In essence, the Full Bench decided that although leave to appeal was required and there was no right to call additional evidence in a de novo hearing, circumstances had been established that warranted allowing fresh evidence and in particular, fresh evidence as to the appellant's state of mind at the time of the offence. Shortly before the relisting of the appeal to hear this fresh evidence, the appellant's legal representative notified the Court that a psychologist's report that had been filed would not now be relied upon by the appellant. Fresh evidence had been allowed that did little more than update evidence given before his Honour, especially as to the present circumstances of the appellant.
MERIT CONSIDERATIONS ON APPEAL
20 It has been noted earlier that both the appellant and the respondent approached this appeal on the basis that his Honour, Industrial Magistrate Reece, had undertaken the sentencing exercise in the mistaken belief that the maximum penalty for this offence (and the jurisdictional maximum able to be imposed by the Local Court) was $55,000 when, in fact, the maximum penalty was $22,000. While conceding this position, the respondent nevertheless argued that the penalty imposed was reasonable in all the circumstances of the case and was not vitiated by his Honour's misunderstanding.
21 In the course of the preparation of reasons for decision and considering the legislative provisions raised in the appeal, it became evident that the parties may have proceeded upon a misunderstanding of those statutory provisions. Having regard to that possibility, the Registrar of the Court wrote to the parties requesting written submissions in relation to the following questions:
1. Is it the case that the maximum penalty prescribed by s 155 of the Workers Compensation Act 1987 for an offence against that section is 500 penalty units (or $55,000, having regard to s 17 of the Crimes (Sentencing Procedure) Act 1999)?
2. Is the effect of s 245(2) of the Workplace Injury Management and Workers Compensation Act 1998 to impose a cap on the penalty imposed by the Local Court in the present matter of 200 penalty units (or $22,000)?
3. If the answer to both questions 1 and 2 is "yes", does the principle in U-Rect-It Pty Ltd v WorkCover Authority of New South Wales (Inspector de Silva) [2004] NSWIRComm 266 (see also R v Doan (2000) 50 NSWLR 115 ) require the Industrial Magistrate when assessing penalty to have regard to the maximum penalty fixed by s 155 of the Workers Compensation Act 1987 rather than the jurisdictional limit imposed by s 245(2) of the Workplace Injury Management and Workers Compensation Act 1998 (provided that the limit is not exceeded)?
22 The effect of the written responses received to the Registrar's letter was that, unlike the stance taken during the entirety of the appeal hearing, both the appellant and the respondent now accepted that the answers to all three questions was "yes" and that the maximum penalty for this offence was $55,000, while the jurisdictional limit imposed upon his Honour the Industrial Magistrate was $22,000 at the time of dealing with this offence. While accepting this position, the appellant argued that his Honour had been misinformed on a number of matters (although ultimately corrected in relation to some of them) including the jurisdictional limit and, when his Honour expressed the view that the maximum penalty was likely to be the same as the jurisdictional limit, that misapprehension was not corrected by the respondent in circumstances where the appellant was representing himself without legal assistance. The appellant submitted that his Honour had then undertaken the sentencing task without a clear understanding as to the statutory provisions and the process was thereby tainted. In addition, the subjective circumstances warranted a reduction in the penalty imposed. Written submissions for the respondent conceded the confusion about the issues raised by his Honour but argued that the penalty had been approached on the basis that the maximum was $55,000 and thus there was no error of relevance: the only error related to the jurisdictional limit and that error had no operative effect on the sentencing process since the penalty imposed of $5,000 did not exceed the jurisdictional limit.
23 The decision of the Full Bench in U-Rect-It accepted that the proper construction of the Occupational Health and Safety Act 2000 in s 105(2) was that the maximum penalty that could be imposed in the Local Court of $55,000 was a jurisdictional limit applicable in that Court, but that the maximum penalty for any particular offence would be as set out by the Act: In that case, a breach of s 8(1) would result in the maximum penalty of $550,000 for a first offender or $825,000 for a subsequent offender. Adopting the approach of the Court of Criminal Appeal in Doan, the Full Bench held that when a prosecution under the Act was dealt with by the Local Court, the effect of the jurisdictional limit was to restrain the Local Court to that amount in imposing a penalty and that it was wrong for the Local Court to regard the $55,000 limitation as being reserved for the worst class of case. The Court of Criminal Appeal in Doan accepted that this was a question of construction and that is the approach adopted by the Full Bench in U-Rect-It. The structure of s 155 of the Workers Compensation Act 1987 and s 245(2) of the Workplace Injury Management and Workers Compensation Act 1998 do not require a different construction nor was any such approach argued for by either the appellant or the respondent.
