WorkCover Authority of New South Wales (Inspector Maltby) v Josef & Sons Contracting Pty Limited

CITATION : WorkCover Authority of New South Wales (Inspector Maltby) v Josef & Sons Contracting Pty Limited (In liquidation) & Ors [2002] NSWIRComm 226 PROSECUTOR: WorkCover Authority of New South Wales (Inspector Maltby)

PARTIES : DEFENDANT: Josef & Sons Contracting Pty Limited (In Liquidation) (ACN 002 844 537)

FILE NUMBER: IRC 5440, 5441, 5442, 5443, 5444, 5445, 5446, 5447 of 2002 CORAM: Schmidt J Occupational Health and Safety - prosecutions under sections 16(1) and 15(1) of the Occupational Health & Safety Act 1983 - company in voluntary liquidation

Practice and Procedure - orders sought pursuant to section 4 of the Supreme Court (Summary Jurisdiction) Act 1967 - question whether leave required from the Supreme Court to commence criminal proceedings - no leave required

CATCHWORDS : Statutory Interpretation - construction of s471B and s500 of the Corporations Act 2001 (Cth)

Companies Act 1962-1966 Companies Act (1862) UK Corporate Law Reform Act 1992 Corporations Act 2001 (Cth) LEGISLATION CITED : Industrial Relations Act 1996 Limitation Act 1969 (NSW) Liquor Licensing Act 1985 Occupational Health and Safety Act 1983 Road Maintenance (Contribution) Act 1963 Supreme Court (Summary Jurisdiction) Act 1967 Avondale Motors (Parts) Pty Ltd v FCT (1971) 45 ALJR 280 Bradlaugh v Clarke 1883 8 App Cas. 354 Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 Commissioner for Railways (NSW) v Agalinos (1955) 92 CLR 390 Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1987) 72 ALR 321 Humber and Co v John Griffiths Cycle Company (1901) 85 LTR 141 Flaherty v Girgis (1987) 71 ALR 1 Ketchell v Wynch (2001) 164 FLR 460 Pillar v Arthur (1912) 15 CLR 18 CASES CITED : Project Blue Sky Inc v Australian Broadcasting Authority (1985) 153 ALR 490 R v Reynhoudt (1962) 107 CLR 381 RA Ringwood Pty Ltd v Lower [1968] SASR 454 Re Alcan Australia Limited and Others, Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 123 ALR 193 Re Carter Smith, Ex parte Taxation Commissioners (1908) 8 SR (NSW) 246 Re Timberland Ltd v Equitable Forestry Services Pty Ltd (1976) VR 790 Ross v R (1979) 25 ALR 137 SA Police v Temday Pty Ltd and Ors (Unreported, SA Supreme Court, Perry J, 18 January 1996) The Commonwealth v Baume (1905) 2 CLR 405 WorkCover Authority of NSW (Inspector Keenan) v Lucon (Australia) Pty Limited [2002] NSWIRComm 68 HEARING DATES: 08/30/2002 DATE OF JUDGMENT: 09/06/2002

PROSECUTOR: Mr P Skinner of counsel SOLICITORS: LEGAL REPRESENTATIVES: Moray & Agnew

JUDGMENT: - 13 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s16(1) of the Occupational Heath and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s15(1) of the Occupational Heath and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s16(1) of the Occupational Heath and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s16(1) of the Occupational Heath and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s15(1) of the Occupational Heath and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s15(1) of the Occupational Heath and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s16(1) of the Occupational Heath and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v JOSEF & SONS CONTRACTING PTY LIMITED (IN LIQUIDATION) Prosecution under s15(1) of the Occupational Heath and Safety Act 1983

1 The prosecutor seeks that the Court make orders pursuant to s4 of the Supreme Court (Summary Jurisdiction) Act 1967 in each of these matters, in circumstances where the defendant company is in liquidation as the result of a voluntary winding up by creditors. This followed a special resolution passed by creditors on 6 May 1996.

2 These proceedings were earlier adjourned to enable the prosecutor to approach the Supreme Court for leave to proceed. The view now taken by the prosecution is that such leave is unnecessary and that accordingly, the summonses should be issued.

3 The prosecutor relied on the affidavit of Susan Jean Tankard, sworn on 28 August 2002, to demonstrate, by reference to various documents lodged with the Australian Securities & Investment Commission, that the company had been voluntarily placed into liquidation as the result of action taken by creditors. Also annexed to the affidavit was correspondence from the liquidator, advising that the company remained in liquidation and had no funds in order that it be represented in these proceedings.

