Llandilo Staircases Pty Ltd v Workcover Authority of New South Wales (Inspector Parsons) [2001] NSWIRComm 64 (12 April 2001)

Last Updated: 9 May 2001

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Llandilo Staircases Pty Ltd v WorkCover Authority of New South Wales (Inspector Parsons) [2001] NSWIRComm 64

FILE NUMBER(S): IRC 6649

HEARING DATE(S): 24/07/2000

DECISION DATE: 12/04/2001

PARTIES:

APPELLANT

Llandilo Staircases Pty Limited

RESPONDENT

WorkCover Authority of New South Wales (Inspector Karen Louise Parsons)

JUDGMENT OF: Wright J President Walton J Vice-President Hungerford J

LEGAL REPRESENTATIVES

APPELLANT

Mr G D Wendler of counsel

Solicitor: Mr W J Henty

W J Henty & Co

RESPONDENT

The Hon J W Shaw QC and Mr A Searle of counsel

Solicitor: Ms S Reid

WorkCover Authority of New South Wales

CASES CITED: Blue Mountains Disability Services Ltd v Stinson (1999) 92 IR 246

Carrington Slipways Pty Ltd v Callaghan [1985] 11 IR 467

Chief of the General Staff v Stuart (1995) 58 FCR 299

Drake Personnel Ltd, t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432

Griffin v Marsh (1994) 34 NSWLR 104

Hawthorne (Department of Health) v Morcam Pty Ltd (1992) 29 NSWLR 120

Haynes v C I & D Manufacturing Pty Ltd (1994) 60 IR 149

He Kaw Teh v The Queen (1985) 157 CLR 523

Horizon Cold Storage Constructions Pty Ltd v WorkCover Authority of New South Wales (1999) 100 IR 372

Kirkby v A & M I Hanson Pty Ltd (1994) 55 IR 40

Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380

Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464

McCarthy v Sell & Parker Pty Ltd [2000] NSWIRComm 273

Millar v Ministry of Transport (unreported, NZCA, 23 October 1986)

Proudman v Dayman (1941) 67 CLR 536

R v Ewart (1905) 25 NZLR 709

R v Strawbridge [1970] NZLR 909

R v Wampfler (1987) 11 NSWLR 541

Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31

Schultz v Tamworth City Council (1995) 58 IR 221

State Rail Authority of New South Wales v Dawson [1990] 37 IR 110

Van Rooy Machinery Pty Ltd v WorkCover Authority of New South Wales (Inspector Wolf) (2000) 97 IR 436

Von Lieven v Stewart (1990) 21 NSWLR 52

Wong v Melinda Group Pty Ltd (1998) 82 IR 118

WorkCover Authority of New South Wales (Inspector Fester) v Lantry (unreported, CIM 94/1163, 9 December 1994)

WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 100 IR 64

WorkCover Authority of New South Wales (Inspector Robins) v Ecolab Pty Ltd (1999) 90 IR 413

WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89

LEGISLATION CITED: Crimes Act 1900 s 556A

Crimes (Sentencing Procedure) Act 1999 s 10

Industrial Relations Act 1996 s 188(1) s 189(1) s 197(1)

Justices Act 1902

Occupational Health and Safety Act 1983 s 15(1) s 47(4)

Workers Compensation Act 1987 s 155(1) s 155(3) s 161(1)

Workplace Injury Management and Workers Compensation Act 1998 s 144 s 245(4)

JUDGMENT:

- 25 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

FULL BENCH

CORAM: WRIGHT J, President

WALTON J, Vice-President

HUNGERFORD J

Thursday, 12 April 2001

Matter No IRC 6649 of 1999

LLANDILO STAIRCASES PTY LIMITED v WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR KAREN LOUISE PARSONS)

Application to extend time to appeal, for leave to appeal and appeal against orders made by a Local Court constituted by an industrial magistrate, Ms D Sweeney, on 10 November 1999 under the Workers Compensation Act 1987.

JUDGMENT OF THE COURT

[2001] NSWIRComm 64

1    The matter before the Court is an appeal, subject to leave being allowed, against orders made on 10 November 1999 by a Local Court, constituted by Ms D Sweeney sitting as an industrial magistrate, for a breach of s 155(1) of the Workers Compensation Act 1987 as to the requirement on an employer to obtain and maintain a policy of insurance for workers' compensation purposes. Her Worship convicted the appellant, Llandilo Staircases Pty Limited, and imposed a fine of $3,000.00 plus court and professional costs of $354.00. The present appeal challenged the conviction, necessarily as including the penalty, and, in particular, the failure by her Worship to allow relief under s 556A of the Crimes Act 1900 (see now s 10 of the Crimes (Sentencing Procedure) Act 1999) so as to avoid conviction. The respondent, WorkCover Authority of New South Wales (Inspector Karen Louise Parsons), resisted the appeal.

