Inspector Barry Malone v Country Energy [2003] NSWIRComm 369 (7 November 2003)

Last Updated: 18 November 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Inspector Barry Malone v Country Energy [2003] NSWIRComm 369 revised - 14/11/2003

FILE NUMBER(S): IRC 2343

HEARING DATE(S): 16/09/2003

DECISION DATE: 07/11/2003

PARTIES:

PROSECUTOR

Inspector Barry Malone

DEFENDANT

Country Energy

JUDGMENT OF: Haylen J

LEGAL REPRESENTATIVES

PROSECUTOR

Mr R Reitano of counsel

SOLICITOR

Mr G Phillips

Carroll & O'Dea

DEFENDANT

Mr J Fernon of counsel

SOLICITOR

Mr M Bastick

Freehills

CASES CITED: Byrne v Garrison (1965) 523

Corporation of Hyde v Bank of England (1882) 21 Ch D 176

Fowler v Taylor (1957) VR 593

Inspector Belley v Freight Rail Corporation [2002] NSWIRComm 281

Roads Corporation v Gerkens (1993) 6 VAR 363

WorkCover Authority of New South Wales (Inspector Belley) v Rail Infrastructure Corporation (2001) 111 IR 442

WorkCover Authority of New South Wales (Inspector Frank Gilbert) v Energy Australia (formerly Sydney Electricity) [1998] NSWIRComm 592

LEGISLATION CITED: Energy Services Corporations Act 1995 No 95

Electricity Act 1945 (NSW)

Energy Services Corpoprations Act 1995 (NSW)

Energy Services Corporations (Dissolution of Energy Distributors) Regulation 2001 (NSW)

State Owned Corporations Act 1989 (NSW)

JUDGMENT:

- 19 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

CORAM: HAYLEN J

7 November 2003

Matter No. IRC 2343 of 2002

Inspector Barry Malone v Country Energy

Prosecution under s 15(1) of Occupational Health and Safety

Act 1983

JUDGMENT

[2003] NSWIRComm 369

1 The prosecutor has commenced proceedings under s 15(1) of the Occupational Health and Health Safety Act 1983 against the defendant, Country Energy. In the application for order, Inspector Malone alleged that the defendant, Country Energy, was a statutory body corporate established pursuant to the provisions of the Energy Services Corporation Act, 1995 and, being an employer on 27 April 2002 at the Orange electricity sub-station failed to ensure the health safety and welfare at work of all the defendant's employees and in particular, Phillip Dennis, Bradley Sinclair, Cec Davis, Ian Wallace and Nathan Offner in that the defendant failed to provide or maintain a system of work that was safe and without risk to health. The persons named were part of a maintenance team, and on the day in question it was alleged that there was an explosion at the sub-station during the performance of maintenance duties which caused injuries to Dennis.

2 Of significance to the present proceedings was the assertion that the defendant was the statutory successor of a previous body corporate, Advance Energy. Advance Energy was asserted to be a statutory State Owned Corporation by virtue of s 20A and Schedule 5 of the State Owned Corporations Act 1989 and by virtue of a merger which took place in 2001, Schedule 5 of the State Owned Corporations Act 1989 was amended by s 7(b) of the Energy Services Corporations Act 1995 which had the effect of creating a new statutory body corporate. Country Energy was alleged to have assumed all the rights, obligations and duties of Advance Energy and was taken to be the successor in law of that entity. At the date of the alleged breach, 27 April 2000, the defendant was known as Advance Energy.

3 By notice of motion, the defendant has challenged the jurisdiction of the Court to deal with the prosecution, essentially arguing that Country Energy was not the successor to Advance Energy for the purposes of the Occupational Health and Safety Act. The grounds supporting the notice of motion accepted that the defendant was a statutory State Owned Corporation constituted under the Energy Services Corporations Act 1995 and that the defendant's previous name was NorthPower but denying that the defendant had assumed any duty, obligation or liability of Advance Energy under the Occupational Health and Safety Act 1983. It was stated that the defendant could not be liable for any breach of the Occupational Health and Safety Act occurring on 27 April 2002 in respect of any act or omission of Advance Energy at the electricity sub-station at Orange.

