In an important legal decision for organisations on the impact of chain of responsibility, the City of Glen Eira (Glen Eira) was recently acquitted in the Dandenong Magistrates Court of all charges alleged against it on the basis that it had taken all reasonable steps to prevent overloading of garbage trucks in connection with its domestic waste collection service.
The decision provides the first real indication as to what amounts to "reasonable steps" for the purposes of ensuring compliance with the mass limit provisions of the Road Safety Act 1986 (Vic) (the RSA), also known as the 'chain of responsibility' legislation.
Under the chain of responsibility legislation, any person using road transport as part of their business, including consignors, packers, loaders, drivers, operators and consignees can be held responsible for breach of vehicle mass and dimension limits or load restraint requirements (amongst other things).
Following a random audit of private landfills in 2008, VicRoads prosecuted a number of municipalities, transport operators, truck drivers and landfill operators in respect of overloaded garbage trucks in breach of the vehicle mass limit provisions of the RSA.
The penalties, if found guilty of exceeding vehicle mass limits, vary depending on whether the breach is characterised as minor, substantial or severe. Several municipalities and waste transport operators charged face in excess of 100 separate offences, exposing them to maximum penalties of up to $2 million.
Glen Eira was charged with 88 offences of the RSA which were alleged to have occurred between the 5th and 31st March 2008. Glen Eira pleaded "not guilty" to all charges.
The contractor engaged by Glen Eira to undertake its waste collection services was also charged. The contractor pleaded "guilty" and was fined $20,000. A number of subcontractor drivers were also charged, found guilty and fined.
Glen Eira properly relied on a statutory defence available under the RSA arguing it had taken all 'reasonable steps' to prevent the offences from being committed.
In order to prove the 'reasonable steps' defence, Glen Eira led evidence relating to its contractual relationship with its waste collection contractor and the actions it took to monitor mass limit compliance.
- In selecting a contractor to undertake waste collection services on its behalf Glen Eira had engaged in a comprehensive tender process which included an analysis of the resources proposed in the tender against the predicted total waste to be collected.
- The tender that was ultimately accepted contained an error which overestimated the capacity of the trucks proposed by the contractor in its tender which was not discovered by Glen Eira until early 2008.
- Glen Eira had incorporated compliance assurance conditions into its waste contract that included a requirement that the contractor comply with all acts, regulations, local laws and OHS issues.
- The contractor had agreed to meet and impose those same requirements upon the sub-contractor drivers engaged by it to collect the waste.
- The contract contained a bonus system that rewarded the contractor when compliance under the contract was achieved.
- Glen Eira had no direct relationship with the subcontractor drivers of the trucks engaged by the contractor and did not deal directly with them in any event.
- The structure for payment under the contract was per tenement and had no connection to the weight collected and therefore did not provide an incentive to exceed mass limits.
Her Honour accepted that once Glen Eira became aware in April 2008 that the waste trucks had been exceeding mass limits, it worked closely with the contractor to resolve the issue through negotiation. She also accepted evidence that:
- Glen Eira had warned that if non-compliance continued it would be left with no option but to report the matters to VicRoads.
- Glen Eira issued a 'show cause' notice under the contract in respect of the overloading issue which resulted in the suspension of payment and could have resulted in the revocation of the contract.
- Termination under the contract would only be resorted to in extreme circumstances because of the nature of the service being provided and the difficulty putting alternative arrangements in place.
- At no stage were there warnings or dialogue between Glen Eira and VicRoads about the issue.
Her Honour accepted the prosecution's submission that as a matter of law, if it was proved that Glen Eira, as a consignee, was aware that there were breaches of mass limits, the reasonable steps defence would not be open to it.
Her Honour determined that Glen Eira did not know and could not reasonably have been expected to know about the breaches of mass limits by owner drivers at the time of the alleged offences in March 2008.
In so concluding, Her Honour took into account the steps taken to set up the commercial arrangement and the particular issues that had to be dealt with by Glen Eira at the time. She accepted that based upon the measures put in place there was "nothing to suggest it was a foreseeable likelihood" that the vehicles would be overloaded.
Her honour accepted that the weighbridge information from the landfill was provided to council as gross weight figures for the purpose of invoicing – and noted that "there was no specific mechanism of identifying each load and whether or not individual trucks were over their mass limit".
Her Honour rejected a submission by the prosecutor that as part-owner of the landfill, Glen Eira had constructive knowledge of the offences. Her Honour pointed to evidence that the landfill was operated under a joint venture agreement which had engaged a third party to manage the operation and therefore was not satisfied that the weighbridge at the landfill was an agent of Glen Eira.
Having accepted that Glen Eira did not know, and could not reasonably have been expected to have known, of the breaches Her Honour turned her mind to whether it had taken all reasonable steps to prevent the conduct from occurring. She said that in assessing what is reasonable:
"The real issue is whether Council acted quickly enough in this case in identifying the breaches in relation to the general waste. Was enough done in the circumstances and was it reasonable for the Council to rely on the analysis they had carried out however detailed or conservative? Is there a duty from day to day to check whether there is compliance?"
Her Honour rejected the prosecution's allegation that Glen Eira ignored its responsibility under the RSA and did nothing, instead taking the view that Glen Eira "actively and consistently sought to resolve the issue directly and in a manner appropriate to the type of services in question."
Her Honour stated that what is reasonable depends on "all the circumstances" of the particular case. She accepted as a relevant matter in assessing the reasonableness of the steps taken by Glen Eira that in the case of waste collection services, mass limits can be described as an "after the event" problem. Her Honour noted that "one does not know (but can only estimate) what the mass is likely to be until after its collection."
Her Honour acknowledged that this difficulty in mass management "is specific to waste collection and renders the issue of mass management quite different to the usual situation where consignors are able to establish the weight of the truck before the journey commences".
Later in her reasons Her Honour commented that in these circumstances "All that can be done in reality is to put in place systems and measures to try to ensure that the load is catered for and set up appropriate checks and balances".
Her Honour stated that she was satisfied that in the circumstances, there was no reason for Glen Eira to expect overloading to have occurred and the measures put in place were reasonable at the time, including:
- putting in place a commercial arrangement that makes requiring compliance with legislative or regulatory provisions
- ensuring the commercial arrangement is adequate for the requirements of the service at the time of the arrangement and for the future
- structuring the arrangement so that there is no incentive to breach regulations such as mass limits
- a disincentive to breach such regulations such as bonus payments only paid when full compliance is met
- analysis of tender against requirements and reliance upon that analysis
- monitoring and negotiating on the system to ensure its smooth operation and compliance.
On that basis her Honour found that Glen Eira had established the reasonable steps defence, and therefore acquitted it of all 88 charges.
Norton Rose Australia advised and acted for Glen Eira throughout this case. We have been involved in all the risk management aspects of compliance with the 'chain of responsibility' legislation and are well positioned to assist organisations during the critical investigation stage, and provide necessary advice to defend a prosecution.
Norton Rose Australia also provides advice to municipalities and waste transport operators planning to review their waste management contracts to ensure that new contracts comply with the 'chain of responsibility' provisions of the RSA and ensure that any changes made do not compromise the success of any defence that might be available in the event of a future prosecution.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.