Stratton v Van Driel Ltd [1998] VSC 75

5. As a result of this incident the appellant, Kenneth Peter Stratton, an inspector appointed under the Occupational Health and Safety Act 1985, on 23 July 1997, laid three informations against Van Driel alleging breaches of the Act. The third charge is not before me and I shall say nothing further about it. The first and second charges were in identical terms:

"On or about 15 September 1995 at the corner of Stud Road and Heatherton Road, Dandenong you were pursuant to s. 47 of the Occupational Health and Safety Act 1985 guilty of an offence against that Act in that being an employer you did fail to provide and maintain so far as was practicable for employees a working environment that was safe and without risks to health when you did fail to provide and maintain plant and systems of work that were so far as was practicable safe and were without risks to health, in contravention of ss.21(1) and 21(2)(a) of Occupational Health and Safety Act 1985."

9. In each case the particulars given by the appellant show that the system of work of which complaint was made was the same, namely, "the system of work for constructing box guttering on a newly constructed roof at the said address". The allegation of unsafe system particularised under the first charge was a non-compliance with paragraph 2.1(c) of the Code of Practice for Safe Working on Roofs approved by the Minister under s. 55(1) of the Act, and that under the second charged was the non-compliance with paragraph 2.1.1(j) of the same code. Each of these paragraphs of the code deals with methods to be adopted to protect against injury through falling.

12. The charges were heard in the Magistrates' Court of Victoria at Dandenong on 23 and 24 February 1998. No transcript of the proceeding was made but the affidavit filed on behalf of the appellant was not challenged as constituting an accurate record of the hearing. Van Driel pleaded not guilty to all charges and counsel for the appellant opened his case and called evidence in support. After the prosecution case had closed, counsel for Van Driel made a no case submission which was upheld by the Magistrate so that all three charges were dismissed. This appeal is brought against the dismissal of the first and second charges only.

15. The questions of law certified by the Master as being raised on this appeal are four in number:

(a) whether the Magistrate incorrectly interpreted and/or applied Section 21(3) of the Occupational Health and Safety Act 1985 when he concluded that the Respondent was not a deemed employer within the meaning of that section; (b) whether the Magistrate incorrectly interpreted and/or applied Section 21(3) of the Occupational Health and Safety Act 1985 when he concluded that although the Respondent had some control, it did not have control within the meaning of that Section; (c) on a submission of no case, did the Magistrate misdirect himself as to the matters to be taken into consideration when deciding whether or not there was a prima facie case to answer; (d) having regard to the whole of the evidence, and in particular to the evidence of

(i) Barrie Baum (see paragraph 24 of the Mr. Costello's Affidavit of 27 March 1998) and/or

(ii) Sidney Garland (paragraphs 32, 37 and 43) and/or

(iii) Peter Signal (paragraphs 69, 70, 75 and 77) and/or

(iv) Neil Sewell (paragraph 107),

whether a Magistrate properly instructed would have ruled that there was no case to answer.

22. These questions involve an examination of s. 21 of the Act which sets out the duties of employers. Sub-section (1) is in these terms:

"(1) An employer shall provide and maintain so far as is practicable for employees a working environment that is safe and without risks to health."

26. Sub-section (2) lists a number of failures by an employee which amount to a contravention of s. 21(1). Although paragraph (a) alone is relevant to the two charges with which this appeal is concerned, others bear upon the construction of the statute and I shall set them out in full:

"(2) Without in any way limiting the generality of sub-section (1), an employer contravenes that sub-section if the employer fails -

(a) to provide and maintain plant and systems of work that are so far as is practicable safe and without risks to health;

(b) to make arrangements for ensuring so far as is practicable safety and absence of risks to health in connexion with the use, handling, storage and transport of plant and substances;

(c) to maintain so far as is practicable any workplace under the control and management of the employer in a condition that is safe and without risks to health;

(d) to provide adequate facilities for the welfare of employees at any workplace under the control and management of the employer; or

(e) to provide such information, instruction, training and supervision to employees as are necessary to enable the employees to perform their work in a manner that is safe and without risks to health."

