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Pharmacy Board of Australia v Coghill[2015] QCAT 27

Pharmacy Board of Australia v Coghill[2015] QCAT 27

CITATION:

Pharmacy Board of Australia v Coghill [2015] QCAT 27

PARTIES:

Pharmacy Board of Australia

(Applicant/Appellant)

 

v

 

Mr Malcolm Roberty Coghill

(Respondent)

APPLICATION NUMBER:

OCR278-11

MATTER TYPE:

Occupational regulation matters

HEARING DATE:

31 July 2013

HEARD AT:

Brisbane 

DECISION OF:

Judge Alexander Horneman-Wren SC, Deputy President

Assisted by

Mr Andrew Petrie

Dr Karen Walduck

Ms Jennifer Felton

DELIVERED ON:

19 January 2015

DELIVERED AT:

Brisbane 

ORDERS MADE:

  1. The respondent be cautioned.
  2. The parties bear their own costs of and incidental to the proceeding.

CATCHWORDS:

PROFESSIONS AND TRADES – HEALTH CARE PROFESSIONALS – PHARMACEUTICAL CHEMISTS – DISCIPLINARY PROCEEDINGS – CONVICTION OF OFFENCE – where the respondent was convicted of an offence under the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (‘WCRA’) – whether the WCRA is an Act relating to the practice of the profession of a pharmacist

PROFESSIONS AND TRADES – HEALTH CARE PROFESSIONALS – PHARMACEUTICAL CHEMISTS – DISCIPLINARY PROCEEDINGS – MISCONDUCT IN A PROFESSIONAL RESPECT – where the applicant relied on the convictions under the WCRA to establish that the respondent had behaved in a way that constituted unprofessional conduct – where the record of conviction amounts to prima facie proof of the bare elements of the offence – whether the respondent behaved in a way that constitutes unprofessional conduct

Evidence Act 1977 (Qld), s 79(3)

Health Practitioners (Disciplinary Proceedings) Act 1999 (Qld), s 118(1)(c)(iii), s 120(3), s 123, s 124(1)(a), s 124(1)(g)

Workers’ Compensation and Rehabilitation Act 2003 (Qld), s 5(1), s 5(2), s 48, s 50, s 51, s 69, s 108(1), s 109(2), s 533(1), s 534(2)

Allen v United Carpets [1989] VR 323

Chiou Yaou Fa v Morris (1987) 46 NTR 1

Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1

Crime and Misconduct Commission v Assistant Commissioner Ross Barnett [2010] QCAT 690

Derry v Peek (1889) 14 AC 337

Giorganni v R (1985) 156 CLR 473

Mallan v Lee (1949) 80 CLR 198

Prepaid Services Australia Pty Ltd v Atradius Credit Insurance NV (2013) 302 ALR 732

Psychology Board of Australia v Milosevic [2013] VCAT 12

R v Australian Films (1921) 29 CLR 195

Yorke v Lucas (1985) 158 CLR 661

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Mr M Black instructed by DLA Piper Solicitors

RESPONDENT:

Mr Coghill was self represented

REASONS FOR DECISION

  1. [1]
    The Pharmacy Board of Australia has referred disciplinary proceedings to the Tribunal against Mr Malcolm Robert Coghill pursuant to s 124 of the Health Practitioners (Disciplinary Proceedings) Act 1999 (Qld) (‘Disciplinary Proceedings Act’).  Two grounds for disciplinary action are alleged in the referral.
  1. [2]
    Ground 1 is that Mr Coghill has been convicted of an offence related to the practice of his profession.[1]  Ground 2 is that by engaging in the conduct upon which the convictions were based,[2] Mr Coghill has behaved in a way that constitutes unsatisfactory professional conduct within the meaning of that expression as used in s 124(1)(a) of the Disciplinary Proceedings Act.  It is alleged that he has engaged in:

i) professional conduct that is of a lesser standard than that which might reasonably be expected of him by the public or his professional peers; and/or

ii) infamous conduct in a professional respect; and/or

iii) misconduct in a professional respect; and/or

iv) conduct discreditable to his profession; and/or

v) other improper or unethical conduct.

  1. [3]
    The matters giving rise to Mr Coghill’s convictions and these disciplinary proceedings concern the failure of a company, Comal Management Pty Ltd (‘Comal’), of which Mr Coghill was the sole director and shareholder, to insure workers engaged by it under a policy of insurance as required by the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (‘WCRA’).  Comal conducted, amongst other businesses, a pharmacy in Coomera from which Mr Coghill practiced his profession of pharmacy.