2    Having in mind the orders were made by her Worship on 10 November 1999 so that any appeal pursuant to s 189(1) of the Industrial Relations Act 1996 was to be filed within 21 days, that is by 1 December 1999, the appellant filed on 3 December 1999 an application to extend the time to appeal, together with the proposed notice of appeal. On 16 December 1999, Wright J, President granted the extension of time application, against the opposition of the respondent. In so doing, his Honour noted that the appellant had given the respondent early notice after her Worship's decision of its intention to appeal in a situation where the appellant had to make a commercial decision in light of the amount of money payable by it, including for the worker injured in the accident giving rise to the prosecution, which information was not obtained until 2 December 1999; the appeal was brought the next day, only two days after the expiration of the statutory limitation period. The notice of appeal is, therefore, competent as being within the time allowed to appeal.

3    The essential questions raised for determination in this appeal were twofold: first, the nature of the subject offence created by s 155(1) of the Workers Compensation Act as to whether on its proper construction it was one of absolute liability so as to make irrelevant the defence of reasonable and honest mistake; and, second, whether the exercise of discretion at first instance miscarried by not affording the appellant the benefit of s 556A of the Crimes Act so as to avoid its conviction and consequent penalty.

4    The notice of appeal, correctly in our view, sought leave to appeal. However, during the argument of counsel for the appellant, Mr G D Wendler, he suggested it was an appeal as of right without the need for leave. The appeal was brought pursuant to s 197(1) of the Industrial Relations Act, which appears in Pt 7 of Ch 4 thereof, and which section is made applicable by s 245(4) of the Workplace Injury Management and Workers Compensation Act 1998 to an appeal from a Local Court to this Court for offences, as here, against the Workers Compensation Act. As such, we are satisfied that it is an appeal under Pt 7 of Ch 4 so that s 188(1) of the Industrial Relations Act operates to require leave to appeal: Horizon Cold Storage Constructions Pty Ltd v WorkCover Authority of New South Wales (1999) 100 IR 372 at 375 and also see Drake Personnel Ltd, t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at p 446, and Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at p 465 in relation to the similar situation of an appeal authorised by the combined operation of s 47(4) of the Occupational Health and Safety Act 1983 and s 197(1) of the Industrial Relations Act in respect of offences against that former Act. In Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 in [8], a Full Bench confirmed the decision in Blue Mountains Disability Services Ltd v Stinson (1999) 92 IR 246 at p 250 of the need for leave to be granted in s 197 appeals in light of the recent amendments to the Justices Act 1902.

5    As to the first question concerning the issue of law of the statutory construction of s 155, counsel for the respondent, the Hon J W Shaw QC who appeared with Mr A Searle of counsel, accepted leave was appropriate because it was an important issue which should be dealt with by a Full Bench, particularly as it involved the correctness of the earlier decision made by the Chief Industrial Magistrate, Mr G A Miller, in WorkCover Authority of New South Wales (Inspector Fester) v Lantry (unreported, 94/1163, 9 December 1994). We agree and so affirm our ruling indicated at the conclusion of the argument on appeal that leave to appeal should be granted on the construction point.

6    However, the parties were at odds whether leave should be granted concerning the non-application by her Worship of s 556A of the Crimes Act. It has been properly said "that the application of s 556A represents very much the exercise of a classic discretion": see Van Rooy Machinery Pty Ltd v WorkCover Authority of New South Wales (Inspector Wolf) (2000) 97 IR 436 at p 440 in [22] per Hungerford J.

7    The utilisation of the beneficial provisions of the section to a defendant has been considered by the Court both at first instance and at appellate level in relation to offences under the Occupational Health and Safety Act. For instance, in Schultz v Tamworth City Council (1995) 58 IR 221 at p 229 Fisher CJ commented that the use of the provision "ought to be rare indeed" and that approach was found to be pertinent and appropriate by Wright J, President in WorkCover Authority of NSW (Inspector Robins) v Ecolab Pty Ltd (1999) 90 IR 413 at pp 430-431. Again, in WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89 at p 101 a Full Court commented that "the operation of s 556A of the Crimes Act to such proceedings would seldom be appropriate". A recent consideration of the section and its application arose in WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 100 IR 64 where a Full Bench reviewed the authorities and concluded that the exercise of the discretion "must be considered as extraordinary and highly exceptional" (100 IR at p 72). One of the authorities cited by their Honours was Wong v Melinda Group Pty Ltd (1998) 82 IR 118, in which s 556A was applied, as illustrating "the rare cases ... where s 556A might be applied in occupational health and safety prosecutions". That view was affirmed by a Full Bench in McCarthy v Sell & Parker Pty Ltd [2000] NSWIRComm 273 in [9] where their Honours observed that the approach was appropriate to apply not only in proceedings before this Court but also in proceedings before an industrial magistrate sitting in a Local Court (see also Riley v Australian Grader Hire in [11]-[13]).

