Telstra Corporation Ltd v Smith [2008] FCA 1859 (10 December 2008)

ADMINISTRATIVE LAW – procedural fairness – whether requirement to give prior notice of adverse findings – whether applicant denied right to be heard – extent of right to be heard determined by legislative provision – matter of fact – applicant had legal representation – applicant corresponded with decision-maker – no breach

STATUTORY INTERPRETATION – definitions not treated as substantive provisions – use of objects clauses – departing from ordinary meaning of words

OCCUPATIONAL HEALTH AND SAFETY – meaning of ‘workplace’ – fact specific consideration – site principal purpose was for company’s undertaking – site at all times a workplace

Acts Interpretation Act 1901 (Cth) s 25D
Administrative Appeals Tribunal Act 1975 (Cth) s 43(2B)
Occupational Health and Safety Act 1991 (Cth) s 5, s 17, s 41, s 42, s 43, s 46, s 47, s 48, s 53, s 53(1), s 53(2), s 53(4), s 68
Occupational Health and Safety Act 1983 (NSW) s 16
Occupational Health and Safety (Safety Arrangements) Regulations 1994 r 37A

Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 cited
Asiamet (No 1) Resources Pty Ltd v Federal Commissioner of Taxation [2003] FCA 35; (2003) 196 ALR 692 applied
Brinsmead v Commissioner, Tweed Shire Council Public Inquiry (2007) 69 NSWLR 438 cited
Commissioner for the Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576 applied
Director of Public Prosecutions v Esso Australia Pty Ltd [2001] VSC 103 cited
Gill v Donald Humberstone & Co Ltd [1963] 3 AII ER 180 cited
Hoffman La Roche v Trade Secretary [1975] AC 295 applied
Inspector Campbell v James Gordon Hitchcock [2004] NSWIRComm 87 distinguished
Inspector Clarke v WL Meinhardt & Partners Pty Ltd (unreported, Fisher CJ, 30 June 1992) distinguished
Kiao v West [1985] HCA 81; (1985) 159 CLR 550 applied
Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 applied
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 applied
Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 CLR 475 applied
National Companies & Securities Commission v News Corp Ltd [1984] HCA 29; (1984) 156 CLR 296 applied
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 29; (1998) 194 CLR 355 cited
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 cited
Salemi v MacKellar (No 2) [1977] HCA 26; (1977) 137 CLR 396 cited
Tsougranis v Inspector Carmody (No 2) [2006] NSWIRC 133 distinguished
WAJH v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 935 distinguished
WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited [2003] NSWIRComm 370 distinguished
WorkCover Authority of NSW (Inspector Paine) v Boral John Perry Industries Pty Limited t/as Boral Elevators (unreported, Industrial Relations Commission NSW, Maidment J, 8 August 1996) distinguished
WorkCover Authority of New South Wales (Inspector Hughes) v Boral Montaro Pty Limited (unreported, Peterson J, 19 December 1997) distinguished
Wu v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1242; (2002) 123 FCR 23 distinguished
Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 cited

Pearce & Geddes, Statutory Interpretation in Australia (2006) (6^th ed)

TELSTRA CORPORATION LTD v WILLIAM SMITH, COMCARE and SAFETY REHABILITATION AND COMPENSATION COMMISSION
VID 173 OF 2008

MIDDLETON J
10 DECEMBER 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 173 OF 2008

BETWEEN:	TELSTRA CORPORATION LTD Applicant
AND:	WILLIAM SMITH First Respondent COMCARE Second Respondent SAFETY REHABILITATION AND COMPENSATION COMMISSION Third Respondent

JUDGE:	MIDDLETON J
DATE:	10 DECEMBER 2008
PLACE:	MELBOURNE

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 173 OF 2008

BETWEEN:	TELSTRA CORPORATION LTD Applicant
AND:	WILLIAM SMITH First Respondent COMCARE Second Respondent SAFETY REHABILITATION AND COMPENSATION COMMISSION Third Respondent

JUDGE:	MIDDLETON J
DATE:	10 DECEMBER 2008
PLACE:	MELBOURNE

1 On 14 November 2006 a child was injured when her mother fell over a Telstra pit lid situated on a public foothpath (‘the incident’). It was not in dispute that, at the time of the incident, no employees or contractors of Telstra were working at or near the pit or the pit lid. The evidence was that the most recent time that the pit lid may have been moved to access the pit beneath was 8 September 2006 to locate a fault. Telstra’s records indicated that the pit beneath the pit lid would have been accessed on less than 20 occasions between 1996 and the date of the incident.

2 Telstra owns and controls in excess of six million pits and pit lids throughout Australia. The pit lid is an access point to the pit. Pit lids and pits are regarded by Telstra as long term assets and are constructed as such. The pit is an underground void in which telecommunications cables are jointed and protected from the elements and from accidental or deliberate damage. The pit is installed to allow access to, and maintenance of, Telstra’s underground network. The pit is accessed only when it is necessary to perform tasks such as connecting a new customer service or locating a fault. Telstra is responsible for maintaining its pits.