The convictions

  1. [4]
    On 11 September 2009 Mr Coghill was convicted of one count of having defrauded or attempted to defraud an insurer in contravention of s 533(1) of the WCRA, and one count of knowingly making a false or misleading statement in contravention of s 534(2) of the WCRA.  He was convicted in his absence.  He claims not to have had notice of the proceedings.  However, the Magistrate who dealt with the charges was satisfied that notice of the hearing had been sent to Mr Coghill’s last known address as provided to the Court.
  1. [5]
    In respect of the fraud charge, Mr Coghill was convicted and fined $8,000. He was also ordered to pay the sum of $4,634.31 as compensation. That was the sum of the unpaid premiums which had been assessed in default. He was also ordered to pay investigation costs of $3,078.13, professional costs of $1,846.50 and costs of court of $71.70.
  1. [6]
    In respect of the charge of knowingly making a false or misleading statement, he was convicted and fined $1,500.
  1. [7]
    On 9 June 2010 Mr Coghill applied to the Southport Magistrates Court to have the criminal proceedings re-opened. His application was dismissed on 9 July 2010.
  1. [8]
    The fact of those convictions is uncontentious. The Board has tendered evidence of them in the form of a Certificate of Conviction issued under the Justices Act 1886 (Qld).  For his part, Mr Coghill does not contest the fact of the convictions.  Nor does he contest the fact that from 2006 Comal did not maintain of policy of workers’ compensation insurance under a Workcover policy as required by the WCRA.  He does, however, give evidence about the circumstances by which Comal came not to have such a policy.  He does contest that he has engaged in unsatisfactory professional conduct in light of those circumstances.
  1. [9]
    In its submissions, the Board summarises the relevant facts as follows:
  1. During the relevant period, the company employed various nursing and administrative staff.  As an employer, the company had an obligation under s 48(1) of the WRC Act to take out and maintain accident insurance for each employee.
  1. The registrant was the sole director and shareholder of the company during the relevant period.  He was, in effect, the ‘alter-ego’ of the company.  The registrant had the control and management of the company, and was aware of all relevant dealings in respect of the company’s employment of staff.  The registrant was responsible for ensuring the company met its obligation under s 48(1) of the WRC Act.
  1. The company held an appropriate insurance policy with Workcover from 31 October 2000 to 30 June 2005.  That insurance lapsed, and the company failed to take out a new policy or to lodge any further employer statements with Workcover.  Throughout the relevant period, the registrant failed to ensure the company met its obligation to hold accident insurance for its employees.
  1. Officers from Workcover investigated the company’s compliance with the WRC Act.  On 21 August 2008, the registrant spoke with a Workcover officer and told her that Guild Insurance Ltd provided insurance cover for the company’s employees.  That statement was false, and the registrant knew it was false.  Despite notification from Workcover, the registrant took no steps to have the company with its obligation under WC Act and continued to operate the company without paying the relevant insurance premiums. (emphasis added)
  1. [10]
    The false statement which Mr Coghill is alleged to have knowingly made as referred to in paragraph 14 above, was a statement to a Workcover investigator, Ms Rosa Fusella.
  1. [11]
    The basis upon which it is said that this statement by Mr Coghill was false, is that at the time Guild Insurance Ltd was not a licensed self insurer in Queensland.[3]  Apart from being somewhat misconceived in that an insurance company such as Guild could not be a licensed self insurer, other than of its own workers,[4] falsity of the statement does not of itself establish that Mr Coghill knew it to be false as alleged.  The Board’s submissions do not identify any evidence which might establish that further fact.
  1. [12]
    For his part, Mr Coghill does not specifically deny making the statement; although he does not recall having made it. The only discussion he recalls having with any officer of Workcover was at a time when one contacted him by telephone when he was quite ill. He says that he informed the person that he was not then able to address the phone call because of his health. He says he has no recollection of any meeting with Rosa Fusella.
  1. [13]
    He does, however, agree that the employees at the pharmacy were covered by a Workcover policy of insurance up until 2005. He says that up until that time Comal held business insurance with AMP. He says that after 2005 all insurance was transferred to Guild. Previously, when in business in Victoria, he had used a similar facility which included workers’ compensation insurance for staff.  He had assumed that when he took out further insurance with Guild it was of the same kind.  He accepts that, in hindsight, this assumption was wrong.

Evidence of contravening conduct

Ground 1

  1. [14]
    As it is uncontentious that Mr Coghill has been convicted of the offences, the only issue which is required to be resolved is whether those convictions were for offences against an Act of the State related to the practice of his profession.
  1. [15]
    It is clear from s 124(1)(g) of the Disciplinary Proceedings Act that the words “related to the practice of the registrant’s profession” qualify the Act, not the conviction or the offence.  This is apparent from the examples which are provided in sub-paragraphs (i) to (iv).  Each of those examples concerns particular legislation.
  1. [16]
    Therefore, the question is:

Is the WCRA an Act relating to the practice of the profession of a pharmacist?

  1. [17]
    In its submissions the Board having identified, correctly, that it is clear that Mr Coghill has been convicted of an offence against an Act, namely the WCRA, submits “that the convictions are ‘related to the practice of the registrant’s profession’ for the purposes of s 124(1)(g)” (emphasis added).[5]
  1. [18]
    That submission, by focusing upon whether the convictions, rather than the Act, were related to the practice of the profession, poses the wrong question for the reasons already identified. It will often be the case that a conviction related to the practice of the health profession will also be a conviction for an offence against an Act related to the practice of that profession. But it may not always be so. The failure to obtain planning permission for a building which houses a health professional’s practice may result in a conviction for an offence against planning legislation requiring permission to be obtained. That conviction may be related to the practice of the registrant’s profession. However, it does not follow that the planning legislation is an Act related to the practice of that profession.
  1. [19]
    The Board further submits:

Here the registrant practiced his profession as a pharmacist during the relevant period by employing nursing and administrative staff in the medical centres and pharmacies owned by the company.  It is submitted that the registrant’s failure to ensure the company complied with its obligations, and his making of a false statement during investigation, were therefore offences ‘related to’ the practice of his profession.[6]