8    Although, of course and as we have said, those views were expressed in relation to offences under the Occupational Health and Safety Act, we consider that they are appropriate for application to the present offence under the Workers Compensation Act which relevantly concerns legislation about a closely related subject-matter, namely, workplace safety and the compensable protection of injured workers. Seen in the way we have described the operation of s 556A the comments by Ms Sweeney here fall to be assessed. Her Worship said:

... I agree that it's not the worst end of a wilful disregard but I think the company just did not take sufficient care to comply with that obligation and so even though it's their first offence and even though they relied to an extent on (an insurance broker), it's not appropriate to apply section 556A.

9    In declining leave to appeal, a Full Bench relevantly commented for present purposes in Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at p 382:

... it will be relevant to consider whether an appeal raises substantial and important considerations. The issues raised by an appellant as to the public interest considerations under s 188(2) need to be evaluated in the light of the nature of the issues raised in the appeal, including whether the appeal raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application.

10    The discretion exercised by her Worship, consistent with our review of the evidence, disclosed no appellable error calling for review. Adopting the approach in Knowles v Anglican Church, with which we respectfully agree, we have determined not to grant leave to appeal on the s 556A point.

11    The directly relevant provisions of s 155 of the Workers Compensation Act (see now the comparable provisions of s 144 of the Workplace Injury Management and Workers Compensation Act in respect of insurance for any period after 30 September 1999) are:

155 Compulsory insurance for employers

(1) An employer (other than a self-insurer) shall obtain from a licensed insurer, and maintain in force, a policy of insurance that complies with this Division for the full amount of the employer's liability under this Act in respect of all workers employed by the employer and for an unlimited amount in respect of the employer's liability independently of this Act (but not including a liability for compensation in the nature of workers compensation arising under any Act or other law of another State, a Territory or the Commonwealth or a liability arising under the law of another country) for any injury to any such worker.

Maximum penalty: 200 penalty units or imprisonment for 6 months, or both.

...

(3) In any proceedings for an offence against subsection (1), proof:

(a) that an employer, not being a self-insurer, who has been served pursuant to section 161(1) with a notice requiring the employer to produce for inspection (or to supply particulars, specified in the notice, of) a policy of insurance obtained by the employer and in force at a specified date or between specified dates has not so produced (or so supplied specified particulars of) any such policy so in force, and

(b) that the time for compliance with the notice has expired,

shall be sufficient evidence unless the contrary is proved, that at that date or between those dates the employer had failed to comply with subsection (1).

...

12    Both at first instance and on appeal, the parties approached the matter as being confined to the legal question, putting aside the s 556A point with which we have dealt, concerning the construction of s 155 and we will, therefore, so deal with it. Suffice it to say that the appellant was charged with failing between 5 December 1996 and 17 February 1997 to obtain from a licensed insurer a policy of insurance that complied with Div 1 of Pt 7 of the Workers Compensation Act for the full amount of its liability under the said Act in respect of all workers employed by it for any injury to any such worker. It seems that the appellant commenced business in late-1996 under its corporate name and style, having previously traded as Llandilo Staircases Carpentry and Joinery, and engaged an insurance broker to arrange various insurance policies, including a policy for workers' compensation cover. The broker performed his tasks in part but, apparently, no policy for workers' compensation was effected even though a cover note for insurance was operative for the period from 4 November 1996 to 4 December 1996 and the appellant assumed the broker would effect continuing insurance cover. The appellant was concerned whether it was so covered when on 17 February 1997 one of its employees, an apprentice John Hadchiti, injured his finger in a machine. The absence of an insurance policy thereby was exposed and the subject charge laid.

13    Ms Sweeney reviewed in detail the reasoning of the Chief Industrial Magistrate in Lantry. Her Worship then concluded :

Having turned my mind to the reasoning of his Worship I am persuaded by his reasoning and by his conclusion and I have concluded that the offence under s 155 is an offence of absolute liability ... therefore the defence of honest and reasonable mistake of fact is not available to the defendants in respect of this offence.

Her Worship found the relevant elements of the offence established, including that there was not in existence a policy of insurance for workers' compensation within the relevant period, and so was satisfied that the information had been proven beyond a reasonable doubt; conviction and penalty followed.

14    Mr Wendler's fundamental submission was that her Worship erred in law in finding the defence of honest and reasonable mistake was not available to successfully avoid a charge under s 155 because, as she held, the section created an offence of absolute liability. Counsel submitted that, but whilst conceding there was no obligation upon the prosecution here to prove mens rea or any guilty intention as an essential element because the offence was at least one of strict liability, the following propositions supported the appellant's contention that honest and reasonable mistake of fact was a legitimate defence to the charge -

(a) The purpose of s 155(1) is to compel an employer to raise and maintain a policy of workers' compensation insurance which provides a financial safety net for both the worker and the community.