4 It was submitted by Mr Skinner of counsel for the prosecutor, that s500(2) of the Corporations Act 2001 (Cth) ('the Corporations Law') applied. Section 500 provides: 500 Execution and civil proceedings

(1) Any attachment, sequestration, distress or execution put in force against the property of the company after the passing of the resolution for voluntary winding up is void.

(2) After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

(3) The Court may require any contributory, trustee, receiver, banker, agent or officer of the company to pay, deliver, convey, surrender or transfer forthwith or within such time as the Court directs to the liquidator any money, property or books in his, her or its hands to which the company is prima facie entitled.

5 Section 500(2) makes it clear, it was submitted, that leave of the Supreme Court was here not required, these proceedings not involving 'an action or other civil proceeding'. It was also submitted that s471B of the Corporations Law did not apply to these proceedings. It provides: 471B Stay of proceedings and suspension of enforcement process While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with: (a) a proceeding in a court against the company or in relation to property of the company; or (b) enforcement process in relation to such property; except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

6 Counsel relied upon the views expressed in an article by Professor Andrew Keay entitled 'Criminal Proceedings Against a Company in Liquidation: Is Leave of the Court Required?' 17 CSLJ 4. His view was that leave to proceed was required in circumstances governed by s471B, but not those circumstances governed by s500(2). Counsel otherwise referred to no authorities in support of the prosecutor's application.

7 The distinction between the two circumstances being dealt with in the two sections is that s471B is concerned with compulsory liquidation and s500(2), with voluntary liquidation. Professor Keay questioned why any distinction would be drawn by the legislature in these circumstances, given that, in other respects, it had sought to ensure that the treatment of voluntary and involuntary liquidations was harmonised. Nevertheless, after referring to the sections' predecessors and authorities in which they had been considered, the Professor's view was that the two sections, using different language as they did, must have been intended to make the different provision for which he contended. Professor Keay criticised that approach, but took the view that the result was unavoidable.

8 It was submitted that Professor Keay's view would be accepted, so as to lead to the making of the orders sought in these proceedings, without the need for the Supreme Court first to be approached by the prosecution.

9 The point argued raises an important question of statutory construction, given the provisions of the Occupational Health and Safety Act 1983 ('the OH&S Act'), which in s49 provides that proceedings for an offence under the Act may be commenced with the written consent of the Minister or a prescribed officer, by a WorkCover Inspector, or by a secretary of an 'industrial organisation of employees any member or members of which are concerned in the matter to which the proceedings relate.' Criminal prosecutions under the Act are thus not necessarily brought by the Crown.

10 Summonses for alleged offences under the OH&S Act are issued upon order of judges of this Court, pursuant to s4 of the Supreme Court (Summary Jurisdiction Act) 1967. What that involves was discussed by the Full Court in WorkCover Authority of NSW (Inspector Keenan) v Lucon (Australia) Pty Limited [2002] NSWIRComm 68 at [98] to [111]. The process does not involve the judge considering matters such as whether there is a prima facie case against a defendant, or even whether proceedings are brought within the time limit prescribed by s49. Such decisions are, nevertheless, it would seem, then final, in accordance with the provisions of s179 of the Industrial Relations Act 1996.

11 The question of whether leave of the Supreme Court to commence these criminal proceedings is required, arises from the use of the words 'no action or other civil proceeding' in s500(2), which appears in Part 5.5 Voluntary Winding Up, Division 3 Creditors Voluntary Winding Up. Those words appear in a legislative scheme which also includes the provision made in s471B, in the case of an involuntary winding up. There, the words 'a proceeding in a court' are used, s471B appearing in Part 5.4B Winding Up in Insolvency or by the Court, Division 1A Effect of Winding Up Order.

12 The language of s500(2) raises quite a difficult question of construction. The phrase 'no action or other civil proceeding', on Professor Keay's approach, 'obviously means that leave is not required for criminal proceedings' (at p9). That, with respect, is not so obvious. The word 'action', like the word 'proceeding', after all is a general word capable of comprehending both civil and criminal actions. See Bradlaugh v Clarke 1883 8 App Cas. 354 at 361 and Re Carter Smith; Ex parte Taxation Commissioners (1908) 8 SR (NSW) 246 at 248 where Street J said: 'Whatever the popular signification of the word 'action' may be, it is clear, as was pointed out by Bramwell and Lush LJJ, in Clarke v Bradlaugh (1881) 7 QBD 38 at 50 and 57 and by the Earl of Selborne LC and Lord Blackburn in the same case on appeal to the House of Lords that in its proper legal sense it is a generic term or nomen generale, and includes every sort of legal proceeding. When used by the legislature it must … be construed according to its true legal meaning unless it is apparent upon the fact of the Act in which it is used that it is intended to bear a more restricted meaning.'