  1. [20]
    In my opinion, that submission is inaccurate in two respects. First, Mr Coghill did not employ nursing and administrative staff in centres and pharmacies owned by the company. The company employed the staff.[7]  Secondly, Mr Coghill has not been convicted of any offence of failing to ensure the company complied with its obligations under the WCRA.  It would not appear that there is any such offence created by the WCRA.  He was convicted of defrauding, or attempting to defraud, an insurer, and of knowingly making a false or misleading statement.
  1. [21]
    Notwithstanding those inaccuracies in the Board’s submissions, it is necessary to consider whether the WCRA is an Act related to the practice of Mr Coghill’s profession.
  1. [22]
    The WCRA establishes a workers’ compensation scheme for Queensland.[8]  The main provisions of the scheme include an obligation imposed upon employers to be covered against liability for compensation and damages for injuries sustained by workers, such cover to be either under a Workcover insurance policy or under a licence as a self insurer.[9]
  1. [23]
    For the purposes of the WCRA, a “worker” is defined, primarily, as a person who works under a contract and who, in relation to the work, is an employee for the purposes of the assessment of PAYG withholding under the Taxation Administration Act 1953 (Cth).[10] An “employer” is defined, primarily, as a person who employs a worker to perform work.[11]
  1. [24]
    If a registered health practitioner engages workers to perform work associated with the practice of that practitioner’s profession, the practitioner will be obliged to insure against injury sustained by those workers as required by the WCRA.  If the workers are engaged by a corporate entity, the obligation to insure will fall upon the corporation. However, the performance of the work by the workers will remain associated with the practice of the registered health practitioner’s profession.
  1. [25]
    In either case, the WCRA is, in my view, an Act related to the practice of the registrant’s profession.  The WCRA applies whenever an employer in Queensland engages workers.  If those workers are engaged by the employer in the context of the practice of a health practitioner’s profession, then the WCRA is an Act related to the practice of the registrant’s profession by him or her.  The practice of the profession gives rise to the engagement of the workers.  The WCRA requires the employer of those workers to insure against injury to them.
  1. [26]
    Once it is accepted that the WCRA is an Act related to the practice of Mr Coghill’s profession, it must be found that he has been convicted of offences against an Act related to the practice of his profession.  The first ground for disciplinary proceeding is thus made out under s 124(1)(g). 

Ground 2

  1. [27]
    The Board relies upon a Certificate of Conviction to establish the second disciplinary ground; that Mr Coghill has engaged in unsatisfactory professional conduct. Whilst acknowledging that the Tribunal is not bound by the rules of evidence,[12] it submits that s 79(3) of the Evidence Act 1977 (Qld) provides that in a civil proceeding in which a person is proved under s 79 to have been convicted of an offence, as is the case here with the convictions themselves having been proved by the Certificate of Conviction, the person shall, unless the contrary is proved, be taken to have committed the acts and possessed the state of mind which at law constitute the offence. 
  1. [28]
    In support of its submission that s 79(3) may be available to prove the underlying acts and state of mind constituting the offence, the Board observes that in Crime and Misconduct Commission v Assistant Commissioner Ross Barnett[13] the Honourable JB Thomas AO said:

… In Queensland s 79 of the Evidence Act 1977 permits proof by tender of the conviction, although such proof is not conclusive of the facts and may be rebutted.  The relevant provision is that unless the contrary is proved, the person is taken to have committed the acts and to have possessed a state of mind which at law constitutes that offence.  That is to say, it amounts only to prima facie proof of the bare elements of the offence.  That section of course does not bind this Tribunal but it is indicative of the practice in the Courts…

  1. [29]
    In many cases it may be entirely appropriate and orthodox for the Tribunal, applying s 79(3) of the Evidence Act, to accept as established the underlying facts and mental state upon proof of conviction for an offence.  However, as was pointed out in the passage from CMC v Barnett relied upon by the Board, s 79 is not a means of conclusive proof, but prima facie proof of the bare elements of the offence.  That prima facie proof may be rebutted. 
  1. [30]
    Reliance by the Board upon s 79(3) of the Evidence Act to prove the elements of the offences evidenced by the Certificate, and by that means to establish that Mr Coghill has engaged in unsatisfactory professional conduct, faces several difficulties in this case. 
  1. [31]
    In relation to the conviction under s 533 of the WCRA, there is difficulty in identifying what the underlying acts or state of mind constituting the relevant offence are said to be.
  1. [32]
    Section 533(1) is stated in very broad terms: “A person must not in any way defraud or attempt to defraud an insurer.”
  1. [33]
    The way in which it was alleged that Mr Coghill defrauded, or attempted to defraud, Workcover is not particularised. The complaint before the Magistrate is not in evidence in this proceeding.
  1. [34]
    The bundle of documents relied upon by the Board includes the written submissions made to the Magistrates Court on behalf of the prosecution and the transcript of the proceedings after which Mr Coghill was convicted in his absence.[14]  The written submissions refer to a Mr Cowper deposing “to the basis of belief that Coghill was knowingly concerned in the contravention the subject of the complaint, and had knowledge of the essential facts constituting the contravention, namely Comal employing nursing and/or administrative staff in Queensland, from 1 July 2005 until 27 February 2009, without the accident insurance premium”.[15]
  1. [35]
    In his affidavit, which is also in evidence in the bundle, Mr Cowper deposed to Comal having been charged with one breach of s 48, 50 and 51 of the WCRA.  As already discussed, s 48 imposes the obligation on an employer to insure against injury to its workers.  Section 50 prescribes the circumstances in which s 48 will be contravened.  Section 51 creates an offence for contravening s 48.  Whilst Mr Cowper deposed to Comal having also been charged with one count of defrauding Workcover in breach of s 533 of the WCRA, it is clear that the contravention of the WCRA by the company to which he deposed as to his belief that Mr Coghill was knowingly concerned was the contravention of s 48, and thus the offence under s 51.[16]
  1. [36]
    The written submissions before the Magistrate went on to identify what was described as “a mandatory non-delegable ongoing duty under s 48 Act [sic] to take out and maintain an accident insurance policy of insurance”.[17]  The submissions then addressed corporate and joint criminal liability.  They identified three bases for such liability.  They were in these terms:
  1. The relationship between a company and directors in the criminal context is symbiotic and overlapping. 
  1. The company can be a principal offender incurring direct liability with a director having accessorial liability:  Yorke v Lucas (1985) 158 CLR 661.  This usually occurs in cases of strict, or absolute, liability for non performance of a non-delegable statutory duty.  Strict liability may be avoided by honest and reasonable mistakes whereas absolute liability does not depend on any mental element or guilty state of mind.  It is imposed irrespective of fault, knowledge or beliefs.
  1. Alternatively, they can be joint or co-principals in the commission of an offence either directly or via the doctrine of vicarious liability which operates at common law or under statute to penalise the company financially for the defaults and criminal acts of directors in addition to or instead of his or her own personal culpability:  Mallan v Lee (1949) 80 CLR 198.
  1. Lastly, there are situations where the director incurs principal criminal liability and the company is held responsible as a secondary participant for so-called ‘alter ego’ crimes where the offending conduct and state of mind of a defaulting director are attributed to the company for law enforcement purposes: R v Australian Films (1921) 29 CLR 195; Chiou Yaou Fa v Morris (1987) 46 NTR 1; Allen v United Carpets [1989] VR 323; CF Lewis v Crafter [1942] SASR 30.
  1. [37]
    Yorke v Lucas, cited in support of the proposition that a director may have accessorial liability for a contravention for which the company has principal liability, was a case concerning a director’s liability for a corporation’s breach of s 52 of the Trade Practices Act 1974 (Cth) (‘TPA’) prohibiting corporations from engaging in conduct which was misleading or deceptive, or likely to mislead or deceive.  Contravention of s 52 of the TPA did not require any intent to mislead or deceive.[18]  Section 82 of the TPA permitted recovery of damages by a person who had suffered loss or damage by the conduct of another in contravention of s 52.  Recovery was permitted against any person involved in the contravention.
  1. [38]
    Section 75B of the TPA provided that a reference to a person involved in a contravention of the Act was to be read as a reference to a person who, relevantly,
  1. (a)
    has aided, abetted, counselled or procured the contravention; or