(b) There would not be any practical difficulty upon the prosecution in mandating that knowledge be an ingredient of the offence pursuant to s 155(1).

(c) The legislature could not have intended that hapless victims be exposed to a term of prisonment as a result of reliance upon inadequate, negligent or fraudulent professional advice.

(d) There is no evidence that putting an employer under strict liability will assist the enforcement of the legislation.

(e) Section 155(1) requires that the employer have knowledge of the existence of a policy of insurance. The words "shall obtain ... and maintain in force" suggest that it is incumbent upon the prosecution to demonstrate beyond a reasonable doubt that the employer knew that there was no policy of insurance in force.

For the defence of honest and reasonable mistake of fact as being available, Mr Wendler relied on the decision of the High Court in Proudman v Dayman (1941) 67 CLR 536. Counsel emphasised by reference to sub-s (3) of s 155 that the words in para (b) thereof, that is "unless the contrary is proved", demonstrated that the concept of "reasonableness" was thereby imported into the offence created by sub-s (1) of the section so as to make available the defence referred to in Proudman v Dayman. Counsel summarised his submission in the following way :

Sections 155(1) and 155(3) of course must be read together. They cannot be in any shape or form divorced from each other. They are inextricably connected.

The critical words in 155(3) are "shall be sufficient evidence unless the contrary is proved". The words "unless the contrary is proved", it is our submission, are not inconsistent with the raising of a positive defence.

In other words it is clear from the statutory language especially the words in 155(1) "unless the contrary is proved" that it was in the contemplation of the legislature that a positive defence would be available to a particular alleged offender.

That defence, in the circumstances, it is submitted is what sometimes in a defence has been described as the Proudman v Dayman defence or indeed any other common law defence such as for insanity, duress or any of that style of defence. That is contemplated by the statutory language, unless the contrary is proved.

15    In accepting that the outcome of this appeal depends upon the true construction of s 155, senior counsel for the respondent relied upon the relevant principles stated by the High Court in He Kaw Teh v The Queen (1985) 157 CLR 523. Mr Shaw referred also to R v Wampfler (1987) 11 NSWLR 541, Von Lieven v Stewart (1990) 21 NSWLR 52, Hawthorne (Department of Health) v Morcam Pty Ltd (1992) 29 NSWLR 120 and Griffin v Marsh (1994) 34 NSWLR 104 for the proposition that "whether the offence is one of strict or absolute liability (and hence whether the defence of honest and reasonable belief applies) is a matter for the construction of the relevant statutory provision and the intention of the legislature". Having regard to the principles stated in the authorities, senior counsel summarised the position in favour of the unavailability here of the defence relied upon by the appellant, in the following way -

(a) The purpose of s 155(1) is to compel an employer to raise and maintain a policy of workers' compensation insurance which provides a financial safety net for both the worker and the community.

(b) The language of s 155(1) is in mandatory and clear terms.

(c) It is clear that placing an employer under absolute liability will assist in the enforcement of the legislation and in overcoming the mischief at which the section is aimed.

(d) The appellant submits that the words "shall obtain ... and maintain in force" suggests it is incumbent upon the prosecution to demonstrate beyond reasonable doubt that the employer knew that there was no policy of insurance in place. The respondent submits that on any proper construction those words in fact mean that the requirement of that section is in absolute terms.

(e) Her Worship was correct to hold there is no requirement of mens rea in relation to s 155(1).

(f) As a consequence, the appellant does not have available to it the defence of honest and reasonable mistake of fact.

16    In supporting the December 1994 decision of the Chief Industrial Magistrate in Lantry, Mr Shaw acknowledged that since then the legislature added a term of imprisonment as an option, either with or without a fine, in the penalty regime. To the extent the appellant here relied upon the provision of a gaol sentence as transforming the offence from one of absolute liability to one of strict liability so as to make relevant the defence of honest and reasonable mistake of fact, Mr Shaw submitted that a term of imprisonment was neither decisive nor a real indicator in this case as "historically the availability of imprisonment for these offences has waxed and waned. Sometimes it is there and sometimes it is not". For that purpose, senior counsel traced the statutory history of the relevant provisions. In any event, Mr Shaw referred to the decision of a Full Court of the Federal Court in Chief of the General Staff v Stuart (1995) 58 FCR 299 for the view that the availability of a prison sentence did not affect an offence of absolute liability so as to enable the defence of honest and reasonable mistake of fact.