3 Telstra generated a health and safety incident report about the incident. Telstra provided that report to the second respondent, Comcare, on 15 November 2006. Telstra was obliged to report notifiable events to Comcare. On 16 November 2006 Telstra sought to withdraw the notification on the basis that it had been reported to Comcare in error. Telstra asserted that the incident was not a notifiable event because it had not occurred at a workplace under Telstra’s control.

4 Comcare did not accept the withdrawal of the notification. By email dated 21 November 2006, Comcare informed Telstra that Comcare had commenced a reactive investigation into the incident and that Mr William Smith would be the investigator. In a subsequent email dated 21 November 2006, Comcare informed Telstra that the reactive investigation commenced by Mr Smith would examine Telstra’s compliance with s 17 of the Occupational Health and Safety Act 1991 (Cth) (‘the Act’). By letter dated 24 November 2006, Mr Smith sought the production of documents and a response to questions pursuant to s 43 of the Act. Various correspondence ensued.

5 By letter dated 26 February 2008, purportedly pursuant to s 53(4) of the Act (and on behalf of the third respondent), Comcare required Telstra to respond to recommendations contained in a report prepared by Mr Smith, purportedly under s 53(1) of the Act (‘the report’).

6 The report found that the incident was a dangerous occurrence as defined in s 5 of the Act, and was therefore notifiable to Comcare under s 68 of the Act and reg 37A of the Occupational Health and Safety (Safety Arrangements) Regulations 1994. There was no dispute, for the purposes of this proceeding, that the incident did qualify as a dangerous occurrence.

7 The report also concluded that Telstra breached s 17 of the Act in respect of the incident. That section provides:

8 Telstra was not given a draft of the report, nor notice of the conclusions contained within it, prior to its publication.

10 Premises is defined widely to include any place, including a place situated underground or under water and, in particular, includes a building or vessel and any structure whether fixed or moveable. It also includes a part of premises otherwise defined.

12 Section 41(1) of the Act provides that a Comcare investigator may conduct an investigation:

14 In addition, under the Act, powers are given to investigators to issue prohibition notices in cases of urgency (s 46) and to issue improvement notices (s 47). In each of these cases (as in other specified instances) there is the availability of an appeal (s 48).

• the term ‘workplace’ in s 17 of the Act includes, or could include, the pit lid and pit in which employees of Telstra did work from time to time, irrespective of whether at the time of a given incident affecting a third party any employees of Telstra were present;

• the making of the report by Mr Smith under s 53 of the Act, including a conclusion that Telstra breached s 17 of the Act, involved a denial of procedural fairness to Telstra;

• Mr Smith failed to comply with s 53(2) of the Act by failing to include reasons for the conclusions in the report;

• the conclusion in the report that Telstra breached s 17 could be included in the report and whether it was open for Mr Smith to so find on the material before him; and

• if the Court found that there was failure to include reasons for the conclusions in the report, the Court should set the report aside.

16 I proceed on the basis that the obligation of Telstra to notify an incident, and the respondents’ powers under the Act, depend entirely upon the incident having occurred at a workplace.

17 It may be that the more appropriate way to proceed is to ask whether it was open to Mr Smith to proceed under s 41 of the Act to conduct an investigation concerning a ‘possible breach’ of the Act, or to make a report under s 53(1) finding a breach of s 17 of the Act. However, in view of the parties’ desire to have a judicial determination as to the application of the term ‘workplace’, and in light of the view I have adopted, I proceed to consider whether the pit and pit lid was ‘a workplace’ within the meaning of s 17 of the Act.

18 In my view, whether an incident referable to the Act occurs in a workplace (as defined) depends entirely on the specific facts and circumstances of any particular case. I proceed, therefore, by reference to the facts of this case, including Telstra’s ownership of the pit and pit lid, the nature of Telstra’s undertaking, and the use and purpose of the pit and pit lid, none of which are in factual contention.

19 Telstra did not dispute the proposition that when its employees or contractors are working in a pit, the pit (and pit lid) is a workplace within the meaning of s 5 of the Act, and that Telstra is, at that time, conducting its undertaking at that pit. Fundamentally, Telstra contended that a pit (and a pit lid) could not be a workplace within the meaning of the Act ‘unless at the very least work is being conducted upon it or in the pit to which it provides access’.

20 Telstra referred to several decisions under similarly worded provisions to support its proposition that a pit is not a workplace at times when work is not being performed in the pit. Telstra argued that there is no reason to construe s 17 of the Act any differently from the other legislation using similar phrasing. Telstra also referred to the objects of the Act as set out above. Principally, Telstra referred to the object contained in s 3(b), namely ‘to protect persons at or near workplaces from risks to health and safety arising out of the activities of such employees at work’ (emphasis added).

22 In WorkCover Authority of NSW (Inspector Paine) v Boral John Perry Industries Pty Limited t/as Boral Elevators (unreported, Industrial Relations Commission NSW, 8 August 1996) Maidment J found that the obligation cast upon the defendant by s 16(1) of the Occupational Health and Safety Act 1983 (NSW) (‘the NSW Act’) was confined to the periods when maintenance work was being conducted on a lift. His Honour found that the existence of a contractual obligation to regularly service a lift did not result in the lift being, at all times, a place of work of the lift maintenance company within the sense of s 16 of the NSW Act.