 …

  1. (c)
    has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention.
  1. [39]
    In an action against a director who was sought to be made accessorially liable for a corporation’s contravention of s 52 of the TPA, the plaintiff had argued that as a contravention of s 52 required no intent, “it follows that there was no reason why intent should play any part in secondary participation in a contravention of that section”.[19]
  1. [40]
    That contention was rejected by all members of the High Court. The court held that where the conduct relied on as establishing a contravention of s 52 was a false representation, a director could not be liable for the contravention, even if he was aware of the representation, unless he had knowledge of its falsity.[20]
  1. [41]
    Further, in respect of s 75B(c), it was held that in order to be knowingly concerned in a contravention, the director must have “knowledge of the essential facts constituting the contravention”.[21] That would include knowledge that the representation was misleading or deceptive, or was likely to mislead or deceive.  A director would not have such knowledge if he was unaware of the falsity of the representation.
  1. [42]
    Similarly in Compaq Computer Australia Pty Ltd v Merry,[22] Finklestein J observed at 5, having referred to Yorke v Lucas:

In this regard “knowledge” means actual and not constructive knowledge. For example, it would not be sufficient merely to show that the person charged with accessorial liability had shut his eyes to the obvious if that is intended to be a substitute for actual knowledge.[23]

  1. [43]
    Therefore, if the submission at paragraph 17 of Workcover’s written submissions before the Magistrate was intended to suggest that, based upon the authority of Yorke v Lucas, in circumstances in which the law imposed strict liability upon a corporation, a director of that corporation could be liable as an accessory without proof of knowledge or belief on his or her part, it was wrong at law.
  1. [44]
    In any event, the only offence for which there could be strict liability on the part of Comal, was an offence under s 51 of the WCRA; the failure to insure.  That is not the offence with which Mr Coghill was charged.  Authorities about strict liability were irrelevant to the charges against him. 
  1. [45]
    The second basis identified at paragraph 18 of Workcover’s written submissions could have no application to the case brought against Mr Coghill by Workcover. It concerns circumstances in which a corporation is, by the terms of a statute, made liable for some contravention of an officer or agent of the corporation.
  1. [46]
    The submission was based upon Mallan v Lee.  That case concerned s 230(1) of the Income Tax Assessment Act 1936-1945, which provided:

Any person who, or any company on whose behalf the public officer, or a director, servant or agent of the company, in any return knowingly and wilfully understates the amount of any income or makes any misstatement affecting the liability of any person to tax or the amount of tax shall be guilty of an offence.

  1. [47]
    The High Court held that this provision operated to make the corporation liable for the offence, as well as the person who had made the understatement or misstatement on its behalf. Dixon J, with whom Latham CJ agreed,[24] said at 215:

The purpose of the express reference to the company is to make the corporation vicariously liable, not to exclude the liability of the public officer or other agent of the company whose act and guilty mind form the essential elements in the offence.