17    It is convenient at this point to refer to the decision of the Chief Industrial Magistrate in Lantry, as relied upon by Mr Shaw but which Mr Wendler submitted was wrongly decided. Unfortunately, the decision of his Worship in Lantry is not reported; as it discloses, in our respectful view, a most reasoned approach to the present issue we think it worth repeating in some detail. In referring to the accepted classifications of statutory offences, as formulated in He Kaw Teh, his Worship said :

Since the decision of the High Court in He Kaw Teh v The Queen (1985) CLR 523, the following tripartite classification of statutory offences has become accepted:

(i) Offences where there is an original obligation on the prosecution to prove mens rea;

(ii) Strict liability offences where mens rea is presumed to be present, subject to the honest and reasonable mistake of fact defence; and

(iii) Absolute liability offences where guilt is established by proof of the objective ingredients of the offence.

His Worship then reviewed the objective purpose of the Workers Compensation Act, in which s 155 appears, and commented :

The main purpose or object of the legislation is "to provide an efficient, equitable and affordable workers compensation system, to promote the rehabilitation of injured workers and to reinforce measures to improve safety and minimise accidents in the workplace." (Hansard, 28 May 1987, Second Reading Speech Legislative Council). Of particular concern to the Government of the day was the growth of high workers compensation costs.

Workers compensation legislation is social legislation. The assumption behind the legislation is that industrial society creates inevitable hazards and therefore society ought to bear the cost by spreading the loss. Therefore, the Act creates a compulsory insurance scheme for employers to contribute to the scheme to minimise the cost to the community.

After referring to various authorities, some of which were referred to us, his Worship reasoned in the following way in concluding that s 155(1) created an absolute offence :

What intention is to be inferred therefore from the use of the words by the Legislature of "shall obtain ..., and maintain in force," which are without qualification. The emphatic nature of the words, taken together with the deeming provision in ss (3), the subject matter of the statute and the purpose of the section which is to ensure that an employer obtains the necessary policy of insurance, the breach of which is sanctioned by a maximum penalty of $20,000 (or $10,000 in the Local Court) with no provision for imprisonment, (in other words a regulatory offence rather than an offence of a truly criminal nature), leads me at first to the conclusion that the offence created by s 155 falls within category (iii) above, an absolute offence to which the defence of honest and reasonable mistake does not apply.

In offences of a regulatory nature such as this social legislation, the presumption in favour of implying the defence will be a weak one: See Proudman v Dayman (1941) 67 CLR 536 at 540, per Dixon J.

The object of the section is to ensure that employers have the necessary policy of insurance within what is a compulsory insurance scheme. That objective cannot be frustrated by a defence which is constituted by a belief that such a policy is held when it is not, a belief that could be negatived by appropriate enquiries to the insurance company as to whether the appropriate policy is in fact held or not. The legislation has not specifically provided for the circumstances in which the defendant's acts may be excused. This is legislation of a type which imposes an absolute liability in the interests of the community and injured workers. These matters reinforce my initial view that the section creates an absolute offence. The common law defences are therefore not available.

18    We are able immediately to comment that the approach of his Worship in Lantry is one which commends itself to us, taking as it did the categories of offences from He Kaw Teh, as acknowledged by the Court of Criminal Appeal in Wampfler (11 NSWLR at p 546) by applying also the New Zealand Court of Appeal decision in Millar v Ministry of Transport (unreported, 23 October 1986) and R v Strawbridge [1970] NZLR 909, in relation to what is clearly an offence directed to industrial conditions in terms of health or safety in the workplace: see in those latter respects as to the purpose of legislation as supporting the creation of an absolute offence Sweet v Parsley [1970] AC 132 at p 163 per Lord Diplock and He Kaw Teh (157 CLR at pp 594-595) per Dawson J. The approach of Watson J in the seminal case of Carrington Slipways Pty Ltd v Callaghan [1985] 11 IR 467 at pp 469-470 in construing the statutory purpose of s 15(1) of the Occupational Health and Safety Act as imposing absolute liability on an employer to guarantee, secure or make certain the health, safety and welfare at work of all employees is instructive also on this point. His Honour's approach in Carrington Slipways v Callaghan has been followed and developed in subsequent cases: see State Rail Authority of New South Wales v Dawson [1990] 37 IR 110 at pp 120-121, Kirkby v A & M I Hanson Pty Ltd (1994) 55 IR 40 at pp 49-50, Haynes v C I & D Manufacturing Pty Ltd (1994) 60 IR 149 at pp 156-157 and the expansive reasoning of the Full Bench in Drake Industrial (90 IR at pp 449-456).

19    A useful starting point for considering the provisions of s 155 and the nature of the offence it creates in terms of established principle is the decision of the High Court in Proudman v Dayman. There, their Honours considered a charge under a South Australian statute which prohibited the act of permitting an unlicensed person to drive a motor vehicle on a road; it was held that proof the defendant knew the driver was unlicensed was unnecessary for the charge to be made out. As Dixon J said (67 CLR at p 542) :

There is nothing in the language of the section to suggest that the consent (of the defendant so as to incur liability) must be directed to the failure of the driver to hold a licence, and the form in which the section is cast indicates the contrary. It is the driving which must not be permitted, that is, unless the driver holds a licence.