A contravention of s. 21(1) is an offence against the Act and is an indictable offence: s. 47, but one which may be heard and determined summarily as happened in this case: Magistrates' Court Act 1989 s. 53(1), Schedule 4 Item 53.

34. It will be seen that s. 21 imposes duties upon employers to take steps to protect employees from injury. "Employer" and "employee" are defined in the Act in conventional terms by reference to the contract of employment between them or a contract of training: s. 4. In the present case, however, Mr Baum was an employee, not of Van Driel, but of Signal & Hobbs the independent contractor engaged by Van Driel to carry out the roofing work. Section 21(3) enlarges the scope of the s. 21(1) duty so that it extends for the benefit of an independent contractor of the person upon whom the duty is imposed or an employee of such an independent contractor. This is the provision whose meaning was the subject of this appeal. It is in these terms:

(3) For the purposes of sub-sections (1) and (2) -

(a) `employee' includes an independent contractor engaged by an employer and any employees of the independent contractor; and

(b) the duties of an employer under those sub-sections extend to such an independent contractor, and the independent contractor's employees, in relation to matters over which the employer -

(i) has control; or

(ii) would have had control but for any agreement between the employer and the independent contractor to the contrary."

41. The use of the word "employer" is a little confusing because there is no reason for the purposes of s. 21(3) for the person upon whom the duty is imposed to be the employer of any person in the usual or even the statutory definition of that term. I will take to be the effect of s. 21(3), where it applies, simply to insert for the word "employees" in sub-ss.(1) and (2) of s. 21, the words "independent contractors or employees of an independent contractor" and that the word "employer" there refers to the person who has engaged that independent contractor. But such a person is not fixed with the s. 21(1) duty in all circumstances. The duty exists only in relation to matters over which the person has control or would have had control but for an agreement to the contrary. It was this qualification which caused the Magistrate to dismiss the first and second charges and which is the subject of the present appeal.

44. It is necessary, given the terms of his reasons, to underline what it was that the Magistrate was required to decide when considering the no case submission. He was not called upon to accept or reject the evidence given by the prosecution witnesses; he was not asked to find whether the informant had established beyond reasonable doubt any factual ingredient of the charges; he was not required to consider whether he was or was not satisfied of any fact in the sense of making or not making a finding of that fact; even more so, it being a criminal proceeding, he was not asked to form any view on any matter on the balance of probabilities. His task was to examine the evidence presented and to conclude whether, assuming that the evidence was accepted, a court could, lawfully, convict Van Driel of the charges. If, having done this, he concluded that he could not lawfully convict, he was obliged to accede to the no case submission and dismiss the charges. The question whether, assuming no further evidence were called, the charges were in fact made out is entirely different: May v O'Sullivan [1955] HCA 38; (1955) 92 CLR 654 at 658. As it was put by Kitto J in Zanetti v Hill [1962] HCA 62; (1962) 108 CLR 433 at 442:

"The question whether there is a case to answer, arising as it does at the end of the prosecution's evidence in chief, is simply the question of law whether the defendant could lawfully be convicted on the evidence as it stands, - whether, that is to say, there is with respect to every element of the offence some evidence which, if accepted, would either prove the element directly or enable its existence to be inferred. That is a question to be carefully distinguished from the question of fact for ultimate decision, namely whether every element of the offence is established to the satisfaction of the tribunal of fact beyond reasonable doubt."

48. My use of the word "lawfully" is intended to show that the Magistrate must consider, among other things, what are the legal elements of the offence charged. If the prosecution case involves an interpretation of a statute which the Magistrate does not accept as correct, then a conviction on that basis would not be lawful. Likewise, if, having identified the elements of the offence, there is no evidence to support one of them which is essential for a conviction, the charge should be dismissed at this stage.