4 The short point for the defendant was that the legislation that established the defendant and transferred the assets and liabilities from Advance Energy did not transfer any criminal liability of Advance Energy. The offence which was alleged to have occurred did so before the establishment of the defendant, Country Energy. The transfer of liabilities from Advance Energy to the defendant under the provisions of the Energy Services Corporations Act 1995 and the Energy Services Corporation (Dissolution of Energy Distributors) Regulation 2001 did not include a transfer of criminal liability.

5 In relation to the legislative framework, the evidence was that both the defendant and Advance Energy were statutory State Owned Corporations constituted by the Energy Services Corporations Act 1995 having been established as a State owned Corporation under Schedule 5 of the State Owned Corporations Act 1989. Advance Energy was dissolved on 1 July 2001 by s 14(4)(a) of the Energy Services Corporations Act and Clause 5 of the Energy Services Corporations (Dissolution of Energy Distributors) Regulation 2001. By s 15 of the Energy Services Act, staff, assets, rights or liabilities may be transferred by ministerial direction from an Energy Services Corporation that has been dissolved by the Energy Services Corporations Act, such as Advance Energy, to another Energy Services Corporation, such as Country Energy. "Liabilities" was defined by Clause 8, Schedule 3 of the Energy Services Corporations Act to mean "any liabilities, debts or obligations (whether present or future and whether vested or contingent)".

6 Under clause 7(1) of the Energy Services Dissolution Regulation:

... Country Energy may act in its own name as the universal successor of Great Southern Energy or Advance Energy or (if necessary), may act in the name of Great Southern Energy or Advance Energy.

Under clause 7(3) of the Energy Services Dissolution Regulation:

Country Energy may act in the name of Great Southern Energy or Advance Energy if it is necessary to do so under the law of any country:

(a) to perfect the transfer of any asset, right or liability of Great Southern Energy or Advance Energy; or

(b) to take, defend or maintain legal proceedings in connection with any such asset, right or liability.

The word "liability" in clause 7(3) had the same meaning as in Schedule 3 of the Energy Services Corporations Act. The Energy Services Corporations Act established Country Energy as a corporation: it did not transfer to Country Energy any criminal liability of Advance Energy.

7 In WorkCover Authority of New South Wales (Inspector Gilbert) v Energy Australia (formerly Sydney Electricity) (1998) 85 IR 99, and in Inspector Belley v Freight Rail Corporation [2002] NSWIRComm 281 the word "liabilities" in statutes such as the Energy Services Corporations Act and the Electricity Supply Act was construed. In the Energy Australia case, Hungerford J accepted that the word "liabilities" can embrace both criminal and civil responsibility but whether in any particular case "liability" embraced both criminal and civil responsibility depended upon the statutory context in which it was used. The issue was one of statutory construction.

8 In deciding whether criminal liability under the Occupational Health and Safety Act had been transferred when Energy Australia assumed the functions of Sydney Electricity, Hungerford J took into account the following factors:

· The whole language of schedule 3 of the Electricity Act 1945 was in terms of civil matters by its reference to "staff', "assets", "rights", consideration in terms of "the value or values at which the assets, rights or liabilities are transferred", stamp duty not being chargeable in respect of a transfer and provision for the Minister to give written notice confirming "a transfer of particular assets, rights or liabilities"; and

· The definition of "assets", "liabilities" and "rights" found in schedule 3 of the Electricity Act 1945 were in the language of civil as distinct from criminal matters. In relation to liabilities, the term had to be read in association with the words "debts" and "obligations", which were terms typically, if not solely, used to describe civil matters. The definition was exhaustive and not an inclusive definition.

From the above factors, Hungerford J concluded that there had been no transfer of criminal liability and the chain of succession from MetNorth 1 to MetNorth 2 to Energy Australia did not give rise to such a liability: the offence charged lapsed on the dissolution of Sydney Electricity.

9 In the Freight Rail case, the Court considered whether criminal liability under the Occupational Health and Safety Act had been transferred from the Freight Rail Corporation to Pacific National, where the transfer of assets and liabilities was to a new entity. The statutory provisions were almost identical in all material respects to those considered by Hungerford J in the Energy Australia case. The legislation was found to be virtually indistinguishable from that in the Energy Australia case and thus it was assumed that Parliament had accepted the previous judicial ruling and did not wish to depart from it.