23 Justice Maidment referred to the decision of Fisher CJ in Inspector Clarke v WL Meinhardt & Partners Pty Ltd (unreported, Fisher CJ, 30 June 1992) concerning prosecutions under ss 15 and 16 of the NSW Act. In Meinhardt, a defendant employer had designed a safety support system, the purpose of which was to safely incorporate a historical façade into a new building on the same construction site. A different party had constructed the system. The façade collapsed. Two of the defendant employer’s workers were on site at the time of the collapse, inspecting integral elements of the support system. The defendant employer submitted that its own office was its place of work, rather than the construction site. Chief Justice Fisher rejected that submission and said (at 11):

25 Telstra also relied upon passages where, after referring to Boral Elevators, the Full Bench of the NSW Industrial Court in Tsougranis v Inspector Carmody (No 2) [2006] NSWIRC 133 said:

26 Further, in Inspector Campbell v James Gordon Hitchcock [2004] NSWIRComm 87, Walton J Vice President applied Boral Elevators and held:

27 Boral Elevators was also approved by Peterson J in WorkCover Authority of New South Wales (Inspector Hughes) v Boral Montaro Pty Limited (unreported, Peterson J, 19 December 1997), a case which dealt with the concept of ‘employer’s place of work’, again focusing attention (in keeping with the approach of Fisher CJ) on the performance of work.

28 In the case of WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited [2003] NSWIRComm 370, Schmidt J rejected the contention that a gas pipeline installed by an employer, which it may need to return to for maintenance, was at all times the ‘place of work’ of the employer. His Honour concluded at [168]:

29 His Honour considered the legislation and its objects, the Minister’s Second Reading speech, and the authorities concluding at [173]:

30 English authorities concerning the meaning of a "workplace" were said by Telstra to also reflect the view that the nature of a premises may change, depending upon the use applied to it from time to time. In Gill v Donald Humberstone & Co Ltd [1963] 3 AII ER 180, Lord Evershed considered that a working place must be a place where work was set to take place for an appreciably continuous period of time (at 188). In other cases, working place or workplace has been held to be a place where work is being done.

31 In this proceeding, the question is whether the pit and pit lid are at all times a workplace of Telstra for the purposes of the Act. There seemed no dispute that a pit is capable of being a workplace and that the pit lid could be a ‘structure’ or ‘part’ of the pit.

32 The cases which Telstra relied on were largely premised on the Boral Elevators case. I consider that Boral Elevators is distinguishable on its facts. Elevators are constructed for the very purpose of being used by people who are not necessarily elevator constructors nor maintenance workers. In shops, hotels and public buildings, they are provided for use by the general public. Elevators would not normally be regarded as, at all times, a workplace of a lift maintenance company, which may have contractual obligations of maintenance to the owner of the premises in which the elevator is situated, but does not possess, own or control the elevator itself. In that situation, an issue may arise as to whether a particular defendant is an employer at a particular workplace under its control. However, the elevator would normally be regarded as (part of) the workplace of, say, the owner of the shop, hotel or public building where its employees use or operate the elevator. In those circumstances, the elevator would always be the workplace of such an owner and employer. If the elevator was being repaired, then during that period, it could also be regarded as the workplace of the lift maintenance company engaged on site.

33 In the case of Telstra’s pit and pit lid, each exists to be used and accessed by Telstra employees, and is available for such use and access at all times. Putting aside other persons having access to the pit (presumably with the authority Telstra) the principal function of the pit is to carry out Telstra’s activities. Each pit and pit lid is owned and controlled at all times by Telstra. An important purpose and function of the pit is to facilitate work being performed for Telstra’s other assets, so that Telstra can provide services to its customers. After all, the pit has been installed to allow access to, and maintenance of, Telstra’s underground network.

34 Take also the case of AGL Gas Networks [2003] NSWIRComm 370 which is similarly distinguishable. The pipeline existed, once constructed, for the sole purpose of conveying utilities such as gas or water. Unlike a pit and pit lid, it had a purpose other than that of being a dedicated and specific workplace of a particular employer. That distinction underpins why the pipeline was not, at all times, a workplace. It was only a workplace of the construction company while under construction, and only a workplace of the particular employer engaged to undertake maintenance when the pipeline was being repaired or upgraded. No part of the pipeline was at all times a dedicated place for employees to attend for work.

35 Therefore, in the above examples, and in the operation of the Act, it may be that a particular place may not be a workplace at all times, or on all occasions, for the purposes of the Act. Nevertheless, such places become workplaces, where they otherwise are not, upon a particular activity taking place; that is, where a particular employer engages employees to undertake an employment activity, such as a lift maintenance company using its employees to repair a lift in a hotel.