24 The appellant had essentially approached this case on the basis that there had been an error by his Honour the Industrial Magistrate treating the offence as carrying a maximum penalty of $55,000 when, in fact, the maximum penalty was $22,000. That point was conceded by the respondent to the appeal (although both now accept that not to be the case) and the appellant proceeded on the basis that the identified error required the Court itself to undertake the sentencing task working on the basis that the maximum penalty for the offence was $22,000. The appellant argued that the subjective factors were such that the penalty of $5,000 imposed by his Honour was excessive and that some lower figure should be imposed on appeal if the appellant's application under s 10 of the Sentencing Act was not successful.
25 Having regard to the concessions now made by the appellant and respondent, an issue on appeal is whether anything turns upon the fact that his Honour was correct in proceeding on the basis that $55,000 was the maximum penalty for the offence although mistaking the jurisdictional limit on his Court of $22,000 by regarding the jurisdictional limit as the same as the statutory maximum for the offence.
26 In Doan, the Court of Criminal Appeal canvassed a number of decisions in relation to similar provisions and concluded that, despite the legislative context in which each decision was made, a clear approach as a matter of principle could be seen to emerge from those cases. In particular, references made to the Queensland decision of R v Doyle (1987) 30 ACrimR 1 where Shepherdson J (without dissent from the other members of the Court) stated:
A Magistrate, in deciding whether to deal with a housebreaking or similar offence under s 443(eb) should look at the spectrum of sentences up to the maximum term for the particular offence and if he elects to deal with the case summarily he may impose a penalty within that range taking care not to exceed the maximum term prescribed by s 443, namely imprisonment with hard labour for two years.
27 To similar effect was the South Australian case of Canimo v Venning (1993) 113 FLR 327 at 330 where Perry J observed:
It is true that in the case of a ceiling on the maximum sentence which may be imposed on a Court exercising summary jurisdiction, the Court should first look at the maximum sentence imposed by the relevant statute, and work to that. If a penalty is arrived at by that process beyond the jurisdictional maximum, the jurisdictional maximum will confine the penalty to be imposed.
In a similar vein in Victoria, Brooking J (with the agreement of Hampel and Smith JJ) in Hansford v His Honour Judge Neesham [1995] 2 VR 233 at 237 said:
I think it is absurd to suggest that the statutory maximum for an offence is irrelevant to the determination by a Magistrate of the appropriate sentence.
28 Having considered the effect of those decisions, Grove J in Doan then stated:
[35] The result of true construction of statutory provisions in New South Wales is that, what has been prescribed is a jurisdictional maximum and not a maximum penalty for any offence triable within that jurisdiction. In other words, where the maximum applicable penalty is lower because the charge has been prosecuted within the limited summary jurisdiction of the Local Court, that Court should impose a penalty reflecting the objective seriousness of the offence, tempered if appropriate by subjective circumstances, taking care only not to exceed the maximum jurisdictional limits.
29 In the present appeal, the respondent is correct to draw attention to the fact that his Honour the Industrial Magistrate was aware of the maximum penalty for the offence but submits that his error as to the jurisdictional limitation is irrelevant because the ultimate fine did not exceed $22,000. We do not think this matter can be dismissed so simply. Many judgments of the supervisory courts, including the High Court, have commented on the complexity of the sentencing task and the care to be exercised by a court in weighing numerous factors that frequently point the court in different directions. In the public debate that often takes place in the media concerning particular sentencing judgments, the complexity of the task is rarely, if ever, acknowledged or, seemingly, understood. A person found guilty of a criminal offence is always entitled to have the law applied, including the law in relation to sentencing principles. Confidence in the legal system is a two way-street: a defendant is entitled to expect the adoption of correct procedures and a consideration of all the relevant law, not just some of it. Applying the approach in Doan required his Honour to consider a sentence in the context of the statutory maximum for the offence, the jurisdictional limitation on penalties operating in the Local Court, the penalty that would reflect the objective seriousness of the offence tempered by relevant subjective circumstances (if any) and finally, imposing a penalty that would not exceed the maximum jurisdictional limit. We are unable to conclude that this was the task undertaken by his Honour the Industrial Magistrate in this case. In having considered only part of the process (as a result of confusion in the prosecutor's camp continued during the course of this appeal) it cannot be said with any confidence that his Honour must have considered the remaining elements of the task simply because the penalty imposed was below both the maximum statutory limit and the jurisdictional limit. The law and the processes of sentencing are not properly observed and justice not achieved by a result which, by happenstance, appears to fall within what might have been done properly in any event.