10 In Roads Corporation v Gerkens (1993) 6 VAR 636, Eames J decided that criminal liability under the Occupational Health and Safety Act 1985 (Vic) had not been transferred from the Road Traffic Authority to the Roads Corporation. In this case, the Transport (Amendment) 1989 (Vic), which abolished the Road Traffic Authority, provided that the Roads Corporation became "the successor in law" of the Road Traffic Authority. The Supreme Court was of the view that criminal liability would normally not be expected to be transferred from one company to the company which purchased the business of the former company. It was thought untenable that the words "successor in law" were intended, in such a vague and general approach, to impose criminal liability on the new Corporation for offences committed by the previous Corporation.

11 In WorkCover Authority of New South Wales (Inspector Belley) v Rail Infrastructure Corporation (2001) 111 IR 442, the Court looked at the issue of the transfer of criminal liability between statutory corporations in a limited way. The question arose where two existing corporations amalgamated to form a new statutory corporation. The provisions of the amalgamating legislation transferred the assets, rights and liabilities of the two previous Corporations to the newly created Corporation. It was held that such a provision alone would be insufficient to transfer criminal liability from the previous Corporation to the newly created Corporation, but the statutory scheme went further and declared that the new statutory Corporation was taken for all purposes to be a continuation of the same legal entity as the previous two Corporations which were amalgamated to form the new Corporation. This was the type of provision found in the Energy Australia case as being effective to transfer criminal liability to the new statutory Corporation.

12 Applying these cases, it was submitted for the defendant that the legislative scheme did not result in the transfer of any criminal liability under the Occupational Health and Safety Act from Advance Energy to Country Energy and that all that was transferred were civil liabilities in a way very similar to that considered in the Energy Australia case. Similarly, it might be said that the legislative provisions were "too vague and general" to impose criminal liability upon Country Energy for any offence committed by Advance Energy.

13 The defendant then dealt with the provisions of Regulation 7(1) of the Energy Service Dissolution Regulation which uses the term "universal successor". The Regulation provided:

On and from the commencement of this regulation, Country Energy may act in its own name as the universal successor of Great Southern Energy or Advance Energy or (if necessary) may act in the name of Great Southern Energy or Advance Energy.

The term "universal successor" was not defined in either the Energy Services Dissolution Regulation or the Energy Services Act. Black's Law Dictionary defined "universal succession" as: "Civil Law. "Succession to an entire estate of another, living or dead (thou usu. the latter). This type of succession carries with it the predecessor's liabilities as well as assets". Pritchard in Leage's Roman Private Law stated:

The universal successor assumes the whole of the legal clothing of the person to whom he succeeds; steps, as it were, into his shoes. He takes over the rights and liabilities of every kind; his property (res singulie) and ieura in re aliena, the debts and other obligations (such as rights of action for damages for breach of contract) owing to him, and the debts and obligations that he owes.

14 The defendant submitted that the idea of the universal successor was that the particular party would take on the entirety of the civil rights and obligations that a party may have. The rights and obligations did not include criminal liability. To do so involved the transfer of the risk of sanction to a party that may have had no involvement in the offence that was committed, and make it liable for criminal sanctions for offences that the party had not committed. In using the term "universal successor", the legislature could only have intended that civil liabilities had been transferred to Country Energy from Advance Energy. This was particularly the case where the legislation could have adopted other phrasing if it intended to transfer criminal liability as well.

15 For the prosecutor, attention was drawn to the provisions of s 14 of the Energy Act. Under this provision, the Governor could, by regulation, amend Part 1, 1A or 2 of Schedule 1 by omitting the corporate names of one or more Energy Services Corporations to be dissolved by the Act. On the day on which such a regulation under the section took effect, the Energy Services Corporations whose corporate names were omitted by the regulation were dissolved and the State Owed Corporations Act, 1989 was amended by omitting those names from Schedule 5. It was emphasised that in s 14(5) the following was provided:

The regulations may contain provisions of a savings or transitional nature consequent on the dissolution on an energy services corporation under this section.

16 Pursuant to s 14(4) of the Energy Services Corporations Act 1995, the Energy Services Corporation (Dissolution of Energy Distributors) Regulation 2001 was made. That regulation commenced on 1 July 2001.