51. The only basis upon which the no case submission was put to the Magistrate and the basis upon which he upheld it was that Van Driel did not have control over the roofing work being carried out by Signal & Hobbs so that the extended definition of employee contained in s. 21(3) had no application. In the context of the no case submission, this must mean either that there was no evidence of control or that such control as the evidence showed to exist was not the kind of control envisaged by s. 21(3).

54. The first submission put on behalf of Van Driel was that this was a question of fact so that it was not open to the appellant to raise it on an appeal under s. 92 of the Magistrates' Court Act 1989. A finding that there is no evidence of the fact of control is itself a question of law: May v O'Sullivan [1955] HCA 38; (1955) 92 CLR 654 at 658, as is a conclusion based on the interpretation of the statute. I reject this submission.

57. Before me, there was debate as to the meaning of the expression "matters over which the employer has control" in s.21(3)(b) in the context of Van Driel as the employer. Counsel for Van Driel submitted that roofing work is a specialist activity conducted by experts and that the performance of that work is, naturally enough left to those experts. In this sense, it was not under the control of their client. In particular, the system of work which was referred to in the particulars given of the first and second charges, namely the system of work for constructing box guttering on the newly constructed roof, was a matter of a technical nature over which Signal & Hobbs, and not Van Driel, had control. Although, they conceded, "control" did not mean exclusive control in the sense that no other person shared in it, it was in this case apparent that a general contractor such as Van Driel would not have any effective control over roofing plumber's work. This issue of control, they argued, is determined by the right of a person to exercise it and by reference to the relationship between the employer and the independent contractor. The contrary submission, put on behalf of the appellant, was that "matters" referred to the safety procedures which, according to the evidence, were defective. These procedures, it was put, were under the control of Van Driel as contractor in charge of the site and under the terms of the sub-contract.

60. I approach the task of construing this statute conscious that it is social legislation intended to secure the safety and welfare of persons at work and to protect them against the risks of this: s.6. It should, therefore, be construed generously with this object in mind. Section 21(1), as exemplified in s. 21(2), imposes on employers an extensive duty in relation to the work environment of their employees, including the activities carried on and the things present in that environment. It may be supposed that this duty is imposed upon employers because, traditionally, it is the employer who has the right to control the work practices of its employees; it is the employer which provides plant and machinery for their work; and it is the employer which arranges or provides facilities for storage, handling and transport of plant and other things for use in the workplace. This statutory duty, to some extent, reflects the duty of care imposed by the common law upon employers. See R. v Australian Char Pty Ltd (1995) 79 A.Crim.R. 427 at 442 (Vic FC). In that context, too, the relationship between the employer and the worker at risk which gives rise to the statutory as well as the common law duty is the employment relationship, because control over the worker's working environment is generally exercised or exercisable by the employer. But, within a working environment things and activities which may put a worker at risk of harm may be brought or conducted there by persons with whom the worker has no employment relationship. The scheme of the legislation therefore is to impose different duties upon those persons depending upon their relationship with the likely source of risk: whether it arises from the "conduct of the undertaking": s. 22; from their occupation of the workplace: s. 23; or from the fact that it is they who manufactured or supplied plant for use at the workplace: s. 24. What s. 21(3) seeks to do, where it applies, is to extend the duty imposed by s. 21 upon the employer of the worker at risk to persons who are not employers of the worker. Where it applies, this is achieved by introducing into s. 21(1) the modification created by s. 21(3). Section 21(1) would then read:

"A person engaging an independent contractor shall provide and maintain so far as is practicable for the independent contractor or any employees of the independent contractor a working environment that is safe and without risks to health."

Section 21(3), however, imposes this duty only in relation to matters over which the person has control. The difficult question is to identify what precisely is the nature of this control and what it is over which control must exist in order to attract this extended duty.

