on the basis that what is asserted on behalf of Mr Whitmarsh about Australian Wharf is correct.

20. Australian Wharf has no privilege against self-incrimination. Mr Whitmarsh has a personal privilege against self-incrimination.

21. Mr Latham indicated that the proposition for Mr Whitmarsh is that he should not be required to search for or produce the documents the subject of the subpoena. It was common ground that the content of the documents is largely irrelevant to the present application. There is no decision to be made as to whether it is possible that one or more of the documents might tend to incriminate Mr Whitmarsh. The proposition advanced for Mr Whitmarsh is much wider – that he should not be required to search for or produce the documents to the court. Mr Latham submitted that a company can only produce documents to the court through the actions of a natural person. The submission was that in this case, that can only be Mr Whitmarsh.

22. I reject that submission. The director of a company has full power to engage another person to carry out a task required of the company, or to delegate any of his or her obligations to another person. For example, on the present application Mr Whitmarsh’s solicitor swore an Affidavit (PX 1). In par 3 of the Affidavit the solicitor said: “I make this Affidavit by the authority of the defendant.” This relieved Mr Whitmarsh of the burden of swearing an Affidavit which might subject him to cross-examination and was a perfectly proper course to take. Nevertheless, it is a demonstration that Mr Whitmarsh does not always have to carry out tasks by himself and can, in his own interest, delegate those tasks to others: Re City Equitable Fire Insurance Co Ltd [1925] Ch 407; AWA Ltd v Daniels (1992) 7 ACSR 759.

23. The authorities recognise that to require a sole director to search for and produce documents to a court on behalf of a company might abrogate the director’s privilege against self-incrimination. However, those authorities also say that the sole director can delegate that task to someone else. Mr Latham submitted that Mr Whitmarsh was the only person who could search for and find the documents which are the subject of the subpoena to Australian Wharf.

24. I reject that submission. If the documents had been described in categories, then there may have been a need for some person with knowledge of the documents to exercise judgement or expertise in discerning which documents fell into the categories described in the subpoena. However, when the documents are described by reference to a title of a document, and in some cases the date of a document, it is not an onerous task for anyone appointed by Mr Whitmarsh to identify the documents and produce them to the court. For example, the company documents in their entirety could be given to the solicitor for Mr Whitmarsh, or to an independently appointed solicitor for the company, and that person could then locate the documents described in the subpoena and produce them to the court. This would not involve Mr Whitmarsh in any way in searching for the documents.

25. The alternative, suggested in the authorities, is for a receiver to be appointed for the limited task of locating and producing the documents pursuant to the subpoena.

26. The reality is that the documents the subject of both subpoenas have been located and placed in a folder which was in court. There is no evidence as to who located the documents. They are produced to the court by Australian Wharf and not by Mr Whitmarsh. The court did not ask who had collated the documents and placed them in the folder. Counsel for SafeWork gave an undertaking not to make that enquiry.

27. Mr Latham relied upon the decision of the Full Court of the Federal Court of Australia in Meneses v Directed Electronics Pty Ltd [2019] FCAFC 190 (Meneses). Mr Latham submitted that the Full Court had held that it was not open to order an individual who is himself or herself at risk of prosecution, or the institution of proceedings for a civil penalty, to produce documents on behalf of a company (MFI 1, para 5). Reference was made to para [152] of that decision.

28. The appeal in Meneses concerned the order of a single Judge who had ordered a company to produce documents, but who had also ordered Mr Meneses personally to produce the company documents. The Full Court said that in considering whether to order production against the company, the correct inquiry was “to determine whether that company had control of the relevant documents” – [150]. In this case there was no dispute that Australian Wharf had control of the relevant documents.

29. It is correct, as submitted by Mr Latham, that in para [152] of the decision, the Full Court said:

“…we do not consider it open to order an individual who is himself or herself at risk of prosecution or the institution of proceedings for a civil penalty to produce the relevant documents on behalf of a company. This would require that individual to undertake an act of self-incrimination or self-exposure to penalties.”

30. However, the Full Court in [153] said:

“That is not to say that an order for production cannot be made against OE Solutions (assuming that there are relevant documents in its control). The privilege against self-incrimination and the penalty privilege are available only to natural persons and not to corporations.”

31. Further, in [153] the Full Court said:

“OE Solutions cannot resist production on the basis that production of documents by the company would expose Mr Meneses to a real and appreciable risk of prosecution or institution of proceedings for a civil penalty.”

32. The Full Court said that it was necessary to consider mechanisms by which OE Solutions could produce the documents, other than by Mr Meneses doing so on its behalf. Such mechanisms would include the appointment of a receiver of the company. The Full Court said:

“It is important and necessary that such a mechanism exist; otherwise, a one-person company such as OE Solutions would be effectively immune from producing documents in its control not withstanding that it is not entitled to claim the privilege against self-incrimination or the penalty privilege.”

33. In the end result the Full Court set aside the order for production made personally against Mr Meneses. The Full Court did not disturb the order for production of documents made against OE Solutions, which it found was a one-person company.

34. To similar effect, and binding upon this court, is the decision of the Court of Criminal Appeal in R v Ronen [2004] NSWCCA 67. Spigelman CJ said at [67] that a court should not make an order which has the effect that an accused against whom an Indictment has been presented must do something calculated to assist the preparation or presentation of the Crown case. However, on the facts in Ronen, it was not necessary for his Honour to express a concluded view.

35. Mason P pointed out at [97] that there was no evidence to suggest that any officer of the company would make “a testimonial self-incrimination by collecting and producing the documents and/or informing the court about searches and enquiries made”. That is the position in the present case as well.

36. Mason P dealt with one-person companies at [109]. His Honour said that a director could appoint a proper officer to cause the subpoena to be answered and this step would involve no incriminatory admission. All it would show would be that a director of the corporation was ensuring that the corporation itself obeyed its legal obligations.

37. Mason P said at [112] that to guard against a director of a one-person company risking self-incrimination, the corporation could take steps to comply with the subpoena by appointing a receiver or some other proper officer with nothing to fear by way of self-incrimination.

38. Kirby J at [116] agreed with the reasons given by Spigelman CJ and Mason P.

39. As previously recited, there is no evidence in the present case as to who has searched for the documents which are in a folder which was produced in Court. In particular, there is no evidence that Mr Whitmarsh searched for the documents in answer to the subpoena to Australian Wharf. In those circumstances, the company produces the documents to the court and there is nothing to suggest that Mr Whitmarsh had an involvement one way or the other in searching for the documents to be produced by Australian Wharf.

40. The reasoning set out above in relation to Australian Wharf also applies to the subpoena issued to AWB, even if the conclusions expressed above concerning production being by the liquidators rather than by Mr Whitmarsh, are found to be wrong.

Conclusion and Orders

41. For the reasons set out above, both AWB and Australian Wharf must produce the documents to the court. There is no evidence that any search for the documents, or the production of the documents, has any impact upon Mr Whitmarsh’s privilege against self-incrimination, which he retains intact.

42. The order of the Court is:

43. Order that AWB Contractors Pty Ltd and Australian Wharf and Bridge Pty Ltd produce to the Court the documents listed in the subpoenas issued to each company.

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