Clause 7 of this Regulation provided as follows:

(1) On and from the commencement of this regulation, Country Energy, may act in its own name as the universal successor of Great Southern Energy or Advance Energy of (if necessary) may act in the name of Great Southern Energy or Advanced Energy.

(2) Sub-clause (1) applies for all purposes, including for the purposes of the rules of private international law.

(3) Without limiting sub-clause (1), Country Energy may act in the name of Great Southern Energy or Advance Energy if it is necessary to do so under the law of any country:

(a) to perfect the transfer of any asset, right or liability of Great Southern Energy or Advance Energy, or

(b) to take, defend or maintain legal proceedings in connection with any asset, right or liability.

(4) For the purpose of this clause, Country Energy is authorised to use the seals of Great Southern Energy and Advance Energy.

(5) In this clause, asset, right and liability have the same meanings as they have in Schedule 3 of the Act.

17 The prosecutor accepted that the issue raised by the defendant in this case was to be resolved by ascertaining the intention of the legislature in dissolving Advance Energy and creating the new entity, adopting the approach in WorkCover Authority of New South Wales (Inspector Belley).

18 It was submitted that the statutory transitional provision differed markedly from those which were considered in the Rail Infrastructure Corporation case, the Energy Australia case and the Freight Rail Corporation case. Here, Clause 1 of Regulation 7 provided that Country Energy may act in its own name as the "universal successor" of Advance Energy. The notion of "universal" succession was to be contrasted to that of "successor" simpliciter. It involved the concept of the successor succeeding in its entirely to another (see Osborn's Concise Law Dictionary, (7th ed at 334)) or one who succeeds to all the rights and powers of a former owner (see Black's Law Dictionary, 7th ed). The purpose of "universal" succession was to place the successor, with regard to all its powers and all its property, entirely in the same position as its predecessor (see Corporation v Hyde v Bank of England (1882) 21 Ch D 173). It was submitted that the passage quoted by the defendant from Pritchard's Leage's Roman Private Law supported the contention that a universal successor assumes all of the legal identity of the predecessor. The definition is not confined to civil rights as suggested by the defendant. Importantly, the regulation maker chose not to describe Country Energy as simply a "successor", and the phrase "universal successor" therefore had to be given work.

19 It was then submitted that paragraph 3 of Clause 7 of the Regulation was important for determining the intention behind sub-clause 1. Bearing in mind that sub-clause 1 contemplated that Country Energy was the universal successor, it had to be presumed that sub-clause 1 had a wider effect than sub-clause 3, which specifically dealt with civil liability. On the submissions of the defendant, sub-clause 3 had no wider effect than sub-clause 1 of Regulation 7: thus, sub-clause 1 would be rendered otiose. It had to be presumed that sub-clause 1 of Regulation 7 was intended to be of wider effect than sub-clause 3.

20 Sub-clause 2 of Regulation 7 was also important. It operated so that sub-clause 1 of Clause 7 of the Regulation operated "for all purposes" and was therefore not limited and certainly was not limited by reference to the purposes identified in sub-clause 3. Had the regulation makers sought to limit the width of the Regulation in the way submitted by the defendant, then the words of wide import found throughout the Regulation would, strictly speaking, be unnecessary.

21 The Energy Australia case considered another statutory provision which provided that on and from dissolution of the first body, the new body was "taken for all purposes ... to be a continuation of, and the same legal entity of the previous body". That was said to give rise to a clear statutory intention to transfer criminal liability of one body to another. This was the approach also adopted in the Rail Infrastructure Corporation case.

22 It was then submitted that although different words were considered in the Energy Australia case and in the Rail Infrastructure case, it was instructive that the reasoning of the Court turned upon the descriptor "for all purposes" and the notion of continuity of the relevant legal entities. In this case, by reference to the same descriptor "for all purposes" and the notion "universal succession", the same legislative intent is to be found in the Regulation. That intent is that for all purposes Country Energy takes on all the legal identity, together with all the relevant rights and obligations, of Advance Energy.