30 Having regard to this error, the intervention of the Court is attracted and it falls to the Full Bench to re-sentence the appellant and to exercise its own sentencing discretion. It is also to be remembered that the appellant ultimately pursued the appeal on the basis of the severity of the penalty imposed by his Honour the Industrial Magistrate. Having regard to the penalty of $1,000 imposed on the company for a breach of the same provision for a prior period to that nominated in the Particulars of the present breach, the fact that the period is nearly twice as long in its non-compliance as that of the appellant and the subjective factors identified with more clarity on appeal where the appellant was legally represented, the Court concludes that the penalty was manifestly excessive in all the circumstances. (Dinsdale v The Queen (2000) 202 CLR 321 at 325).
31 In sentencing the appellant anew, a number of matters require consideration. Having regard to the evidence called in the Local Court and the additional evidence allowed on appeal, it remains clear that at the time of this offence over a period of September 1998 to June 2000, the appellant was aware that the workers compensation premiums were to be paid, that the company was employing persons and that there was an obligation to ensure that workers were covered. Besides being aware of the obligation and its obvious workplace and social purpose, there is no evidence of the appellant seeking the assistance of the company bookkeeper or the persons responsible for the accounts of the business, in persuading his father that the payments had to be made. Ultimately, the assessment must be made that he was a person educated to tertiary level and despite his youth and lack of business experience, was fully aware of the obligation to pay the workers compensation premiums. It is something of a novel proposition that the seriousness of breaching the law can be in some way excused because of the domineering control exercised by his father. Nevertheless, his Honour accepted the evidence called by the appellant in relation to the domineering nature of his father. As a consideration going to penalty, this Court also accepts that evidence but it is evidence that has limited influence in setting an appropriate penalty.
32 A further issue debated on appeal was the effect of his Honour's statement that although he accepted that the appellant's father was domineering and a controlling influence in the business, that evidence was not factually accepted as the reason for non payment of the premiums nor was the defence made out. His Honour noted that the inconsistent answers given in two Records of Interview where the domineering nature of his father was not raised, reflected adversely on his credit. It is not entirely clear what his Honour decided when dealing with these aspects of the case. It is clear that his Honour accepted that the appellant was a person of good character with no prior convictions and who had since operated a company in an appropriate manner and that his father was an overbearing person who meddled in the affairs of the subject company. His Honour then clearly rejects the submission that the statutory defence was made out but it is not so clear as to whether his Honour concluded that it was only the statutory defence to which these comments were being directed or whether he was concluding both that the statutory defence was not made out and that he did not believe the appellant's evidence as to the reason why the premiums were not paid. Ultimately, this issue is not of great moment in light of the fact that the sentencing discretion will have to be exercised afresh by this Court on appeal. It is sufficient for that purpose to note that his Honour concluded that the statutory defence had not been made and that there were issues of credit that arose because of the appellant's failure to raise the direction and domineering nature of his father in the two interviews with the WorkCover Inspectors. Those matters are taken into account in assessing, afresh, an appropriate penalty.
33 As noted earlier, there is evidence that the appellant has continued in business after this offence, has obeyed the law in relation to the payment of workers compensation premiums and the business obligations associated with the running of a business and has come to terms with the error that he made (as he submitted) in giving in to his father's pressure. Indeed, his Honour concluded that the appellant was unlikely to offend in his way again - a conclusion in which the Court would concur. He continues to be active in community affairs and is obviously highly regarded by a wide variety of people with whom he has come into contact. There seems to be a suggestion in this material that his ambitions to run for public office at a Local Government or State Parliamentary level may be removed by a conviction but there is no evidence to support such a conclusion. Undoubtedly, a conviction may weigh in the public mind when they come to exercise the franchise but as recent events disclose, political figures may find themselves in breach of the law in circumstances which they have to explain to their constituency and which that constituency will have a valid interest in weighing. That consideration urged on behalf of the appellant therefore bears little on the setting of an appropriate penalty.
