Casting the net wide: Information gathering powers of the NSW WHS regulator

Perilya Limited v Nash [2015] NSWSC 706

WHAT YOU NEED TO KNOW

• Under s 155 of the Work Health and Safety Act 2011 (NSW) (the Act), a regulator may serve a written notice on a person to give information, provide documents or give evidence if the regulator has reasonable grounds to believe that the person is capable of giving information, providing documents or giving evidence in relation to a possible contravention of the Act or that will assist the regulator to monitor or enforce compliance with the Act.
• The Supreme Court of NSW has broadly interpreted the information-gathering powers of the regulator under s 155, requiring a company to provide un-redacted records of board meeting minutes and other company information.
• Be aware that a regulator can request your company's board minutes and other communications. Such documents may establish an affirmative act, such as remedial action taken following an incident, or a negative, such as a failure to take adequate action to address safety matters.
• The fact that the registered office of a company is in another jurisdiction is not a decisive consideration when determining the scope of the regulator's powers. In this case, the plaintiff, whose registered office was in Perth, was directly involved in the operation of a mine in NSW. The fact that its head office was in another jurisdiction did not put it beyond the reach of the regulator.
• Provided the regulator has a reasonable basis to believe that a person is capable of giving information, providing documents or giving evidence in relation to a possible contravention of the Act, or that will assist to monitor or enforce compliance, if a parent company controls or is directly involved in the operation of a subsidiary, the parent company will need to comply with the notice.

WHAT YOU NEED TO DO

• Assess the control and involvement a parent company has in the safety operations of a subsidiary located in another state or territory.
• Ensure the officers of the parent company are fully briefed on their safety obligations and of the fact that their board meeting minutes, communications and emails, etc, may be required to be disclosed in the event of a safety incident including at the operations of a subsidiary in another state or territory. 

Background

Perilya Limited (the plaintiff) was a member of a group of companies called the Perilya Group, a metals and mining exploration company with operations throughout Australia and overseas.

The plaintiff had a registered office in Perth and was the holding company of Perilya Broken Hill Limited ("PBHL", the Broken Hill mine).

On 8 June 2012, Mr Mark Pollard, a worker at the Broken Hill mine, fell 14 metres down a mine shaft and was seriously injured.

A similar incident had occurred in 2008, when a large counterweight fell down a mine shaft.

The Notices

The Department of Trade, Investment, Regional Infrastructure and Services (the Regulator), the regulator under the Work Health and Safety Act 2011 (NSW) (the Act) investigated the incident. As part of its investigation, an investigator appointed under the Act issued a notice under s 155 of the Act directing the plaintiff to produce:

• the minutes of all Board of Directors meetings between 24 May 2008 and 30 December 2012; and
• any reports, memorandums or other documents prepared between 24 May 2008 and 30 December 2012 for the purpose of advising the Board of Directors of matters relating to safety performance at the mine.

The plaintiff provided documents in response to the notice but they contained a number of redactions.

On 30 November 2013 the investigator issued a second notice requesting un-redacted copies of the board meeting minutes and documents produced.

The plaintiff did not produce the documents in un-redacted form, saying that the redacted material did not relate to governance of safety and contained information that was commercially sensitive, confidential and subject to legal professional privilege.

On 19 December 2013 the investigator issued a third notice to produce the un-redacted documents. The plaintiff again failed to produce the documents.

The Relevant Legislation

Under s 155(1) and (2) of the Act, the regulator may serve a written notice on a person to produce documents if the regulator has reasonable grounds to believe that a person is capable of giving information, providing documents or giving evidence in relation to a possible contravention of the Act or that will assist the regulator to monitor or enforce compliance with the Act.

A person must not, without reasonable excuse, refuse or fail to comply with a requirement under s 155(5). The evidential burden to provide a reasonable excuse is placed on the accused (s 155(6)).

The Local Court Decision

On 10 January 2014, the plaintiff was charged in the Local Court with two counts of failing to comply with a notice issued under s 155 of the Act in relation to the November and December notices.

The plaintiff was found guilty of two offences of failure to comply with Notices to Produce under s 155(5), as the investigator had reasonable grounds to believe that the board meeting minutes might provide material relevant to a possible contravention of the Act or assist in the monitoring or enforcement of compliance with the Act. This was because:

•  The investigator believed the documents were relevant to the 2012 incident because they related to matters such as decision making and control over work at the mine. The investigator wanted to determine what control the Board of Directors or other decision makers may have had at the mine in 2008 and what action was taken after the 2008 incident.
• The documents could provide information regarding any relationship between the 2008 incident and the 2012 incident including whether any recommendation made following the 2008 incident was the subject of a direction or action by the plaintiff prior to the 2012 incident.