65. The word "matters" adopted by parliament to describe the subject matter of the duty has a very wide meaning. It is wide enough to cover any activity or thing in the working environment which might involve risk to the safety and health of a worker. In s. 21(3)(b) any duty imposed by s. 21(1), as exemplified in s. 21(2), is a duty "in relation to" these matters. This conjunctive phrase indicates that the relationship between the duties and the subject matter of the duties is also very wide. Focusing for the moment on paragraph (i) of s. 23(3)(b), the only factor limiting the imposition of the duty is that the matters to which it relates be matters over which the person engaging the independent contractor has control.

68. For the purposes of construing the word "control" I was referred to the Oxford Dictionary where the primary meaning is given as "the fact of controlling, or of checking and directing action; the function or power of directing and regulating; domination, command, sway". I was referred also to cases where the word "control" had been considered, but in circumstances very different from the present. These cases demonstrate, as Gibbs ACJ observed in one of them, that it is a word which will take its meaning from the context in which it is found: Federal Commissioner of Taxation v Australian and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 520. In that case the court was concerned to determine whether certain documents were "in [the bank's] custody or under [its] control". In Botany Fork & Crane Hire Pty Ltd v New Zealand Insurance Co Ltd (1993) 44 FCR 27, the full Federal Court examined the word as part of an exception clause contained in an insurance contract. This clause excluded liability for cover where the damage was to property "in the custody or the control of the insured". It is apparent from these cases and those referred to in them that the word "control" when used in relation to a thing refers to a degree of domination over it. Normally, such a relationship between the person having control and the thing the subject of control will arise from ownership, possession or perhaps contract. Where the subject of control is a person, different considerations may apply. For example, in ordinary speech where a child is said to be under the control of an adult, the speaker is referring to the relationship between the two which may arise from a family or custodial relationship. In a case of undue influence, to speak of a person having control over another suggests a de facto domination. None of these cases was concerned with "control" in the context of the expression "have control over". Moreover, none of these examples quite fits the case before the court where the relationship is between the employer and a "matter" the subject matter of a duty to avoid risk. This matter may be the working environment or a thing or an activity in the working environment which may cause injury or harm.

71. The word "control" is found elsewhere in the Act. It is used in conjunction with the word "management" as part of the expression "management or control of the workplace" in the definition of "occupier" in s. 4 and as part of the expression "workplace under the control and management of the employer" in ss. 21(2)(c) and (d), 21(4)(d) and 31(2)(a)(i). I mention also that the expression "presumed to have control over the activity" is to be found in s. 44(1). It was not suggested in argument that I should draw any inference from the use of the word "control" in these different circumstances and I do not do so.

74. Given the great variety of circumstances in which s. 21(3) may apply, it is neither desirable nor profitable for me to attempt anything like an exhaustive analysis of the word "control" or the expression "have control over" and I do not do so. In the present case, that which is the subject matter of the alleged duty is the manner in which Mr Baum went about his work on the roof without protection from the risk of injury should he fall. The question for determination is in what circumstances, if at all, it might be said that this activity was under the control of Van Driel where no direction was given by Van Driel as to this activity. In such a case, Van Driel would, in ordinary speech, be said to have control over the activity in at least two situations. The first is where it had a legal right to direct that Mr Baum not perform the work in that way. The second is where, notwithstanding that the person has no right to give it, the employer saw it as within its area of authority to give such a direction and, importantly, the worker would accept it and act upon it. It matters not in either situation that other persons might also have control over the same activity.