13 More recently, Thomas JA in Ketchell v Wynch (2001) 164 FLR 460, after referring to Re Carter, observed at p467, that: 'It is true that the term 'action' has been given a range of meanings in a variety of contexts. Before the Judicature Acts the term was generally used to refer to a proceeding in a common law court, in contradistinction to a suit in equity. In more recent times, it became recognised that the term was not appropriate to describe criminal proceedings.'

14 It follows, that in considering the construction of s500, one question which arises is whether the legislature intended the word 'action' there used, to have a restricted meaning, that is, so as not to include criminal proceedings. To so read s500(2) as comprehending only civil actions, the word 'action' must be read as being qualified by the following words, 'or other civil proceedings'.

15 Statutory construction requires that words which are not defined, be given their ordinary and natural meaning (see Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 at 647 per Dixon J), unless they have a particular legal meaning (see Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1987) 72 ALR 321). It may immediately be observed that it is difficult to see what reference to both 'actions' and 'proceedings' in s500(2) adds to the provision there made. The word 'action' is, for instance, defined in Butterworths Concise Australian Legal Dictionary, Second Edition, as 'any proceeding in a court'. In the Limitation Act 1969 (NSW), 'action' is defined in s11(1) as 'includes any proceedings in a court'.

16 It is, however, a rule of statutory construction, that words may not be considered as superfluous, or insignificant and must prima faciae be given effect. (See The Commonwealth v Baume (1905) 2 CLR 405 at 414.) Hence, it must follow that both the words action and proceeding, when used in s500(2), have some work to do.

17 The construction of s500(2), may properly be approached in the context of the provision made in s471(2), where the more general phrase 'a proceeding in a court' is used. An Act must also be read as a whole (Commissioner for Railways (NSW) v Agalinos (1955) 92 CLR 390 at 397 per Dixon J, followed in Project Blue Sky Inc v Australian Broadcasting Authority (1985) 153 ALR 490 at 509). Different sections must also be read in such a way that they will fit with one another. This may require that a section be read more narrowly than if it stood on its own. (See Ross v R (1979) 25 ALR 137 at 145.)

18 In my view, a consideration of s500(2) so approached, properly leads to the conclusion that the legislature was seeking to make different provision in that section, when than that made in s471B. It would seem to follow from the use of the general phrase 'a proceeding in a court' in s471B, that leave to pursue both civil and criminal proceedings is required in the circumstances to which that section is directed, namely involuntary liquidation. That construction flows naturally from the ordinary meaning of the words used.

19 The provision made in s440D of the Corporations Law also lends support for that construction. It provides: 440D Stay of proceedings (1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except: (a) with the administrator's written consent; or (b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes. (2) Subsection (1) does not apply to: (a) a criminal proceeding; or (b) a prescribed proceeding.

20 In s440D the legislature, having also used the general words 'a proceeding in a court', in subsection (1) thought it necessary to expressly exclude 'a criminal proceeding' therefrom. Such proceedings are not excluded from s471B.

21 If the same result had been intended in the case of voluntary liquidation, with which s500(2) is concerned, one might imagine that the legislature would have used the same words as those used in s471B, to achieve that result. That it did not, is an obvious reason for thinking that a different result was sought to be achieved. This also provides a good reason for reading the words used in s500(2) as being limited to both civil proceedings and civil actions, the word 'civil' being read as intended to qualify both the words action and proceedings. This construction also naturally flows from the way in which the words appear in the phrase 'no action or other civil proceedings'.

22 Were s500(2) not to be so read, the reference to civil proceedings would appear to be otiose, both civil and criminal proceedings being comprehended in the general word 'action'. That is a result which seems unlikely to have been intended, given that the following words 'or other civil proceedings', would then have no work to do. The end result of such an approach to the construction of s500(2) would also be that s471B and s500(2) would have the same meaning, despite the use of such different language. Leave to commence both civil and criminal proceedings would be required in both cases.