36 However, as I have already indicated, this is not the situation here with Telstra, which at all times owns (and controls) the pit and pit lid, and which has created the pit and pit lid for the primary purpose of permitting its employees to carry out Telstra’s activities. Just because an employee is not in attendance at any given time does not mean a place is not a ‘workplace’ at other times. A factory, which may at times be shut or not operating, is nevertheless a dedicated place for employees to work, and normally would at all times be considered a workplace of the particular employer who employed people at that factory.

37 The appropriate conclusion to reach in this proceeding is readily apparent if one focuses on the pit, rather than just the pit lid. The pit lid is, as I have said, included within the definition as part of the premises. The pit lid can be equated with the door of the workplace. The pit could hardly be described as anything other than a workplace in the ordinary sense of the term. The pit exists to house the telecommunication cables, but is primarily there to allow Telstra employees to carry out their duties as employees to access and maintain the underground network, once gaining access through the pit lid. The pit would not exist but for the existence of Telstra’s business and its undertaking, and is at all times available for use by Telstra in undertaking its business.

38 Looking at the words of s 5 of the Act, the pit is a premises ‘in which’ the prescribed employees work. The words of the definition say that the place must be somewhere ‘in which’ Commonwealth employees work. A pit primarily used to access and maintain telecommunications infrastructure is a place ‘in which’ such employees work, in the sense that it is not a private place, nor a place disconnected with the work of such employees. The ordinary meaning of the words used in the definition of ‘workplace’ supports this construction, and to depart from this ordinary meaning can only be justified if to do so would be in accordance with a purposive construction: see, eg, Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at [235] per Dawson J.

39 Telstra does point particularly to one object of the Act in aid of its purposive construction, namely to protect persons only arising from the activities of the employees at work. One must be careful of the use to be made of objects clauses in legislation: see Pearce & Geddes, Statutory Interpretation in Australia, (2006) (6^th ed) at [4.42]. However, in my view, this object is achieved by giving practical content to s 17 of the Act, not in the reading of the definition of ‘workplace’ as contended by Telstra. For instance, as the authorities relied on by Telstra indicate, the legislation there referred to does not require an employer to ensure that the product of the work is devoid of hazard. In my view, this is not because of a restricted meaning being given to the definition of ‘workplace’, but arises out of the scope of the obligations cast upon any defendant employer by s 17.

40 It is important to recall that definitions found in legislation are not to be treated as substantive provisions – they are there as an aid to construction of the operative parts of the legislation. Consequently, the operation of any legislation must be viewed upon an examination of the substantive provisions themselves, interpreted in context and according to the defined sense of the words found therein.

41 As Telstra recognises, s 17 of the Act links the concepts of ‘workplace’, ‘control’ and ‘undertaking’: each have a role to play in prescribing the scope of s 17. In addition, an employer need only take ‘all reasonably practicable steps’ to ensure the prescribed persons are not exposed to risk to their health or safety.

43 I interpolate that as to the factual issue of whether the incident did or did not arise from the conduct of Telstra’s undertaking, there was no material before me to suggest that the risk to health and safety did not arise from the conduct of Telstra’s undertaking. It was a matter open to Mr Smith to find. In any event, it seems to me that the reference to ‘undertaking’ is a reference to the employer’s business. In the case of Telstra, the conduct of Telstra’s undertaking would include the maintenance of underground cables, plant, pits and pit lids. However, this question was not the focus of argument before me.

44 I only refer to the above submission of Telstra, and the operation of s 17 of the Act, to show that even if one construes the term ‘workplace’ to cover the Telstra pit and pit lid at all times, this does not necessarily mean that s 17 will be applied to go further than the objects of the Act relied upon by Telstra. After all, as I have indicated, s 17 only requires the employer to take all reasonably practicable steps, and the objects of the Act may well inform and give practical content to what is required in this regard.

45 It is also to be recalled that the term ‘workplace’ is not just found in s 17, but is found throughout the Act, and must be interpreted in the same way, unless the context indicates otherwise. For instance, in s 42, the investigator is given a power of entry to search a workplace. I cannot see that power as being limited to the pit or lid in the way suggested by Telstra, namely when its employees or contractors are working in the pit. Once one comes to the conclusion reached above as to the nature and purpose of the pit and pit lid, then the inescapable conclusion is that it is a workplace to which the Act generally applies.

46 In my view, therefore, the pit and pit lid of Telstra was a ‘workplace’ at the relevant time of the incident.

47 Telstra contended that the preparation and publication of the report making findings of a breach of s 17 of the Act gave rise to an obligation on the part of Mr Smith to afford procedural fairness to Telstra. Telstra argued that a person has the right to be heard prior to an administrative decision-maker making a decision which adversely affects the legal rights or legitimate expectations of a person (referring to Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at 598). Telstra submitted that it was not given any, or adequate, opportunity to provide information and make submissions in respect of matters critical to the decision that it breached s 17 of the Act. Specifically, Telstra argued that, despite a direct request, it was not given notice of the adverse findings before the report was published, nor was Telstra given notice of, or an opportunity to respond to, the matters underlying the findings.