77. I turn now to s. 21(3)(b)(ii). The difficulty with paragraph (ii) is that it is predicated upon a situation where the person who engages the independent contractor does not have control over the matter in question but would have had that control but for an agreement to the contrary. In what circumstances, then, would this control otherwise have existed? I have concluded that in a case such as this it might exist as some legal right in the employer to direct the independent contractor or its employees in the conduct of the activity or aspects of it or from the acceptance by them of an asserted power to give such a decision. The legal right might arise in different ways, but in a building contract it is most commonly conferred by contract between the employer and the independent contractor. In such a case, there is a logical difficulty in applying paragraph (ii) for it would require at once a contractual right of control and a contractual provision to the contrary. I commence by examining the situation on the assumption that a contrary agreement did not exist. If the contrary agreement is part of the agreement under which the independent contractor is engaged to perform the work, an assumption that such agreement does not exist will remove the independent contractor from the workplace so that the employer is left to perform the independent contractor's work itself. In such a case, it must follow that it would have control over that work. This, in essence, was the position adopted by the appellant. The performance of the roofing work was part of Van Driel's contract with the proprietor. Van Driel could do the work itself, in which case it controlled every aspect of it; alternatively, it could sub-contract the work to Signal & Hobbs as, in fact, it did. If the effect of this sub-contract was to remove the control or the right of control, paragraph (ii) applied; if it did not, Van Driel remained in control so that paragraph (i) applied. Accordingly, the argument of the appellant attached the s. 21(1) duty to Van Driel in either situation.

80. I find myself unable to accept this analysis. Section 21(3)(b) only applies if work is given to an independent contractor, so one must start with that fact. Where the consequence of this is that the employer nevertheless retains control over the activity or thing in question, the s. 21(1) duty attaches to that employer. Where the distribution of functions under the contract of engagement is such that this control is not retained by the employer, it is necessary to ask why this is so. In a building project this may arise from the nature of the sub-contract work. If a contractor lets an air-conditioning contract, for example, to an independent contractor and that independent contractor undertakes the manufacture of the air conditioning plant off-site, I cannot suppose that s. 21(3)(b)(ii) would apply so as to make the employer potentially in breach if, due to some unsafe work practice in the sub-contractor's factory, a worker employed by the independent contractor is injured. The position may be otherwise if the injury was suffered on the building site in the course of the installation of the plant where, under the terms of the sub-contract or the practice of the site or by some rule of law, safety was the responsibility of the contractor.

83. Section 21(3)(b)(ii) is a provision which may have operation in a great variety of working environments and I do not say anything as to its application beyond the circumstances of this case. It is sufficient that I conclude, as I do, that I do not accept the analysis proffered by the appellant. Since it was not suggested by either party that paragraph (ii) had any other application to this case I shall put it to one side. The sole issue, then, is whether there was before the Magistrate evidence which could support a finding that Van Driel had control over the matters in the working environment in relation to which the breach of s. 21(1) is alleged. These matters, the evidence showed, were the performance of work on the roof by Mr Baum in circumstances where he was without a safety mesh or harness or any other protective device contemplated by cl. 2.1(c) or cl. 2.1.1(j) of the Code of Practice.

86. It was submitted on behalf of the applicant that this control was given or reserved to Van Driel under the terms of the sub-contract between it and Signal & Hobbs. The immediate difficulty is that the document in evidence as constituting the subcontract is incomplete. Significantly, it does not include any details which may be found in the Preliminaries section of the specification regarding site safety, if it exists, or the printed clauses of the SC6 form of agreement such as cl. 21 which may also deal with this matter. The Magistrate, however, was obliged to deal with the evidence which had been placed before him and his decision must be evaluated on that basis. The nature of Signal & Hobbs' work is set out in the first schedule to the sub-contract. It describes this as:

"All labour, materials, plant and equipment necessary to carry out the supply, delivery and installation of metal roofing, mesh, insulation, gutter, gutter board, sumps, flashings, penetrations, flashings, overflows and including perimeter protection and mobile scaffold all in accordance with the drawings and specification issued for the project by the Architect."