23 So approaching the two sections, it becomes apparent that the phrase 'no action or other civil proceeding', (s500(2)), was intended to be more confined than that used in s471B, 'a proceeding in a court'. Words of limitation must of course be given effect and the meaning of a phrase must also be drawn from context. (See Avondale Motors (Parts) Pty Ltd v FCT (1971) 45 ALJR 280 at 283.) It follows that the use of the general words, 'a proceeding in a court', used without limitation, must have wider effect than the narrower phrase 'no action or other civil proceeding'. The use of the word 'civil', in the latter phrase must be read as a word of limitation, naturally excluding both criminal actions and proceedings, particularly when consideration is given to the absence of any reference to civil proceedings in s471B and no exclusion there of criminal proceedings.

24 While 'civil proceedings' is not a term defined in the Act, nor the word proceedings itself, it is also relevant to note that there is a definition of 'civil matter' in s9, defined as 'means a matter other than a criminal matter'. This also lends force to the conclusion which I have reached, namely that the use of the general word 'proceedings' without limitation to civil proceedings in s471B impels the conclusion that it was intended to encompass both civil and criminal proceedings in that section, but not in s500.

25 There is another point of difficulty in the construction of s500, to which it is however necessary to refer. The history of the construction of the predecessors to s471B, where similar general words were more narrowly construed than the construction which I favour, might tend one towards a different view. Statutory construction approached by reference to such prior statutory provisions, must, however, always be approached with some caution. (See the discussion in Statutory Interpretation in Australia, Pearce and Geddes, 5th Edition at p73-4, para [3.38] and [3.34]).

26 Also to be considered is the re-enactment rule, namely that in the case of an enactment or re-enactment of a provision that has been construed in a particular manner, the legislature is assumed to have approved the judicial interpretation. (See Pillar v Arthur (1912) 15 CLR 18.) The rule, however, only applies when precisely the same words are used and is one upon which considerable doubt has been cast, as involving an artificial approach. The views of Dixon J, in dissent, in R v Reynhoudt (1962) 107 CLR 381 at 388, were supported by Mason ACJ, Wilson and Dawson JJ in Flaherty v Girgis (1987) 71 ALR 1 at 14, where it was said that "for the reason given by Dixon CJ, the suggested rule nowadays is little use as a guide and it will not be permitted to prevail over an interpretation otherwise appearing to be correct". Nevertheless, it was a rule applied by the High Court in Re Alcan Australia Limited and Others; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 123 ALR 193 at 200, it there being accepted that the rejection of the recommendation of a committee that there be a departure from the earlier statutory provision, provided support for the operation of the rule.

27 Here, it follows that if it be presumed that Parliament was aware of the historical construction of predecessor sections, account must also be taken of the fact that it nevertheless elected to alter the earlier provisions to now make different provision in the case of voluntary and involuntary winding up, in ss471B and 500.

28 The past construction of the predecessors to s471B, if applied to it, would in my view require an unwarranted departure from the ordinary meaning of the words there used and would leave little distinction as between the different provisions now made in ss471B and 500(2). This would require that no proper regard be paid to the express words of limitation in s500, 'no action or other civil proceeding'. In my view s500 plainly contemplates leave only being required in the case of civil proceedings. Section 471B does not.

29 It is of relevance that the immediate predecessor to s471B, s471(2) of the Corporations Law, like s500(2), provided: Where an order has been made for the winding up of a company, or a provisional liquidator has been appointed in respect of a company, no action or other civil proceeding may be commenced or proceeded with against the company except -

(a) by leave of the Court; and (b) in accordance with such terms as the Court imposes.

30 That such different provision was introduced in s471B, must be taken into account and given effect. When s500 was enacted, it was in similar terms to s471(2). Section 471(2) was, however, rewritten after it was repealed by the Corporate Law Reform Act 1992 and s471B enacted. It seems to me that it must be assumed that the change in s471B, the omission of any reference to civil proceedings, was deliberate and designed to bring about a different result than that now provided for in s500.

31 As I noted, some difficulty potentially flows from the construction of earlier provisions. For example, in RA Ringwood Pty Ltd v Lower [1968] SASR 454, the Full Court of the Supreme Court of South Australia was dealing with offences under the Road Maintenance (Contribution) Act 1963 and was considering s263(2) of the Companies Act 1962-66, which provided: "(1) Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a creditors' voluntary winding up shall be void. (2) After the commencement of the winding up no action or proceedings shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes. (3) The Court may require any contributory, trustee, receiver, banker, agent, or officer of the company to pay, deliver, convey, surrender or transfer forthwith or within such time as the court directs to the liquidator any money, property or books and papers in his hands to which the company is prima facie entitled."