Dixon J earlier stated (67 CLR at p 540) the "general rule an honest and reasonable belief in a state of facts which, if they existed, would make the defendant's act innocent affords an excuse for doing what would otherwise be an offence". However, his Honour then added (67 CLR at p 540) :

The strength of the presumption that the rule applies to a statutory offence newly created varies with the nature of the offence and the scope of the statute. If the purpose of the statute is to add a new crime to the general criminal law, it is natural to suppose that it is to be read subject to the general principles according to which that law is administered. But other considerations arise where in matters of police, of health, of safety or the like the legislature adopts penal measures in order to cast on the individual the responsibility of so conducting his affairs that the general welfare will not be prejudiced. In such cases there is less ground, either in reason or in actual probability, for presuming an intention that the general rule should apply making honest and reasonable mistake a ground of exoneration, and the presumption is but a weak one.

Indeed, there has been a marked and growing tendency to treat the prima facie rule as excluded or rebutted in the case of summary offences created by modern statutes, particularly those dealing with social and industrial regulation. But, although it has been said that in construing a modern statute a presumption as to mens rea does not exist (per Kennedy LJ, Hobbs v Winchester Corporation (1910) 2 KB 471 at p 483), it is probably still true that, unless from the words, context, subject matter, or general nature of the enactment some reason to the contrary appears, you are to treat honest and reasonable mistake as a ground of exculpation, even from a summary offence.

In that same case, McTiernan J relevantly observed (67 CLR at p 543) :

In my opinion the defendant was rightly convicted because upon the true construction of the section her guilt did not depend on the question whether she knew or believed on reasonable grounds that the driver was not the holder of a licence. She was guilty because it was proved that he was not the holder of a licence and that she did permit him to drive the car on a road.

The mens rea justifying the conviction consisted of the intent to do an act which is prohibited by s 30, that is, to give permission to a person who was not the holder of a licence to drive the car on the road.

20    In the seminal case of He Kaw Teh (157 CLR at pp 528-530) Gibbs CJ (with whom Mason J agreed) dealt with the presently relevant fundamental questions of law in the following way :

However the provision has to be read in the light of the general principles of the common law which govern criminal responsibility. The relevant principle is stated in Sherras v De Rutzen ([1895] 1 QB 918 at p 921), as follows :

"There is a presumption that mens rea, an evil intention, or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence; but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject-matter with which it deals, and both must be considered."

There has in the past been a tendency in Australia to regard this presumption as only a weak one, at least in the case of modern regulatory statutes: Proudman v Dayman ((1941) 67 CLR 536 at p 540); Bergin v Stack ((1953) 88 CLR 248 at p 261). However, the principle stated in Sherras v De Rutzen has more recently been reaffirmed in the Judicial Committee and the House of Lords (Lim Chin Aik v The Queen [1963] AC 160 at p 173; Reg v Warner [1969] 2 AC 256 at p 272 and Gammon Ltd v Attorney-General (Hong Kong) [1985] AC 1 at pp 12-13) and in this Court: Cameron v Holt ((1980) 142 CLR 342 at pp 346, 348). The rule is not always easy to apply. Its application presents two difficulties - first, in deciding whether the Parliament intended that the forbidden conduct should be punishable even in the absence of some blameworthy state of mind and secondly, if it is held that mens rea is an element of the offence, in deciding exactly what mental state is imported by that vague expression.

...

The second matter to be considered is the subject-matter with which the statute deals. Paragraph (b) of s 233B(1) and the other paragraphs of that sub-section deal with a grave social evil which the Parliament naturally intends should be rigorously suppressed. ...

A third consideration is that which was mentioned in Lim Chin Aik v The Queen ([1963] AC at p 174) :

"It is pertinent also to inquire whether putting the defendant under strict liability will assist in the enforcement of the regulations. That means that there must be something he can do, directly or indirectly ... which will promote the observance of the regulations. Unless this is so, there is no reason in penalizing him, and it cannot be inferred that the legislature imposed strict liability merely in order to find a luckless victim."

See also Sweet v Parsley ([1970] AC 132 at p 163) and Gammon Ltd v Attorney-General (Hong Kong) ([1985] AC at p 14).