48 Accepting that procedural fairness must be accorded, the respondents contended that in the making of the report under s 53 of the Act, procedural fairness was afforded to Telstra. The respondents contended that throughout the process Telstra was legally represented, and took every opportunity it could to put arguments and submissions to Mr Smith and to Comcare. It was argued by the respondents that Telstra advanced its case in correspondence from its lawyers as early as 20 December 2006. Mr Smith made it clear Telstra was free to make any submissions it considered appropriate. Further, the respondents contended that Telstra’s solicitors re-stated Telstra’s contentions about the matter on 16 January 2007 and 30 October 2007. The level of communication, it was said, throughout the investigation made it clear that Telstra had more than a reasonable opportunity to be heard about whether it was in breach of s 17 of the Act. There was, it was contended, no ‘practical injustice’ to Telstra, which is the gravaman of denial of procedural fairness: see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1, 13-14 at [37].

49 I consider that Telstra’s complaint of lack of procedural fairness, and the other matters raised, are properly answered by recognising the scheme of the Act.

50 It is established principle that, in the case of a statutory power, the statutory context will be of central importance in determining the content of procedural fairness: see, eg, Salemi v MacKellar (No 2) [1977] HCA 26; (1977) 137 CLR 396, 444; Kiao v West [1985] HCA 81; (1985) 159 CLR 550, 584-85; Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 CLR 475, 503-504; and National Companies & Securities Commission v News Corp Ltd [1984] HCA 29; (1984) 156 CLR 296, 326.

51 Undoubtedly, the consequences of any particular decision upon a person are important, but again, this is to be weighed in the balance in light of the statutory context.

52 The Act regulates the conduct of certain kinds of employers and employees for the purposes of protecting the health and safety of Commonwealth employees at work, and protecting the health and safety of members of the public who might be affected by the way in which Commonwealth employers and employees undertake their businesses and work.

53 One of the Act’s regulatory mechanisms is the ability for Comcare to conduct investigations: see Pt 4, Div 2. An investigator is empowered by s 41(1) of the Act not only to investigate a breach or possible breach of the Act (s 41(1)(b)) but also simply to investigate whether the requirements of the Act are being complied with (s 41(1)(a)). Mr Smith exercised this power to conduct the investigation.

54 In the conduct of the investigation, an investigator may exercise powers to avoid immediate risks (see, for example, s 46 of the Act), or may form a view that the employer should be required to take positive action promptly to remedy a risk which exists: see s 47 of the Act (improvement notices). A formal process (including of appeal) is set out in respect of these powers.

55 By contrast, the provision of a report to the third respondent, the Commission, under s 53 of the Act, and the subsequent request by the Commission of an employer under s 53(4) is a more open ended and interactive process. No formal process nor appeal is provided for by the Act. The obligation imposed on an employer under s 53(4) is (in the absence of notices under ss 46 or 47 of the Act) simply to give Mr Smith particulars of any action proposed to be taken as a result of the report.

56 A more detailed inquiry and report process under the remainder of Div 3 of the Act may or may not then occur. It will definitely not occur in relation to Telstra, by reason of s 52 of the Act. Nevertheless, the Div 3 process is quite separate to proceedings for civil penalty or criminal offences under Pt 1 and Part 2 to Sch 2 of the Act.

57 The ambit or content of the duty to accord procedural fairness is obviously greater when proceedings for a breach of the Act are instituted pursuant to s 77 of the Act. Those proceedings may be civil and seek declarations and pecuniary penalties (see Sch 2 Pt 1 cll 2 and 4), or they may be criminal (see Sch 2 Pt 2 cll 18 and 21).

58 As I have said, the consequences of any particular decision upon a person are to be considered when determining the ambit of the content of procedural fairness. I do accept that the making of the report could lead to some impact upon the reputation of Telstra, but only to a very limited extent. This limited extent arises out of the operation of s 53(5) of the Act, which requires the report to be given after receipt by Telstra to a limited number of third persons. I am prepared to assume in favour of Telstra that the report was given to that limited number of third persons. Of course, the report is also seen by relevant personnel within Comcare and the Commission. There was no other evidence before me that Telstra would be otherwise affected by the report or Mr Smith’s findings.

59 Focusing then on the scheme of the Act and the very limited impact on Telstra’s reputation, in my view, Telstra was accorded procedural fairness by the opportunity it had prior to the report coming into existence.

60 Telstra was represented by lawyers, had taken the opportunity to put arguments and submissions, and was invited to do so. Telstra knew the essential issues being investigated, including the question of breach of s 17 of the Act.

61 It is not in all cases a pre-requisite for the according of procedural fairness that a draft of a report containing adverse findings be given for comment to the person the subject of the adverse findings: see, eg, Hoffman La Roche v Trade Secretary [1975] AC 295 at 369; Commissioner for the Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576, at 590-91; Asiamet (No 1) Resources Pty Ltd v Federal Commissioner of Taxation [2003] FCA 35; (2003) 196 ALR 692, at 713-14.