23

DELIBERATION

24 The defendant placed some emphasis on the approach of Eames J in the Roads Corporation case. In that case, the previous Road Traffic Authority was abolished and the Roads Corporation was created and became the successor in law to the Road Traffic Authority, by virtue of s 232 of the Transport (Amendment) Act 1989. His Honour was of the view that although the new Corporation had a wider role, that role encompassed the functions previously exercised by the Authority.

25 His Honour's decision was also influenced by two further provisions namely, s 232(e) and (f), which were in the following terms:

(e) all actions causes of action proceedings and claims for compensation (including any claim for arbitration thereon or appeal therefrom or proceeding thereunder or matter arising thereout) immediately before 1 July 1989 pending or existing by or against a former Authority shall not abate or be discontinued or be in any way prejudicially affected by reason of this Part but may be continued prosecuted and enforced by or against the relevant successor Corporation as they might have been by or against the former Authority if this Act had not been passed and not further or otherwise.

(f) any penalty forfeiture or punishment incurred or imposed by or under any Act repealed by this Act may be imposed enforced or recovered by or against the relevant successor Corporation in like manner and to the like extent as the same might have been imposed enforced or recovered by or against the relevant former Authority if the Transport (Amendment) Act 1989 had not been passed, and any proceeding or remedy in respect thereof may be instituted continued or enforced by or against the relevant successor or Corporation.

26 His Honour noted that the proceedings had not been commenced and therefore were not pending on 1 July 1989. Therefore, s 233(e) did not come into operation and any liability carried through to the Corporation had to be as a result of it being a "successor in law" to the Road Traffic Authority by virtue of s 232. His Honour then turned his attention to the meaning of the phrase "successor in law" noting that it was not defined and that the words were not necessarily used as a term of art. His Honour then stated the question which arose as whether it was a recognised legal incidence of successorship that the successor assumes responsibility for the criminal offences committed by its predecessor. He noted that neither counsel referred him to any authority on this point and his research had not been fruitful. His Honour therefore approached the fact of succession as being determined by the words of s 232. There was no legislative indication, however, as to the effect of the declaration of succession made by s 232. Having reached this point, his Honour then stated:

One would not normally expect that criminal liability of a company would be transferred to a company which purchased the business of the former. Until liquidated, the former company still existed and would be the appropriate body to be prosecuted for any offence if committed. Indeed, after liquidation the company could, in certain circumstances, be revived for the purpose of proceedings being taken against it: for example by s 571(1) of the Corporations Law; see Re P J Staunton Pty Ltd (1992) 9 ACSR 302. The new company which took over the business of the former proprietor company as a separate legal personality, committed no offence.

His Honour's analysis, however, did not stop at this point.

27 Having considered industrial cases on successorship and what was said to be the social purpose of such legislation and the need to give effect to and to secure the protection of legislation making successors liable for the award obligations of the originally bound company, his Honour then stated:

In the absence of direct authority, and notwithstanding the social benefit to which the Occupational Health and Safety Act is directed, I consider that it would be untenable to conclude that the words "successors in law" were intended, by such a vague and general approach, to impose criminal liability upon the Roads Corporation for offences committed by the RTA. I can see no basis for importing such meaning into the words of s 232 and if such intention was meant to be conveyed it is entirely inconsistent with the more limited approach to the succession of civil liability imposed under s 233.

His Honour said that the Transport Act made clear, by s 233(3), that civil liability of the Road Traffic Authority did not become the liability of the Corporation unless proceedings had been commenced by 1 July 1989. It would therefore be an anomalous situation if criminal liability was to extend further than civil liability and, in the absence of express words to that effect, his Honour would not construe s 232 so as to produce a result with respect to criminal law which Parliament had expressly not permitted to occur with respect to past civil obligations of the Road Traffic Authority.

28 His Honour then turned attention to the provisions of s 233(f) noting that this was the only reference made to the transfer of criminal liabilities from the Road Traffic Authority to the Corporation and it related not to the transfer and continuance of charges but to the liability of the Corporation to satisfy any penalties or judgments imposed on the Road Traffic Authority. His Honour concluded that s 233(f) demonstrated that Parliament did turn its mind to the question of whether the Corporation would assume any responsibility for the criminal liabilities of the Road Traffic Authority. It provided for that to occur only in limited circumstances. This provision strengthened his Honour's view that neither s 232(b) nor s 233(e) imposed criminal liability on the Corporation for offences committed by the Road Traffic Authority and that criminal responsibility related only to payments of unpaid penalties which had, in limited circumstances, to be borne by the Corporation. In this way, Eames J was able to discern the legislative intention.