Dawson J, in a separate judgment to the same effect, added (157 CLR at pp 594-595) :

Resort must then be had to the subject-matter or character of the legislation. Attempts have been made to categorize those offences which have been regarded as absolute, but the result is only helpful in a broad sense and the recognized categories cannot be regarded as exhaustive. It is generally accepted that statutes which create offences for the purpose of regulating social or industrial conditions or to protect the revenue, particularly if the penalty is monetary and not too large, may more easily be regarded as imposing absolute liability. This approach may be displaced if to regard an offence as one of absolute liability could not promote the object of the legislation by making people govern their behaviour accordingly: see Lim Chin Aik v The Queen ([1963] AC 160). Conduct prohibited by legislation which is of a regulatory nature is sometimes said not to be criminal in any real sense, the prohibition being imposed in the public interest rather than as a condemnation of individual behaviour. On the other hand, if a prohibition is directed at a grave social evil, the absolute nature of the offence may more readily be seen, particularly if proof of intent would be difficult and would represent a real impediment to the successful prosecution of offenders.

21    As we have intimated, both parties accepted that the relevant principles of law in ascertaining the nature of the s 155 offence were those as stated in He Kaw Teh. It is convenient, as counsel did before us, to illustrate the proper approach from He Kaw Teh by reference to how the decision has been since applied. In Wampfler, the Court of Criminal Appeal applied the decision to hold that the offence of publishing an indecent article, in terms of the statute prohibiting such publication, was not an offence of absolute liability; if the accused had an honest and reasonable belief in innocence then the prosecution had the onus of negativing that belief. Street CJ, with whom Hunt and McInerney JJ agreed, said (11 NSWLR at pp 546-548) :

He Kaw Teh is authority for the proposition that for the purpose of considering criminal intent, statutory offences fall into three categories:

(1) Those in which there is an original obligation on the prosecution to prove mens rea.

(2) Those in which mens rea will be presumed to be present unless and until material is advanced by the defence of the existence of honest and reasonable belief that the conduct in question is not criminal in which case the prosecution must undertake the burden of negativing such belief beyond reasonable doubt.

(3) Those in which means rea plays no part and guilt is established by proof of the objective ingredients of the offence.

...

... On its face the statute does not expressly require knowledge on the part of the accused person and there is an inadequate basis for construing it so as to import an express obligation on the prosecution in this regard. The next question is whether such an offence is absolute so as to involve guilt upon the proof by the Crown of the objective facts, irrespective of the belief of the accused person, or whether it falls in the second category - the "middle course" as Gibbs CJ described it (at 533) - recognised in He Kaw Teh.

There is a discernible trend in modern authorities away from construing statutes as creating absolute liability and towards recognising statutory offences as falling within the middle or second category - that is to say the category in which the prosecution must negative the honest and reasonable belief in innocence if there is sufficient basis advanced to be capable of raising a reasonable doubt of such belief.

In that case, shortly stated, the offence was committed where "a person ... publishes an indecent article". Street CJ reasoned that the offence was not absolute by observing (11 NSWLR at p 545) that the "aspect upon which ... the fate of this appeal turns is that involved in the adjective 'indecent'. ... There is no express indication in the statute in relation to the mental element if any that must be proved in order to establish an offence ... ." We think an apparent purpose of the statute in Wampfler was no doubt the protection of public morals which, in our view, necessarily involves the mental element of knowledge on the part of the defendant that what is being published is indeed immoral. That was the approach in the New Zealand case of R v Ewart (1905) 25 NZLR 709, applied in Wampfler, in which Williams J said (25 NZLR at p 728) - "If the essential part of a prohibited act is its immorality, there must, in my opinion, be some immoral mental condition on the part of the perpetrator to justify a conviction".

22    In Griffin v Marsh (34 NSWLR at pp 107-108), Hunt CJ at CL (whose reasons were adopted by James J) drew the following two propositions from He Kaw Teh :

(1) The common law presumption is that an essential ingredient of every offence is that the defendant knew of the wrongfulness of his act unless the statute excludes that presumption either expressly or by necessary implication.

(2) In determining whether the common law presumption has been displaced in the particular case, regard should be had to:

(a) the words of the statute itself;

(b) the subject matter with which the statute deals; and

(c) whether an absolute liability will assist in overcoming the mischief at which the statute is aimed.

Applying the settled approach laid down in the authorities, we propose to resolve this appeal by considering those three aspects as referred to by Hunt CJ at CL. We emphasise that that too was the process followed by the Chief Industrial Magistrate in Lantry.

23    Firstly, the statute here in s 155(1), in terms, contains the following essential ingredients for compliance -

· An employer (other than a self-insurer)

· shall obtain from a licensed insurer, and maintain in force,

· a policy of insurance that complies with the stated conditions as to workers' compensation and for liability independently of the statute

· in respect of all workers employed by the employer for any injury to such worker.

24    The central requirement of the section, it is plain, is that an employer shall obtain, and maintain in force, a policy of insurance answering the stated description in respect of all workers employed - failure to do so, without more, is a breach of the section. In the light of those plain words, then, can it be said there is any room for any presumption that mens rea or some mental element of an exculpatory nature is implied in what the section otherwise makes an offence? We think not. Either the employer has or has not obtained the relevant policy of insurance required by the section; if not, the offence on its face is complete once the prosecution establishes that objective fact. That was the position found here by the learned industrial magistrate. Indeed, the appellant did not challenge the fact it had no policy of insurance in force during the relevant period. Its case was that it relied upon the insurance broker to arrange the insurance and the failure of that arrangement was not attributable to the appellant so it was able to rely on the common law defence that it reasonably, but mistakenly, believed a policy had been effected.