  1. [48]
    Section 533 of the WCRA is not such a provision.  The case before the Magistrate did not concern making Comal vicariously liable for Mr Coghill’s alleged defrauding of Workcover.  The submission at paragraph 18 was entirely irrelevant to the prosecution of Mr Coghill.
  1. [49]
    The third example, discussed at paragraph 19 of the submission, was, again, irrelevant to the prosecution of Mr Coghill before the Magistrates Court.  The prosecution of Mr Coghill was not a case in which the company was to be held liable for some offence principally committed by him.
  1. [50]
    R v Australian Films was a case which applied, in a particular statutory context, the principle which had been stated by Atkin J in Mousell Brothers Ltd v London and North Western Railway Co[25] that a penalty may be imposed by statute upon a corporation “for the act of the servant if the servant commits the default provided for in the statute in the state of mind provided for by the statute”.
  1. [51]
    So it may be; but the case being prosecuted had nothing to do with such circumstances. It was not a case in which a penalty was being imposed upon Comal for same act committed by Coghill.
  1. [52]
    One struggles to understand on what possible basis Allen v United Carpet Mills Pty Ltd[26] could be cited as authority for the proposition contained in paragraph 19 of Workcover’s submissions in the prosecution of Mr Coghill.  It was a case in which, applying the reasoning of the High Court in He Kaw Teh v R,[27] it was held that the legislature had created an offence of absolute liability to which the defence of honest and reasonable mistake was not available.  That may have been relevant to a failure to insure charge brought against Comal; but it was entirely irrelevant to any charge brought against Mr Coghill. 
  1. [53]
    Moreover, it was not a case at all about “so called ‘alter ego’ crimes where the offending conduct and state of mind of a defaulting director are attributed to the company for law enforcement purposes”, as stated in paragraph 19 of the submissions.  Because the legislature had removed mens rea as an element of the offence, no state of mind was necessary to be imputed to the company.  Furthermore, whilst another person, Mr Davis, had also been charged with an offence against the same provision, quite contrary to his being the “alter ego” of the company, he was an unrelated third party contractor.  Neither he, nor his vehicle, were under the company’s control when on its premises.  The whole point of the case was that, notwithstanding this, the legislature had:

seen fit by the enactment of the deeming provision, to vest commercial occupiers such as (the company) with liability for any acts done by persons such as Davis coming onto their premises for purposes connected with their commercial and industrial undertakings.[28]

  1. [54]
    The third case cited by Workcover in paragraph 19 of its submissions in the prosecution against Mr Coghill was Chiou Yaou Fa v Morris.  That case also applied He Kaw The v R in finding the offences under s 13B(5) and 13AB(1A) of the Fisheries Act 1952 (Cth) were offences of strict liability so that the prosecution did not have to prove mens rea.  Again, however, that case had nothing to do with a corporation having some state of mind of a defaulting director attributed to it.  The case had nothing to do with directors at all.  The defendant was the master of a vessel which was illegally fishing in Australian waters.  He was charged in that individual capacity. 
  1. [55]
    Again, insofar as Chiou Yaou Fa is authority for the proposition that clear statutory language may remove mens rea as an element of an offence creating absolute or strict liability, such would only be relevant in this case to a charge of having failed to insure.  Mr Coghill was not charged with that offence.
  1. [56]
    The same points made about the irrelevance of Chiou Yaou Fa to the prosecution of Mr Coghill and its lack of support for the submission at paragraph 19, can also be made in respect of the authority which it applied; He Kaw Teh.  That case concerned an individual charged with drug importation and possession.  It had nothing at all to do with fixing a corporation with a director’s state of mind.  As it was also a case about the removal of mens rea from the elements of the offences, the state of mind of the accused was irrelevant.
  1. [57]
    In its oral submissions to the Magistrate the prosecutor for Workcover referred to Chiou Yaou Fa as “the seminal case”.[29]  The prosecutor said that Chiou Yaou Fa had reviewed He Kaw Teh[30] “as to the degree of mens rea that you need to be satisfied with and said that in these sorts of situations where you have strict liability, the director is in fact liable because they are so symbiotic, they are one”.
  1. [58]
    With respect, in neither case did the High Court say anything of the kind. Neither case even concerned a director and a corporation. The submission was entirely incorrect.
  1. [59]
    At paragraph 20 of Workcover’s written submissions the circumstances in which an employer will have contravened the obligation to insure, imposed by s 48 WCRA, were set out.  Then, at paragraph 21, the following was said:

A defaulting employer is liable to a pecuniary penalty: ss.50(b)(i)(ii); 51 and 57 of the Act, namely a maximum of $27,500 fine.  However, pursuant to s 533 blatant breaches amounting to defrauding the fund attract a maximum penalty of 18 months jail or a $40,000 fine. (emphasis added)

  1. [60]
    In my view, there is no basis for linking the offence of failing to insure created by s 51 with that of defrauding an insurer created by s 533 in the way which that submission purports to do. No authority was cited in support of it. It is entirely unclear as to what a “blatant breach” of the obligation in s 48 might be. This is particularly so if, as Workcover contended, it is an offence with no mental element.
  1. [61]
    Then, at paragraphs 22 and 23, the submissions went on to say:
  1. Under or non insurance is an offence of absolute, as distinct from strict, liability.  Guilt does not depend on fault.  Proof of the objective or physical ingredients of the offence is sufficient for conviction. (original emphasis)
  1. Moreover, there is no general presumption in favour of implying traditional property based defences such as ‘ignorance, claim of right or innocent mistake…’ the only express excuse to a proven breach is being confused about interstate employment arrangements: s 51(2) and s 113.
  1. [62]
    If by those paragraphs Workcover was transposing strict or absolute liability under s 48 and 51 (if such exists) to s 533, it was wrong.
  1. [63]
    At paragraphs 24 to 27 Workcover’s submissions referred to the offence of defrauding an insurer. Those submissions recognise that criminal fraud generally involves an element of intent.[31]  It was then submitted that “jeopardising the compensation rights of workers, or increasing the proportion of cost burden of other employers and depriving Workcover of premium payments due under the legislation is…. sufficient intention to defraud.”
  1. [64]
    Several points need be made in respect of that submission. First, when an employer fails to insure against injury to its workers, whether intentionally or unintentionally, the compensation rights of the employer’s workers are not jeopardised.[32]  That submission, as a matter of law, is incorrect.  A worker’s entitlement to compensation for injury is not dependent upon his or her employer maintaining a policy of insurance covering its liability for such.  The entitlement to payment of compensation on the part of the worker for the injuries sustained is created separately and distinctly under Chapter 3 Part 2 of the WCRA: Section 108(1).  The compensation is payable by Workcover:  Section 109(2). A worker may still sue his other employer for damages. Workcover would still be the “insurer” of the worker under the Act.[33]
  1. [65]
    If the employer has contravened s 48, Workcover may recover, in addition to any unpaid premiums and a penalty of up to 100% of those premiums, the amount of any compensation or damages paid by Workcover together with a penalty of up to 50% of that amount: Section 57(2).
  1. [66]
    Secondly, any increase in the proportionate cost burden of other employers, or the fact that Workcover has been deprived of premiums, are consequences of the failure to insure. Those consequences cannot establish an intention to defraud. The mere fact of the consequence does not, and cannot be used to, establish intention to bring about the consequence. This is the very reason why a legislature may legislate to remove intention, or any state of mind, as an element of an offence. The Queensland legislature may have done so in s 48 and s 51;  but it has not done so in s 533.
  1. [67]
    Thirdly, any increase in the proportionate cost burden of other employers could not constitute the defrauding of Workcover, let alone an intention to defraud on the part of Mr Coghill.
  1. [68]
    The written submissions under the heading “Defrauding Workcover” made by the prosecutor concluded, at paragraph 27, with the statement that:

Furthermore, non-lodgement of an annual wages declaration is just as fraudulent under s 533 as an understatement.  Workcover has less funds available to it and has to spread the costs burden among fewer employers to keep premium levels as low as possible.  The practical effect of this means that complying employers subsidise the uninsured workers of those in default.

  1. [69]
    This submission begs the question of how it is that complying employers subsidising the uninsured workers of those in default (assuming this to be an accurate statement) constitutes a defrauding of Workcover by the defaulting employers. I fail to see how any understatement of wages in an annual return made without knowledge that it was in fact an understatement[34] could amount to fraud.  Equally, I fail to see how a failure to lodge an annual wages declaration could constitute fraud in the absence of any knowledge of any requirement to do so.
  1. [70]
    The confusion between an offence under s 51 of the WCRA for failing to insure under s 48, for which there is arguably strict or absolute liability, and an offence under s 533 of defrauding an insurer, for which there is not, is further apparent from paras 33 and 34 of Workcover’s Written Submissions to the Magistrate.  At 33 it was said:
  1. Whilst it is submitted liability is strict, the gravamen of the conduct of Coghill and it is submitted the basis for the imputed knowledge of the offence in Charge 1 (the defrauding charge) is (relevantly):
  1. (a)
    the positive lie told by Coghill in Charge 2.
  1. [71]
    At 34, it was said:
  1. It is submitted that the requisite dishonesty in respect of Charge 1 is satisfied, together with the imputed knowledge of Comal to Coghill.
  1. [72]
    Paragraph 33, although asserting strict liability, seems to contemplate the possibility of an element of a mental state; knowledge of the offence. Paragraph 34 seems to accept that a state of mind, dishonesty, is required.
  1. [73]
    The confusion is further apparent from the oral submissions made by the prosecutor where he said:

The reason, I guess, that this is of some significance is it highlights the dishonesty of the director.  The director was communicating with Rosa Fusella and making false statements as to the insurance of the company, and, in effect, those false statements which are the subject of Charge 2 show the dishonest mind of the director in respect of Charge 1.  And, whilst that is not essential, because of the strict liability,[35] it does, I guess, add some gravitas and is the gravamen of the offence.[36]

  1. [74]
    If it is accepted that a state of mind, whether described as knowledge of the offence or dishonesty, must be proven in order to make out the charge of defrauding, as I consider it must be, these submissions identify that this state of mind was to be found from the false statements said to have been made to Ms Fusella, the Workcover investigator. This was the “positive lie” referred to in the written submissions.
  1. [75]
    Therefore, if it was not open to be found that Mr Coghill had been dishonest in knowingly making a false statement or telling a “positive lie”, then the charge of defrauding could not have been proven. In my view, the material before the Magistrate did not permit such a finding to be made.
  1. [76]
    The evidence on the issue was that contained in para 7(c) of Mr Cowper’s affidavit. It was:

Furthermore, Rosa Fusella will give evidence that on 21 August 2008 she spoke to Malcolm Coghill about accident insurance with Workcover in respect of the defendant.  During the conversation the Malcolm Coghill [sic] told Ms Fusella that the Guild Insurance Ltd (in Victoria) provided cover for his employees.  Rosa Fusella will give evidence that the time of the offence [sic] the Guild Insurance Ltd was not a licensed self insurer in Queensland.