Magistrate Goodwin imposed a fine of $20,000 for each of the two offences and made a costs order against the company of $74,281.

The Supreme Court application

The plaintiff made an application to the Supreme Court seeking an order setting aside the convictions, leave to appeal from the sentences imposed and an order remitting the matter back to the Local Court to vary the sentence.

The Plaintiff's Submissions

The documents in dispute

The plaintiff argued that the notices were so broadly expressed that they were beyond the scope of s 155 and that the Magistrate erred in law in not finding that the notices were beyond power and therefore invalid.

The plaintiff asserted the power under s 155 contained the following limitations:

• The power was contained in the NSW Act and confined to NSW.
• There was a jurisdictional limitation on the power of the Regulator to require the production of the disputed documents. It was argued that s 155 contained words of limitation requiring the documents to relate to health and safety matters that arise in or are related to NSW. The power did not extend to documents not relating to health and safety matters in NSW. 

Extraterritorial Activities of the Company

The plaintiff argued that the notices were invalid, stating that company information in relation to operations outside NSW and other information such as mergers and acquisitions, equity raising and debt financing, could not be said to be “in relation to a possible contravention” of the Act or “to monitor or enforce compliance” with the Act.

The Respondent's Submissions

The respondent argued that two preconditions had to be met under s 155: that the person issuing the notice must be the Regulator and the Regulator must have reasonable grounds to believe that the person the subject of the notice is capable of providing documents in relation to a possible contravention of the Act or that will assist the regulator to monitor or enforce compliance with the Act.

The respondent further argued that considerations of commercial sensitivity would not constitute a reasonable excuse to not comply with a s 155 notice because the Act provided safeguards in relation to such information.

The respondent further submitted that the provision required the Regulator to obtain evidence of positive acts and omissions. This meant that the absence of information relating to health and safety in the documents was a matter that could relate to a possible contravention of the Act.

The Supreme Court Decision

Justice Hall of the Supreme Court held that the Magistrate did not err at law. The notices issued under s 155 were valid and satisfied the conditions in s 155.

Broad powers to request information

The Supreme Court found that a regulator has broad functions and information-gathering powers under s 155.

The Supreme Court stated that s 155 is enlivened where the regulator has reasonable grounds to believe:

• that the "person is capable" of providing information including documents;
• the "information", "documents" and/or "evidence" concerns or relates to "a possible contravention of this Act"; and/or
• the giving of information, documents or evidence will assist the regulator to monitor and enforce compliance with the Act.

The Supreme Court noted that the word "compliance" embraced past conduct as well as forward-thinking actions regarding the minimisation or elimination of WHS risks.

It was found that the wording of the notices was clear in their description of which documents were required.

A "wide net"

It was found that there is no requirement under the Act for the regulator to know in advance the actual contents of the documents sought. It is sufficient that a belief has been formed on reasonable grounds concerning the subject matter in s 155(1).

The Supreme Court further noted that documents the subject of a belief on reasonable grounds extended to documents that were capable of identifying a negative act or omission, such as a failure to take action to address a safety risk. The Supreme Court stated that "the net may need to be cast in wide terms" to obtain documents that may relate to compliance under the Act.

Scope of the powers – application to Board minutes and other documents

The Supreme Court dismissed the plaintiff's argument that the notices were so broadly expressed that they exceeded the power under s 155.

The Supreme Court noted that in a case involving two serious accidents, investigations may look into any acts, omissions or systemic issues in a particular workplace and its operating entity. Board minutes of a company or companies involved in or responsible for such matters may be relevant due to what they record or fail to record. In the present case, issues such as the knowledge and response of the Board of Directors on health and safety issues and the allocation of financial resources, may be relevant to compliance.

Extra-territorial application of the provision

The Supreme Court concluded that in order for the regulator to properly discharge its obligations under the Act, it was necessary to obtain information relevant to mine safety at the Broken Hill Mine held by the holding company. The Supreme Court found that although the company's registered office was in Perth, it was directly involved in the operations at Broken Hill, including in relation to work health and safety, and had ultimate control over the Broken Hill Mine.

Further, the plaintiff's corporate knowledge in relation to mine safety issues in other states and countries was significant and important to the safe operation of the Broken Hill Mine.

The plaintiff's control of and involvement with the Broken Hill mine meant that the NSW law applied to it.

Confidentiality and legal professional privilege

The fact that some documents contained information relevant to matters other than mine safety did not cause the notices to become invalid.

The Act ensured the preservation of confidentiality by providing a safeguard in relation to how the regulator could use this information.

While the Act did not require the plaintiff to disclose documents subject to legal professional privilege, the plaintiff did not provide any evidence to support its claim for legal professional privilege.

Outcome

The Supreme Court dismissed the appeal against conviction and the penalties imposed by the Magistrate and refused leave to appeal the costs order.