34 The principle of general deterrence has a role to play in setting an appropriate penalty and indeed it is of concern that from time to time proceedings are brought in the Local Court and sometimes arise for consideration on appeal in this Court involving the failure to pay workers compensation premiums. There is no indication given by the respondent prosecutor as to how widespread is this offence but that does not detract from the necessity to take into account general deterrence in setting a penalty in this case. In relation to specific deterrence, given the evidence as to the appellant's behaviour since this offence and the conclusion that he is unlikely to offend again in this way, there is a more limited role for the operation of that principle but nevertheless there is some, relatively minor, role for that consideration.
35 Bearing in mind the considerable evidence as to the good citizenship of the appellant, the high regard with which he is held in his community and more generally, the fact that he has no prior convictions, the circumstances in which he became the sole director of this business and the overbearing influence of his father in this particular offence, it may be said that there are significant subjective factors to be taken into account: these considerations cannot, however, be elevated above the objective seriousness of the offence. In addition, the sparse information supplied to the Court as to the financial circumstances of the appellant nevertheless suggest that he is of limited means and living under circumstances of financial restraint. It is of some significance that the company was fined $1,000 for a failure to pay workers compensation premiums over a period of nearly 4 years, whereas this offence covers a different period of under two years. Bearing those matters in mind it is appropriate that a penalty of $2,250 be substituted in this case.
36 There has been some discussion on appeal as to the appropriateness of the Court exercising its discretion under s 10 of the Sentencing Act not to record a conviction in this matter. Some of that debate revolved around whether or not it is appropriate for offences against workers compensation legislation to be regarded as so closely connected with occupational health and safety legislation that this Court's cautious approach to the circumstances in which the s 10 discretion should be exercised, should be extended to this category of offence (see Llandilo Staircases Pty Ltd v WorkCover Authority (Inspector Parsons (2002) 104 IR 204). However, the appellant ultimately pursued his appeal in the light of the principles stated in Llandilo.
37 Amongst the matters to be considered by the Court in considering an application under s 10 of the Sentencing Act is the person's character, antecedents, age, heath and mental condition, the trivial nature of the offence, the extenuating circumstances in which the offence was committed and any other matter that the Court thinks proper to consider. In Thornlowe v Filipokski (2001) 52 NSWLR 60, the Court of Criminal Appeal was dealing with an application under s 10 of the Sentencing Act arising from a prosecution concerning serious pollution contrary to the provisions of the Marine Pollution Act 1987. In that case, Chief Justice Spigelman noted that the discretion conferred by s 10 was wide ranging and that there was no warrant for treating the scope and range of matters which were proper for a sentencing judge to take into account in a narrow way but, nevertheless, it was a discretion that was to be exercised judicially. His Honour also noted that in relation to environmental offences and under Occupational Health and Safety legislation it had been often stated that it would be a rare case when dismissal under the equivalent of s 10 of the Sentencing Act was seen as appropriate (in particular see Hunter Water Board v State Rail Authority of New South Wales (No 2) (1992) 75 LGREA 22 at 23). That approach
has more recently been emphasised by a Full Bench of this Court in Inspector Maddaford v Graham Gerard Coleman and anor (2004) 131 IR 21.
38 In the present case it cannot be said that the offence is trivial. While the appellant's antecedents are generally favourable, he understood fully his obligations under the law in relation to an important matter concerning the company's workforce and allowed himself to be dictated to by the strength of his father's wishes, rather than ensuring that this important piece of legislation was complied with. While the relationship with his father gives some understanding as to how this offence came to be committed, it does not, of itself, provide the basis for the exercise of the discretion available under s 10 of the Sentencing Act: indeed, the evidence showed that for a period after his father's death, the required workers compensation premiums were not paid nor was there any evidence of the appellant securing the support of other business professionals engaged by the company to impress upon the appellant's father the requirements of the law. These circumstances do not amount to extenuating circumstances, nor do they otherwise provide a basis that would warrant the exercise of the discretion. The appellant's application pursuant to the provisions of s 10 of the Sentencing Act must therefore be rejected.