62 I do not have before me a situation where the decision-maker had undertaken to provide an opportunity for comment prior to making an adverse decision: see, eg, Wu v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1242; (2002) 123 FCR 23; and WAJH v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 935.

63 Of course, critical issues must be identified by the decision-maker, and it may be that prior disclosure of an adverse conclusion will be necessary where that conclusion is not obvious, or anticipated, or perhaps to be reasonably anticipated. However, in the circumstances of this case, and in view of the opportunity given to Telstra, I do not consider that it was necessary for Telstra to have been given the opportunity to comment on any provisional conclusions.

64 Based on the communications passing between the parties, I find that Telstra had a clear appreciation of the issues involved, including the potential for a finding of failing to take reasonably practicable steps.

65 In these circumstances, and where the report of Mr Smith could have no legal consequences for Telstra other than the obligation to respond imposed by s 53 of the Act (not expressly enforceable), no further opportunity for Telstra to be heard needed to be provided.

66 No doubt a report unfavourable to an employer might result in the commencement of legal proceedings pursuant to s 77 of the Act. However, in my view, to condition the power to conduct an investigation with the content of an obligation to afford procedural fairness as contended by Telstra would inhibit the investigatory function so as to frustrate a fundamental purpose or object of the Act, which could well undermine the obvious purpose of an investigation under s 41 and the preparation of a report under s 53.

67 Therefore, I conclude that the making of the report by Mr Smith, including a conclusion that Telstra breached s 17, did not involve a denial of procedural fairness to Telstra.

Did the Mr Smith fail to comply with s 53(2) of the Act by not including reasons for conclusions in the report?

1. The assertion of the breach of s 17 of the Act (and that the incident was a dangerous incident) was not accompanied by any analysis of the elements of the offence (including, but not limited to, the meaning of workplace) created by s 17 and how those elements were satisfied in this case.

2. In particular, there was an assertion in the report that Telstra failed to take all reasonably practicable steps to ensure that people at or near pits or pit lids were not exposed to health and safety risks as a result of its undertaking, but the steps that Telstra should have taken were not identified, and it was not explained how any such steps were practicable.

3. There was no analysis or reasoning as to how a pit or a pit lid was said to be a workplace or a workplace under the control of Telstra at the time of the incident.

4. There was no analysis or reasoning as to how it is said that the incident arose as a result of Telstra’s undertaking.

69 Telstra submitted that no breach of s 17 of the Act could occur unless there were reasonably practicable measures that could have been taken to negate or reduce the risk. Telstra referred to tort cases and argued that the investigator did not identify any ‘alleviating action’: (see Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 at 47-8).

70 Telstra submitted that if the investigator was entitled to make a finding of a breach of s 17 of the Act, and if he turned his mind to the correct legal test in respect of the elements of a breach of s 17, he nevertheless failed to comply with s 53(2) of the Act, because he failed to provide reasons for concluding that s 17 had been breached. Therefore, according to Telstra, the report was ‘a purported report and a nullity’: see Project Blue Sky v Australian Broadcasting Authority [1998] HCA 29; (1998) 194 CLR 355, 388-91 at [91]-[93] per McHugh, Gummow, Kirby and Hayne JJ.

71 Telstra also referred to the decision of Cummins J in Director of Public Prosecutions v Esso Australia Pty Ltd [2001] VSC 103 in support of the contention that Mr Smith was obliged to state with particularity the reasonably practicable steps that should have been undertaken by Telstra.

72 The purpose of the requirement for reasons in this case, Telstra argued, was to enable the person the subject of an adverse finding to be informed of the basis for the reaching of the conclusion that s 17 of the Act had been breached and to enable a Court on review to determine if proper principle has been applied in reaching such a conclusion. Telstra then contended that this obligation necessarily required Mr Smith to set out the relevant evidence, material findings of fact and conclusions, and his reasons for making the relevant findings of fact and conclusions.

73 Telstra contended that in this case the investigator asserted that Telstra breached s 17 of the Act but gave no reasons to permit an understanding as to how the conclusion was reached. In particular, the investigator asserted the existence of each of the essential elements required to be established for a breach of s 17 but gave no reasons to justify such findings. There were no reasons given for the findings that the incident occurred at a workplace, under the control of Telstra, that the incident occurred as a result of Telstra’s undertaking and that there were reasonably practicable measures that were available to Telstra. There was, it was said, on the face of the report, an obvious and fundamental failure to comply with s 53(2) of the Act.

74 It was submitted that the legislature chose to make the provision of reasons for any conclusions in a report a mandatory requirement for a valid report. The type of response required by s 53(4) of the Act, particularly when read in light of the objects of the Act as specified in s 3(b) of the Act regarding encouraging and assisting persons to comply with their obligations under the Act, required the provision of proper reasons.

75 Telstra contended that the finding that Telstra breached s 17 was a serious one. If the legislature required the investigator to make such a finding, it would be hardly surprising that the legislature would require the investigator to record the evidence relied on, and the reasons giving rise to a finding that each element of s 17 was breached and was established by the evidence.