  1. [77]
    That evidence may establish the falsity of the statement, but it does not establish that Mr Coghill knew it to be false, or even that he made it recklessly.
  1. [78]
    Of course, in these proceedings, he has sworn to it having been his belief that the employees of Comal were covered for workers’ compensation under the insurance with Guild. Counsel for the Board concedes that there is no other evidence which would displace Mr Coghill’s subjective evidence as to his state of mind.[37]
  1. [79]
    In written submissions in reply filed by the Board it referred to the approach taken by VCAT in Psychology Board of Australia v Milosevic[38] and submitted that QCAT should take the same approach in these proceedings.  In my view, it should not. 
  1. [80]
    Milosevic was a starkly different case to this.  It demonstrated why in some cases it may be entirely appropriate to apply an evidentiary provision such as s 79(3).  However, it also serves to illustrate why such an approach would not be taken in this case.
  1. [81]
    Mr Milosevic had been convicted of two counts of using a false document in order to obtain registration as a psychologist. Section 23 of the Psychologist Registration Act 1987 (Vic) (‘Registration Act’) provided that if the Board was satisfied that a person’s registration was obtained irregularly or fraudulently it could, after giving the person a reasonable opportunity to be heard, suspend or cancel the registration.
  1. [82]
    The case did not concern an evidentiary provision analogous to s 79(3) of the Evidence Act (Qld) which permits proof of the underlying elements of an offence by proof of conviction of the offence.  To the contrary, s 91 of the Evidence Act (VIC) prohibited such a course.  It provided that evidence of the decision or finding of a fact in one proceeding was not admissible to prove the existence of a fact that was in issue in another proceeding.
  1. [83]
    In light of s 91, the Psychologists Board expressly did not invite VCAT to find that Mr Milosevic had engaged in fraudulent representation merely because he had been found guilty of the criminal charges.
  1. [84]
    VCAT considered that by operation of s 98 of the VCAT Act, which is the analogue to s 28(3) of the QCAT Act, it was not bound by s 91 of the Evidence Act.  It held that the preferable view when making a finding under s 23(a) of the Registration Act, was to rely upon the findings and convictions in the criminal proceedings unless there was good reason not to do so.  It held the view that the Tribunal was not the appropriate vehicle for Mr Milosevic to challenge the verdict and that any disquiet about the finding of guilt was a matter for the Court of Appeal.  The Tribunal also observed that the Board’s powers under s 23 were exercisable after only having given the registrant a reasonable opportunity to be heard and that it was difficult to see any disadvantage in such an approach when the charge had been proven to a higher standard in the criminal proceeding.
  1. [85]
    Such an approach is entirely understandable in a case such as that before VCAT. The matter of which it had to be satisfied, irregular or fraudulent registration, was the very subject of the criminal charge. Here, however, it is not. Furthermore, Mr Milosevic was convicted after a six day contested trial in which the facts constituting his offences must have been found to have been proven, on fully tested evidence, beyond reasonable doubt. That is in stark contrast to Mr Coghill’s conviction, in his absence, on charges which the above analysis demonstrates were tenuous.
  1. [86]
    Against this analysis the submission made on behalf of the Board that the Tribunal should not go behind or beyond the Certificate of Conviction should be firmly rejected. To adopt the expression used by VCAT in Milosevic, this is clearly a case in which there is good reason not to rely upon the findings and convictions in the criminal proceedings. 
  1. [87]
    Having rejected that approach, and in light of there being no evidence to contradict Mr Coghill’s own evidence as to his state of mind, the Board has failed to make out the second ground for disciplinary action.

Sanction

  1. [88]
    The Board has succeeded in establishing that Mr Coghill has been convicted of offences against an Act related to the practice of his profession. It has thus made out a disciplinary ground. Section 241 of the Disciplinary Proceedings Act provides that if the Tribunal decides that a ground for disciplinary action has been established, the Tribunal must do one or more of things set out in s 241(2).
  1. [89]
    However, when the circumstances of those convictions are fully analysed and considered, I am not of the view that any sanction beyond a caution should be imposed upon Mr Coghill in this proceeding. In the criminal proceedings he was, as noted above, fined a substantial sum and ordered to pay compensation and costs. He has been significantly punished for the conduct which, in my view, established a disciplinary ground on the barest possible basis.
  1. [90]
    The purpose of these proceedings and disciplinary action not punitive but is to protect the public, to uphold standards of practice within the health professions, and to maintain public confidence in those professions.[39]  None of those purposes require sanction against Mr Coghill. 
  1. [91]
    Mr Coghill is cautioned that he ought take greater care in the future to ensure that he, or any entities related to him, are fully compliant with all legislative requirements relating to the practice of pharmacy.

Costs

  1. [92]
    When the Board determined to take disciplinary action against Mr Coghill it resolved to do so itself by way of a hearing by a disciplinary committee pursuant to s 118(1)(c)(iii) of the Disciplinary Proceedings Act.  Upon being notified of this, Mr Coghill, as he was entitled to do under s 120(3), elected to have the matter referred to the Tribunal.
  1. [93]
    That course no doubt led to significant further costs being incurred by the Board. However, the outcome of this proceeding to a large degree vindicates that election. It is doubtful that the tenuous basis for his convictions in the Magistrates Court which has been exposed in these reasons would have received such analysis in a disciplinary hearing conducted by a disciplinary committee of the Board.  The bare fact of those convictions is the only basis upon which the Board has succeeded in establishing a disciplinary ground.
  1. [94]
    Each party should bear their own costs of and incidental to the proceeding.

Footnotes

[1]See s 124(1)(g) of the Disciplinary Proceedings Act.

[2]There were two convictions.

[3]Affidavit of Stuart Anthony Cowper sworn 4 September 2009, paragraph 7(c).

[4] WCRA s 69.

[5]Applicant’s Outline of Submissions filed 31 May 2013, paragraphs 17 and 19.

[6]Ibid at paragraph 19.

[7]This is recognised in paragraph 11 of the Board’s Written Submissions.

[8] WCRA s 5(1).

[9] WCRA s 5(2); s 48.

[10] WCRA s 11.

[11] WCRA s 30.

[12] Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 28(3)(b),(c).

[13][2010] QCAT 690, [23].

[14]Bundle of documents relied upon by the Board filed 18 December 2012, Documents 6 and 3 respectively.

[15]Submissions – Workcover Queensland v Malcolm Coghill, 11 September 2009, paragraph 8. (Document 6 of the Board’s bundle).

[16]This is clear from paragraph 9 of Mr Cowper’s affidavit.

[17]Submissions – Workcover Qld v Malcolm Coghill at paragraph 13.

[18] Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197.

[19](1985) 158 CLR 661, 668.

[20]Ibid at 668 – 669 per Mason ACJ, Wilson, Deane and Dawson JJ, and at 677 per Brennan J.

[21]Ibid at 670 per Mason ACJ, Wilson, Deane and Dawson JJ.  See also Brennan J at 677.