The provisions to which his Honour drew attention give a much clearer indication of the legislative intention than revealed in the defendant's submissions.

29 The provisions dealt with by Eames J are materially different to the legislative scheme which governs the entities involved in this case. Both parties sought to obtain assistance from judgments of this Court involving the dissolution of a statutory body which had been charged with an offence under the Occupational Health and Safety Act, 1983.

Firstly, reference may be made to the judgment of Hungerford J in WorkCover Authority of New South Wales (Inspector Rech) v Sydney Market Authority (1997) 82 IR 134. The Sydney Market Authority was a statutory corporation representing the Crown but was proposed to be dissolved by Act of Parliament in circumstances where there would be a sale of its business undertaking to private enterprise. It was common ground that if the prosecution case was not finalised before the dissolution of the Authority, then the charges would abate and effectively lapse as there would be no defendant and the position would be indistinguishable from that where there was a death of a natural person. The statutory provisions dealing with the sale of the business and the dissolution of the Authority provided that the assets, right and liabilities of the Authority became the assets, rights and liabilities of the Crown. These words were held to deal with civil matters only and in the absence of an express provision or a provision by necessary implication dealing with criminal liability of the Authority, none could be transferred to the purchaser of the business or any other entity. In such circumstances, it was concluded that the legislature had chosen not to maintain the entity for the purposes of finalising criminal charges.

30 In the WorkCover Authority of New South Wales (Inspector Belley) v Rail Infrastructure Corporation case, the Court dealt with a situation of some similarity to the present circumstances. At paragraph [90], at page 473, those circumstances were described and developed as follows:

A case more closely resembling the circumstances which arise here is WorkCover Authority (NSW) (Inspector Gilbert) v Energy Australia - formerly Sydney Electricity (1998) 85 IR 99. That case involved a prosecution under s 15(1) of the Act concerning a linesman formerly employed by Sydney Electricity which had become Energy Australia. On a plea of guilty, Energy Australia had no prior convictions but Sydney Electricity, the original defendant and its predecessor, the Sydney County Council, did have prior convictions. The prosecution sought that the prior convictions be taken into account against Energy Australia. Objection was taken by the defendant which submitted that there was not a mere name change to Energy Australia but there was created a separate legal entity. Here, there had been amalgamations of a number of legal entities and a separate management structure with a new focus on safety and a new corporate culture. Hungerford J held that, whether the charges continued after Sydney Electricity was dissolved depended upon the statutory transitional provisions under the Energy Act by which the new entity assumed the functions of Sydney Electricity. His Honour noted that the ordinary rule was that on the dissolution of a defendant statutory corporation to a criminal charge, the charge abates and effectively lapses because there is no continuing legal person in existence against which proceedings may be maintained: Rech. Where the legislature creates a successor statutory corporation, the question of whether any criminal liability of the former body is assumed by the new body will depend on the terms of the stature effecting the dissolution on one hand, and the creation on the other. His Honour then stated (at p 113):

In other words, if the legislature by express enactment provides the original and the successor bodies are one and the same legal person, then it would follow that an undetermined criminal charge against the former would continue against the latter unaffected by the fact that the former was indeed dissolved. It may even follow that proceedings in respect of a criminal charge for an offence committed by the former body could be instituted against the new body even after the former had been dissolved, provided, of course, that any statutory limitation period did not otherwise operate as a bar. Again, the reason would be the new body was created with the same legal personality as the former body.

His Honour accepted that, where transitional provisions allowed a 'liability' of the previous entity to be transferred to the new entity, the word 'liability' was apt to embrace both criminal responsibility and civil responsibility: Byrne v Garrisson [1965] VR 52 at 528. The appropriate meaning and whether there should be an extended meaning will depend on the statutory context in which it is used. Importantly, in that case, his Honour was required to consider yet another body within the statutory framework where there was a subsequent dissolution and the constitution of another statutory State owned corporation. The transitional provisions provided that on and from the dissolution of the first body, the new body was 'taken for all purposes ... to be a continuation of, and the same legal entity as' the previous body. His Honour was of the view that such a statutory transitional provisional evinced a clear intention to transfer the criminal liability of the new body.