76 Moreover, it was contended by Telstra that the requirement that the investigator expose his reasons for such a serious finding and the investigator’s failure to do so supports the contention of Telstra that not only did the investigator fail to comply with s 53(2), he erred in law by failing to address and make findings about matters essential to the consideration of whether a breach of s 17 had occurred.

77 I start from the proposition that the obligation to give reasons is to be assessed in light of the statutory context in which the obligation appears. Section 53(2)(a) of the Act provides that the report prepared by the investigator must include the investigator’s conclusions from conducting the investigation and the reasons for those conclusions. I accept that, by reason of the application of s 25D of the Acts Interpretation Act 1901 (Cth), s 53(2)(a) is to be construed as requiring an investigator to set out his or her material findings of facts and to refer to the evidence on which those findings are based.

78 However, there is no obligation to ‘set out reasons for making’ the findings of fact, which imposes another kind of obligation (see, eg, s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth)).

79 Further, while there is plainly an obligation to give reasons, the statute requires an investigator to give reasons for his or her own conclusions. The term ‘conclusions’ in s 53(2) of the Act refers back to the task the investigator was authorised to perform under s 41(1), (2) or (3) as the case may be. Relevantly, the task in this case was performed pursuant to s 41(1). The investigator’s conclusions could be one or more of the following:

• that the requirements of the Act and/or regulations were not being complied with (s 41(1)(a)); or

• that a breach or possible breach of the Act or regulations had occurred (s 41(1)(b)); or

• that an accident or dangerous occurrence happened as a result of performing work for an employer (s 41(1)(c)).

80 In this statutory context, the first intended recipient of the report is the Commission (see s 53(1) of the Act) and the purpose of an investigator including reasons for his or her conclusions is to inform the Commission about what has been found as a result of the investigation. When the report is given to the employer (and to any relevant Minister: see s 53(3)(b)), the statute contemplates that an additional layer of information may be added by the Commission, including any comments the Commission wishes to make to the employer. The statutory context then contemplates an interactive process between the Commission, the employer and any health and safety committees of the employer, about what action, if any, can and should be taken in response to the investigator’s report.

81 As I have alluded to previously, the investigator’s role must be looked at in the overall context of the regulation of occupational health and safety issues as provided for in the Act. An investigator’s report is not to be seen as a final and binding determination of whether an employer has breached, or is in possible breach of, s 17 of the Act. The investigator does not need to go through the exercise indicated by Cummins J in Esso [2001] VSC 103. Esso involved a trial process leading to a potential fine, which obviously required particularisation of each element of the alleged offence said to have been committed by the defendant. However, this does not mean that the report did not need to include ‘conclusions’ which could properly inform the employer of the investigator’s view, but rather, that the obligation to include the conclusions is to be viewed in light of the objective of the giving of the report. The report is certainly not to be equated with the particulars of a criminal offence.

82 In any event, as I have indicated, an obligation to make ‘material’ findings of fact means those findings which the decision-maker considers material, rather than factual findings which are subsequently argued were ‘necessary’ or ‘objectively’ material: Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at [10], [33]-[34], [68]. If there is no finding expressed on a particular question of fact, such an omission might expose a decision-maker to attack on other grounds (for example, ignoring relevant material, taking into account irrelevant considerations, misunderstanding the nature of the task), but it will not be a breach of the statutory obligation to give reasons: Yusuf at [10], [37] and [69].

83 Therefore, the relevant question to ask here is whether Mr Smith, in the report, set out his conclusions, the reasons for the conclusions and the findings of fact which he considered material, and referred to the evidence on which those findings were based.

84 In my view, the reasons provided by Mr Smith rationally related to the evidence found during the investigation and are comprehensible in themselves. The report did set out Mr Smith’s conclusions, the reasons for the conclusions and the findings of fact which he considered material, and the evidence on which these findings were based.

• his reasons for that conclusion, being why he formed the opinion there was a breach, addressing each component of s 17;

• what the present arrangements were, both internally to Telstra and with the Council of Greater Geelong, about damaged and/or faulty pit lids and incidents involving pits and pit lids; and

• the absence of a system of scheduled maintenance, servicing or inspection by Telstra, and Telstra’s sole reliance on feedback from the public (either directly or indirectly through local councils) and infield staff.

87 Mr Smith did also note Telstra’s advice to him that any schedule inspection service would cost tens of millions of dollars and would not overcome the need for reactive repairs.

88 Therefore, in my view, Mr Smith undertook the task required of him and the report did comply with s 53(2) of the Act.

Could the report contain a finding of breach of s 17 by Telstra and was Mr Smith’s conclusion open to him

89 Telstra submitted that there is no power or requirement in s 41 or s 53 of the Act for an investigator to make a finding regarding the commission of breaches of the Act. It was contended that if an investigator formed the view that a provision of the Act is, or has been, contravened, then a number of options are open under the Act which are inconsistent with the legislature intending to give an investigator the power to make findings that the Act has been breached. Telstra contended that if an investigator considers that the Act is being breached, then they could issue a prohibition or improvement notice (under s 46 or s 47 of the Act respectively), or the investigator or Comcare could institute proceedings for a breach of the Act under s 77, seeking declarations of contraventions, civil penalties or criminal sanctions.