32 The words of s263(2) are not identical to those of either s471B or s500. In Ringwood the company charged went into liquidation before the hearing. At the hearing it was convicted and fined and also ordered to pay the sum due as road maintenance charges. On appeal it was argued that leave to proceed should have been obtained, before the hearing below proceeded. Bray CJ, after reviewing various authorities, took the view that s263 did not apply to all prosecutions, even though s263(2) was not limited by reference to civil proceedings, for example. His Honour held at p458: 'I can find no other way of reconciling the cases, or of distinguishing between the type of prosecution to which s. 263(2) can reasonably apply and the type of prosecution to which I think it was never intended to apply, than by the distinction between prosecutions the object of which is punitive and prosecutions the object of which is simply to enforce a right to the payment of money.'

33 Walters J, with whom Mitchell J agreed, took the view that s263(2) did not require leave to proceed, concluding at pp464-5: 'Mr. Wilkinson was not disposed to go so far as to argue that the prohibition created by s. 263(2) extends to a prosecution for a criminal offence, but was content to limit his argument to the restraint of proceedings in respect of a quasi-criminal offence. It seems to me, however, that a classification of offences into criminal and quasi-criminal offences is only a classification for procedural purposes. A quasi-criminal offence is a simple offence, of lesser order of gravity than an indictable offence, but intrinsically it is no less a crime than an offence triable upon indictment. Apart from the fact that a quasi-criminal offence is so obviously minor that it may be tried summarily, I cannot see that for the purpose of construing s. 263 (2), any significance lies in the distinction between a criminal offence and a quasi-criminal offence. In each case, the Crown is not concerned with the enforcement of a civil right, but with the enforcement of public rights and duties and with criminal justice for the defendant and his offence. It seems to me, therefore, that if the words "action or proceedings" employed in s. 263 (2) are intended to restrain a prosecution for a summary offence, they must equally forbid a prosecution for an offence triable on indictment. In my view, the bringing of a prosecution whether it be proceeded with on indictment, information or complaint cannot be deemed to be "action or proceeding" within the meaning of s. 263 (2), and the application of those words must be restricted to a civil cause and the enforcement of civil rights.

34 This view was later followed by Dunn J in Re Timberland Ltd v Equitable Forestry Services Pty Ltd (1976) VR 790 at 791-2 and more recently, by Perry J in the Supreme Court of South Australia in SA Police v Temday Pty Ltd and Ors (Unreported, 18 January 1996). There, the question arose on appeal, after the dismissal of a complaint brought for breach of a condition of a license granted under the Liquor Licensing Act 1985. After the Chief Magistrate ordered the dismissal of the charges, the company went into liquidation. Section 471B arose for consideration on appeal. Perry J followed the decision of the House of Lords in Humber and Co v John Griffiths Cycle Company (1901) 85 LTR 141, where the view was taken that an appeal was a proceeding which could be taken without leave being granted under the provision of the Companies Act (1862) UK. His Honour also followed the decision in Ringwood, concluding at para [12]: 'Insofar as this case concerns a complaint heard in a court of summary jurisdiction, in my opinion, the question whether it may properly proceed following the liquidation of Temday is concluded by the authority of Ringwood v Lower. Clearly, if the hearing and determination of the complaint itself did not involve the need to obtain leave under s471B(a), it could not be suggested that the hearing of an appeal against a dismissal of the complaint required such leave.'

35 His Honour did not deal with the change in the language used in s263(2), compared to that now appearing in ss471B and 500(2). As it transpires, his Honour's view of the proper construction of s471B does not accord with my own. In my view, the approach in Ringwood, where a distinction was drawn between different types of criminal proceedings, is not one available in the case of either s471B or s500(2). I am satisfied, for the reasons which I have explained, that s471B requires leave to begin or proceed with any proceeding in a court, whether civil or criminal and that s500(2) only requires leave to proceed with, or commence, civil proceedings and actions.

36 I am satisfied that leave of the Supreme Court is not required before the prosecutor commences these proceedings. For all of these reasons I now propose to make the orders sought pursuant to s4 of the Supreme Court (Summary Jurisdiction) Act 1967, in each case. ------------------------

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