31 In the Energy Australia case it seems that Hungerford J was much influenced by the fact that the statutory scheme simply did not constitute in any way MetNorth 1 as the same legal entity as Sydney Electricity and in fact they both continued with a simple transfer of staff and assets. The statutory scheme in the present matter needs therefore to be considered in the light of these approaches and what was actually transferred and in what circumstances.

At this point, it is of some relevance that the dissolution of Advance Energy was simply a means by which to enlarge the area of operation of Country Energy. As demonstrated in Roads Corporation v Gerkens, specific statutory provisions may indicate a limited transfer of liabilities, excluding criminal liability. There are no provisions in the present legislative scheme under consideration which reflect the Victorian case and this is not a case like the Sydney Markets where the statutory body was dissolved, its business sold to private enterprise and therefore the criminal liability abated. In my view, this case comes down to whether the legislative scheme, properly construed, simply transfers civil liabilities or whether there is a clear indication that both civil and criminal liability is transferred.

32 The legislative scheme in the present matter is complicated by the existence of a number of pieces of legislation and regulations made thereunder having a role to play in the dissolution of existing entities and the creation of new entities. It was common ground that Advance Energy and Country Energy were energy distributors created under s 7 of the Energy Services Corporations Act 1995 and were considered to be State Corporations under the State Owned Corporations Act 1989. The next step appears to be that under the provisions of the Energy Services Corporations Act 1995, s 13 permitted the creation of additional energy services corporations and s 14 permitted the dissolution of existing energy services corporations. It was said by the defendant that the joint operation of these provisions allowed firstly, Advance Energy to be dissolved pursuant to s 14 and the expanded Country Energy to be created by s 13. Under s 14(5), regulations may contain provisions of a savings or transitional nature consequent upon the dissolution of any energy services corporation under the section. In addition, s 15(1) gave the Minister a discretion to direct, by order in writing, that any specified staff, assets, rights or liabilities of an energy services corporation that had been dissolved by this Act be transferred to such other energy services corporation or to such other person or body acting on behalf of the Crown as specified in the Order. So far, this legislative scheme by referring generally to assets and liabilities permitted either civil or criminal liabilities to be transferred (see the approach of Hungerford J in Energy Australia).

33 Pursuant to s 14, it appears that the Energy Services Corporations (Dissolution of Energy Distributors) Regulation 2001 was promulgated. Clause 7 of the Regulation was entitled, "Country Energy may act in its own name or in name of Great Southern Energy or Advance Energy". Sub-clause 1 of Clause 7 provided that on and from the commencement of the regulation, Country Energy may act in its own name as the "universal successor" of Great Southern Energy or Advance Energy (or, if necessary, may act in the name of Great Southern Energy or Advance Energy). Under sub-clause 2, it was provided that sub-clause 1 applied for "all purposes, including for the purpose of the rules of private international law". Under sub-clause 5, in the clause, the words "asset, right and liability" had the same meaning as they had in Schedule 3 to the Act. In turn, Schedule 3 entitled, "Transfer of staff, assets, rights and liabilities" defined "liabilities" as meaning "any liabilities, debts or obligations (whether present of future and whether vested or contingent).

34 The next relevant step, which only came to light just prior to the commencement of the hearing, was publication of a Notice of the making of an Order by the Minister for Energy under the Electricity Supply Act 1995. In the Government Gazette of 29 June 2001, the Minister for Energy gave notice of the making of an order under s 85 of the Electricity Supply Act 1995 directing the transfer of all assets, staff, rights and liabilities of Advance Energy and Great Southern Energy to Country Energy to take effect on the beginning of the day on 1 July 2001. The Order itself defined the word "assets" "rights" and "liabilities" to have the same meaning as they had in Schedule 4 to the Electricity Supply Act. It also defined "business" to mean all the activities and operations of Advance Energy and Great Southern Energy as at the transfer day and included the activities and operations of any subsidiaries of Advance Energy and Great Southern Energy. Under Clause 4 of the Order, all staff, assets, rights and liabilities of the former electricity distributors (defined to include Advance Energy) were transferred to Country Energy. Clause 5 was an acknowledgement by Advance Energy that it had agreed with Country Energy and the Minister had agreed that the transfer of assets, rights and liabilities to be effected upon the making of this Order, "is the supplier of a going concern within the meaning of sub-division 38-J of the GST Act", a reference to Commonwealth legislation, namely, A New Tax System (Goods and Services Tax Act), 1999. Under Clause 6, it was acknowledged in sub-clause (iii) that on the making of the Order, and by virtue of the operation of the Order, Advance Energy supplied to Country Energy all the things that were necessary for the continued operation of the enterprise comprising the business (itself being a reference to all the activities and operations of Advance Energy).