90 I do not agree with the Telstra’s principal submission that there is no power or requirement in s 41 or s 53 of the Act for an investigator to make a finding regarding the commission of breaches of the Act. Section 53 authorises and requires the investigator in a report to include his or her ‘conclusions from conducting the investigation’. There is no difference between a ‘finding’ and a ‘conclusion’ which is material for this case.

91 The question is whether the investigator was empowered to make a finding or conclusion as to the breach of s 17 of the Act by Telstra.

92 Telstra relied upon principle adopted in Brinsmead v Commissioner, Tweed Shire Council Public Inquiry (2007) 69 NSWLR 438, 443 to the effect that ‘the statutory power to inquire and report is not in the absence of clear words to be read as extending the power to make a finding of criminal guilt or other improper conduct’ (at [17]).

93 Accepting this principle, and accepting that the finding that Telstra breached s 17 is equivalent to ‘improper conduct’, I consider that in the context of the legislative scheme, Mr Smith could find and conclude, as he did, that Telstra breached s 17 of the Act, and include that conclusion in the report. This is for the simple reason that s 41 of the Act empowers an investigator to conduct an investigation concerning a breach or possible breach of the Act, and the report of that investigation (in the case where the investigator considers there to be a breach) must necessarily include his conclusion from conducting the investigation. This seems to me to be the clearest indication, without more, that an investigator is not only empowered to so conclude, but is under a duty to include in his or her report any conclusion reached as to breach, or possible breach, of the Act.

94 Further, I do not accept Telstra’s assertion that there was no material available to Mr Smith capable of satisfying him that there was a breach of s 17. There was such material available and Mr Smith properly took it into account.

95 Mr Smith examined each of the components of s 17. Mr Smith’s examination of the incident and other faulty pit lids discloses that he took account of the nature of the risks posed by the pits. He assessed the scope of the injury and risk by taking appropriate statements. The risks to the public were obvious, and required no further elaboration. Mr Smith addressed the material relating to the safety of people at or near the pits. On the facts as found by Mr Smith, it was apparent that Telstra relied solely on feedback provided by members of the public (either directly or through local councils), and Telstra’s in-field staff to identify damaged pits and pit lids requiring repair. Telstra advised that a scheduled inspection and maintenance program to manage the condition of its pits and pit lids would cost tens of millions of dollars and would not overcome the need for reactive repairs. However, Mr Smith concluded that, on the material before him, Telstra had not discharged its obligation to take reasonably practicable steps.

96 Therefore, in my view, the conclusion that Telstra breached s 17 of the Act was open to Mr Smith on the material before him, and was to be included in the report.

97 On the basis of the above conclusions, I need not address the issue of whether the report should be set aside even if Telstra was successful in some or all of its substantive arguments addressed above.

98 Nothing I have included within these reasons should be interpreted as an acceptance by me that Telstra has in fact breached s 17 of the Act. In these proceedings, Telstra’s main contention focussed upon the definition of ‘workplace’. In considering whether Telstra has been in breach of s 17 of the Act, the definition of ‘workplace’ is just one component of the operation of that provision. Necessarily, the scope of Telstra’s attack on the report of Mr Smith, seeking as it does to have the report at this stage set aside, is necessarily confined to the matters argued by Telstra before me and does not involve an assessment of whether the conclusion reached by Mr Smith was, on the merits, right or wrong.

99 At the conclusion of oral submissions, Telstra contended that if it was unsuccessful in this application in setting aside the report, it must provide a response, and if Comcare or the Commission were to take no further action, then the finding of Mr Smith will remain on the record.

100 This is undoubtedly true. However, apart from any publication of that finding under s 53(5) of the Act, to personnel within the Commission and Comcare, and as a result of this proceeding (in which no confidentiality order was sought), the report of the investigator will presumably have no further publication. In any event, the report stands as the opinion of one person, which Telstra can accept or reject. Telstra still has the opportunity to meet and address the views of Mr Smith. Telstra is unrestricted in how it deals with the conclusions reached in the report. While the report may be given to a confined number of third parties, the report is not meant to be a public document. If the report is not acted on by any of the respondents, this itself may assist in the impact it may otherwise have on Teltra’s reputation. In any event, assuming the report remains on the record, and assuming it may, to a very limited extent, affect Telstra’s reputation, this in itself does not form a basis to set aside the report on the grounds contended for by Telstra.

I certify that the preceding one hundred and one (101) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.

Counsel for the Applicant:	Mr B Walters SC with Mr G Livermore

Solicitor for the Applicant:	Freehills

Counsel for the Respondents:	Ms D Mortimer SC with Mr S J Maloney

Solicitor for the Respondents:	Minter Ellison

Date of Hearing:	16 July 2008

Date of Judgment:	10 December 2008

Federal Court of Australia

Telstra Corporation Ltd v Smith [2008] FCA 1859 (10 December 2008)