25    Section 155(3), from its terms, is plainly directed to the provision of an evidentiary facility to enable the prosecutor to prove sufficiently a breach of sub-s (1) of the section. The facility so prescribed relies on the power of an authorised person, such as the respondent here, to require by written notice under s 161(1) of the Workers Compensation Act an employer to produce for inspection the policy of insurance obtained. Where the employer does not do so and the time for compliance with the notice has expired then proof of that fact "shall be sufficient evidence, unless the contrary is proved" that the employer had failed to comply with s 155(1). It is obvious, we think, that the contrary evidence referred to is directed to the employer showing that such a policy is otherwise in force notwithstanding its non-production pursuant to s 161(1); the contrary evidence, however, is not directed to any extent to any mental element, explanation or other excuse for the employer not having a policy as required by s 155(1).

26    In our view, the words of the statute in s 155(1) do not depend upon the issue whether the appellant reasonably believed an insurance policy had been effected by the insurance broker and was in force; they depend upon whether in fact the appellant had obtained such a policy which was currently in force. Indeed, it seems to us, the provisions of s 155(3) reinforce that view by limiting any contrary evidence to the existence of a relevant policy of insurance. It therefore follows, we think, that the presumption allowing the common law defence of mens rea or guilty knowledge is displaced. We are satisfied too that the words of the section strongly point to the creation of an offence of absolute liability and as not providing any room for the defence of honest and reasonable mistake of fact.

27    The second criterion to consider as affecting the common law presumption is the subject-matter with which the Workers Compensation Act deals. The long title to the statute is "to provide for the compensation and rehabilitation of workers in respect of work related injuries ... ." It then proceeds to detail the liability of employers to compensate employees who sustain injury, compensation benefits, common law remedies and the rehabilitation of injured workers. An obviously important part of the legislative scheme is insurance, including as presently relevant compulsory insurance for employers, and statutory funds for licensed insurers, self-insurers, insurers' contribution fund, defaulting insurers and insurers' guarantee fund.

28    The legislation is, in our opinion, and as the Chief Industrial Magistrate found in Lantry, social legislation concerned with the regulation of industrial conditions in terms of workplace safety. As such, the presumption of the common law defence of honest and reasonable mistake for a breach of legislation of that type is weak: see Proudman v Dayman (67 CLR at p 540) and He Kaw Teh (157 CLR at pp 549-595). It follows, in our view, that this aspect of the subject-matter of the legislation does not encourage to any degree the application of the common law presumption against the consequences of what otherwise appears to be an absolute offence.

29    Next, and thirdly, the appellant denied the absolute liability of s 155(1) by the submission that so categorising the offence would not overcome the mischief at which the statute was aimed. Whilst that is clearly a legitimate argument against an offence being absolute and so as to make available the common law presumption, we do not consider it has been made out here. The mischief at which the section is directed, we are satisfied, is the employment by employers of workers where the employer does not have the compulsory policy of insurance in respect of workers' compensation liability and exposure to damages at common law. The legislature's response has been to enact s 155 of the Workers Compensation Act so as to require employers to take out the necessary policy of insurance, thereby protecting the compensable benefits due to injured workers and without the cost to the industrial community under some other arrangement. In other words, the identified mischief has been met by requiring a policy of insurance to be obtained and maintained in force at all relevant times. That objective, we think, would be defeated, certainly materially frustrated, if a defaulting employer could plead that it was someone else (say, an insurance broker) who had been instructed to take the necessary steps for insurance cover. The force of this argument may be more readily appreciated when in the instant case the appellant could have contacted the insurance company direct to ascertain whether it indeed had a policy of insurance in force; that it did not do so, but preferred to rely upon the insurance broker, demonstrates how easily an employer could avoid the sanction for non-compliance with the compulsory insurance provision. That situation, in our view, could not be tolerated because it would very much frustrate avoidance of the mischief to which the section is directed.

30    In the result, we are satisfied that s 155(1) of the Workers Compensation Act creates an offence of absolute liability. The common law presumption is not available to avoid a charge for a breach of the section and, specifically, the defence of honest and reasonable mistake of fact is irrelevant. The appeal must fail.

31    We make the following orders -

1. Leave to appeal is granted in relation to the construction of s 155 of the Workers Compensation Act 1987, otherwise leave is refused.

2. The appeal is dismissed.

3. The appellant is to pay the respondent's costs in an amount as agreed or assessed.

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LAST UPDATED: 12/04/2001