35 Section 85 of the Electricity Supply Act provided under sub-section 1 that the Minister may direct by order in writing that any specified staff, assets, rights and liabilities of the distribution network service provider whose distribution district is varied be transferred to such other distribution and network service provider as is specified in the Order. Under sub-section 2, such an order may be made on such terms and conditions as specified in the Order. Under sub-section 3 Schedule 4 applied to the transfer of staff, assets, rights and liabilities under the Section. As already noted, under Schedule 4 to the Electricity Supply Act Clause 8 defined "liabilities" to mean any liabilities or obligations (whether present or future and whether vested or contingent).

36 From this myriad of provisions, in my view the clearest indication of the legislative intent is to be found in Clause 7 of the Energy Service Corporations (Dissolution of Energy Distributors) Regulation 2001. Bearing in mind that these provisions allow amalgamation and re-organisation between distributors, it is significant firstly that Country Energy was described as "the universal successor" of both Great Southern Energy and Advance Energy. Secondly, the acknowledgement in the Minister's Order that the business is an on-going and continuing business helps strengthen the conclusion that both civil and criminal liabilities have been transferred to the new body.

I accept the force of the prosecutor's submission that the term "universal successor" in the Regulation is something more than a "successor" simpliciter. As far back as 1882, Fry J found that when a district of a local Board was incorporated as a Borough, all the property of the Board vests at once in the Corporation without the necessity of any conveyance or transfer. In reaching this view, Fry J was able to say that it was obvious that the general scope and intention of the clauses was to make the Corporation "the universal successor to the local Board - to place it as regards all its powers, and as regards all its property also, entirely in the same position as the local Board". I do not see anything in the various provisions and definitions that were provided to the Court which would detract from that proposition in this case: Country Energy stepped into the shoes of Advance Energy for the purposes of continuing the business of that entity and to act in its name. Interestingly, Country Energy could take proceedings in the name of Advance Energy under Clause 7(3) of the Regulation.

37 I also find it persuasive that Clause 7 of the 2001 Regulation not only made Country Energy the universal successor of Advance Energy but did so, "for all purposes, including for the purposes of the rules of private international law". While this wording is not identical to that found in the Rail Infrastructure case, its similarity is striking. In that case, the Rail Infrastructure Corporation was taken for all purposes, including the rules of private international law to be a continuation of the same legal entity as the two amalgamating bodies. In the terminology of the legislation of relevance in this case, the phrase "... is taken for all purposes including the rules of private international law" is repeated, the description of the continuation of the previous body is different but there is the acknowledgement that the business continues in the hands of the successor and although there is the absence of the declaration that it is "the same legal entity", nevertheless Clause 7 of the Regulations permits Country Energy to act in the name of Advance Energy and thereby seems to encompass the same concept or something very close to it. There is also force in the submission for the prosecutor that Clause 7, sub-clause 3 deals with the transfer of assets, rights and liabilities while sub-clause 1 deals with Country Energy as being the universal successor. Sub-clause 1 cannot be simply performing the same task as sub-clause 3: indeed, sub-clause 3 operates "without limiting sub-clause (1)".

Overall, I am satisfied that the legislative intention is that the defendant, Country Energy, has had transferred to it, amongst other things, the criminal liability of Advance Energy. The result is that the defendant is properly named in the charge and the Court may proceed to hear that charge against the defendant.

38 Having reached this conclusion, the orders sought by the defendant in its notice of motion are refused and the motion is dismissed. I will hear the parties on the question of costs should they be unable to reach agreement in that regard.

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LAST UPDATED: 14/11/2003