[22](1998) 157 ALR 1.

[23]See Giorganni v R (1985) 156 CLR 473.

[24](1949) 80 CLR 198 at 212.

[25](1917) 2 KB 846.

[26][1989] VR 323.

[27](1985) 157 CLR 523.

[28][1989] VR 323 at 333.

[29]Transcript of Proceedings 11 September 2009 at 1-8, Line 5; Document 3 of the Board’s bundle.  The case name is misrecorded as “Fowler against Morrissy 1987”, but it is clear that Chiou Yaou Fa v Morris (1987) was being referred to.

[30]Ibid at Lines 10-15.  Again, the case name was not transcribed and was included in the Transcript as [Indistinct].  However, in context the prosecutor could only have been referring to He Kaw Teh.

[31]Since 1889 (Derry v Peek (1889) 14 AC 337) it has been clear that in order to prove fraud, a requisite state of mind on the part of the person making a representation must be established. Lord Herschell, at 374, stated the principles thus:

Fraud is proved when it is shown that a false representation has been made (1) knowingly; or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief.

See also Prepaid Services Australia Pty Ltd & Ors v Atradius Credit Insurance NV (2013) 302 ALR 732 [2013] NSWCA 252, per Meagher JA at [38]-[41].

[32]The WCRA creates separate rights concerning compensation under the Act as defined by s 9 and the ability to sue for damages in circumstances in which a legal liability to pay damages arises independently of the Act.

[33]Schedule 6.

[34]Or at least without belief in its truth; or recklessly or carelessly made whether true or false.

[35]It should be noted that this is inconsistent with the written submissions which said that liability was absolute, not strict, and the further oral submission made at page 1-7, Line 40 of the Transcript where the prosecutor had said that liability was not absolute, but strict.

[36]Transcript of Proceedings, 11 September 2009, 1-8, Lines 39-45.

[37]Transcript of proceedings, 31 July 2013, pages 1-75 to 1-77.

[38][2013] VCAT 12.

[39]See s 123 of the Disciplinary Proceedings Act.

Close

Editorial Notes

  • Published Case Name:

    Pharmacy Board of Australia v Coghill

  • Shortened Case Name:

    Pharmacy Board of Australia v Coghill

  • MNC:

    [2015] QCAT 27

  • Court:

    QCAT

  • Judge(s):

    Horneman-Wren DP

  • Date:

    19 Jan 2015

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Allen v United Carpets [1989] VR 323
4 citations
Jump To
Cite 1 - [1989] VR 323
Cite 2 - [1989] VR 323
Cite 3 - [1989] VR 323
Cite 4 - [1989] VR 323
Chiou Yaou Fa v Morris (1987) 46 NTR 1
2 citations
Jump To
Cite 1 - (1987) 46 NTR 1
Cite 2 - (1987) 46 NTR 1
Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1
2 citations
Jump To
Cite 1 - (1998) 157 ALR 1
Cite 2 - (1998) 157 ALR 1
Crime and Misconduct Commission v Assistant Commissioner Ross Barnett [2010] QCAT 690
2 citations
Jump To
Cite 1 - [2010] QCAT 690
Cite 2 - [2010] QCAT 690
Derry v Peek (1889) 14 AC 337
2 citations
Jump To
Cite 1 - (1889) 14 AC 337
Cite 2 - (1889) 14 AC 337
Giorganni v R (1917) 2 KB 846
1 citation
Jump To
Cite 1 - (1917) 2 KB 846
Giorgianni v The Queen (1985) 156 CLR 473
2 citations
Jump To
Cite 1 - (1985) 156 CLR 473
Cite 2 - (1985) 156 CLR 473
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216
1 citation
Jump To
Cite 1 - (1978) 140 CLR 216
Kaw Teh v The Queen (1985) 157 CLR 523
1 citation
Jump To
Cite 1 - (1985) 157 CLR 523
Lewis v Crafter [1942] SASR 30
1 citation
Jump To
Cite 1 - [1942] SASR 30
Mallan v Lee (1949) 80 CLR 198
3 citations
Jump To
Cite 1 - (1949) 80 CLR 198
Cite 2 - (1949) 80 CLR 198
Cite 3 - (1949) 80 CLR 198
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
1 citation
Jump To
Cite 1 - (1982) 149 CLR 191
Prepaid Services Pty Ltd v Atradius Credit Insurance NV (2013) 302 ALR 732
2 citations
Jump To
Cite 1 - (2013) 302 ALR 732
Cite 2 - (2013) 302 ALR 732
Prepaid Services Pty Ltd v Atradius Credit Insurance NV [2013] NSWCA 252
1 citation
Jump To
Cite 1 - [2013] NSWCA 252
Psychology Board of Australia v Milosevic [2013] VCAT 12
2 citations
Jump To
Cite 1 - [2013] VCAT 12
Cite 2 - [2013] VCAT 12
R. v Australasian Film Limited (1921) 29 CLR 195
2 citations
Jump To
Cite 1 - (1921) 29 CLR 195
Cite 2 - (1921) 29 CLR 195
Yorke v Lucas (1985) 158 CLR 661
5 citations
Jump To
Cite 1 - (1985) 158 CLR 661
Cite 2 - (1985) 158 CLR 661
Cite 3 - (1985) 158 CLR 661
Cite 4 - (1985) 158 CLR 661
Cite 5 - (1985) 158 CLR 661

Cases Citing

Case NameFull CitationFrequency
Kemp v State of Queensland (Department of Education) [2022] QIRC 1642 citations
Pharmacy Board of Australia v Jattan [2015] QCAT 2942 citations
Queensland College of Teachers v Illingworth [2016] QCAT 3093 citations
1

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