90. Of particular significance for present purposes is the inclusion of the perimeter protection. Clause 3A(d) obliges Signal & Hobbs to provide all tools, implements and plant as are necessary for the performance of its work. Special condition 2 obliges Signal & Hobbs to issue to Van Driel before work is started on site "a description of intended method for safe system of working". It may be supposed that the intent of this requirement was to give to Van Driel the opportunity to assess the intended work method and to make suggestions as to its improvement. This condition was complied with in that Signal & Hobbs provided Van Driel with a letter dated 6 September 1995 and another in similar terms dated 15 September 1995 setting out the safety measures to be taken and stating that the Code of Practice would be complied with. Clause 3A(a)(ii) requires Signal & Hobbs to comply with any applicable Act of Parliament which would, of course, include the Occupational Health and Safety Act 1985. Clause 3A(c) obliges Signal & Hobbs to carry out the work as directed from time to time as directed by Van Driel. It would seem, therefore, that a non-compliance by Signal & Hobbs with the safety measures set out in its letters given under special condition 2 could constitute the reason for a direction. Finally, it would be open to Van Driel to insist on compliance with the safety requirements of the Act.

93. Furthermore, witnesses called by the informant who were variously employees of Signal & Hobbs and Van Driel gave evidence of the relationship which in fact existed between the Van Driel employees and the Signal & Hobbs' employees with respect to safety aspects of the latter's work. Mr Baum said that he would have complied if he had been asked to stop work for safety reasons by Van Driel or by his employer or by the union representative or by a departmental representative. Sidney Garland, Signal & Hobbs' leading hand on the site said he was responsible to Paul Barnes, Signal & Hobbs' supervisor, and to Neil James Sewell, Van Driel's general foreman on the site. He said also that, if he received an instruction from Mr Sewell he would contact Mr Barnes but that he would, in any event, comply with it, leaving Mr Barnes and Mr Sewell to sort out the consequences. Peter John Signal, a director of Signal & Hobbs gave evidence which included the statement that, the manner of performance of its contract was generally left to the roofing contractor, but that "if there was something odd" Van Driel would give an instruction to do the job properly or in accordance with the regulations. This evidence was not necessarily related to safety matters but, in its context, it was open to the Magistrate to understand it as extending to them. Finally, Mr Sewell said that, if he saw unsafe work practices on site, he saw as being part of his role to give a verbal warning or a written warning, presumably to the effect that the subcontractor should desist from these practices.

96. I repeat that it is not the function of the court upon a no case submission to accept or reject this evidence. The no case submission must be rejected if the Magistrate has evidence which is capable of showing that Van Driel had control over the relevant safety aspects of Signal & Hobbs' performance of its subcontract work. There was evidence of this kind before him. The Magistrate was, therefore, in error in dismissing the charges.

99. The appeal will, therefore, be allowed and the orders of the Magistrate set aside. What, then, is to happen to the informations? On behalf of the appellant it was submitted that I should remit the charges to the Magistrates' Court so that they may be heard de novo. This course was urged because, it was said, the Magistrate would have difficulty in recalling the evidence given. I will not adopt this course. The informant has led his evidence and closed his case. The Magistrate presumably has his own notes and, in any event, there is a record of the proceeding contained in the affidavits which were filed in this court. The proceeding must therefore move forward from the point at which it stopped when this appeal was brought as counsel for Van Driel submitted. Counsel for Van Driel went further. They submitted that the case should be remitted to the Magistrate to enable them to make to the Magistrate a further no case submission to the effect that there was no evidence that Van Driel had failed to comply "so far as is practicable" with its safety obligations, so that no breach of section 21(1) or 21(2)(a) had been shown. This course, likewise, I shall not endorse. A defendant facing a criminal charge has the opportunity to make a no case submission. I am aware of no authority or practice which would permit it to make a second, particularly after an appeal has been brought arising out of the result of the first submission. The proper course to my mind is for the Magistrate to take up the hearing on the basis that he has rejected the no case submission made on behalf of Van Driel.

1. The appeal be allowed and the orders of the Magistrates' Court of Victoria sitting at Dandenong made on 24 February 1998 dismissing the first and second charges contained in the information and summons filed on 23 July 1997 be set aside.

2. These two charges be remitted to the Magistrates' Court for the hearing to be completed and the charges to be determined according to law.

3. The respondent pay the costs of the appellant of the appeal.

4. Certificate under s. 13 of the Appeals Costs Act.