Arthur's Seat Scenic Chairlift Pty Ltd v The Queen [2010] VSCA 269

2 The chairlift consists of 64 chairs, each of which is capable of holding two adult passengers. The ride runs for 2,000 metres. A wire rope, to which the chairs are attached by a clamp mechanism, runs over rollers on the tops of eight steel support poles. The height of the chair from the ground varies from three metres to five metres.

3 The chairs are attached to the cable by a gripping mechanism, consisting of two halves. The halves are connected by bolts with Nyloc nuts on the underside of the grip. The interior sides of the grips have teeth, which mesh into the weave of the cable.

4 On 18 March 2004 Tri Thi Le was riding in the chairlift with her son. The chair grip mechanism ceased to grip the cable, and the chair in which Mrs Le was riding slid down the cable and collided with the rear of the next chair. As a result of the collision, Mrs Le sustained compound fractures of her legs.

5 The appellant was charged with an offence under s 22 of the Occupational Health and Safety Act 1985. The section provided:

An employer must ensure, so far as is reasonably practicable, that persons other than employees of the employer are not exposed to risks to their health or safety arising from the conduct of the undertaking of the employer.

6 After a committal hearing, the appellant was tried in the County Court in October 2007. On the first day of the trial, the appellant pleaded guilty. At the hearing of the plea, the parties relied upon a statement of agreed facts. The statement contained the following information as to the cause of the accident.

7 A report by Mr Kellermann, a chartered professional engineer, stated his opinion that 'the only possible reason for slipping is that the bolts were not done up'. There was no evidence of yielding of the shanks or stripping of the threads and Mr Kellermann said that in his opinion the bolts did not shake loose. A report by a senior research engineer employed by CSIRO stated:

The test results also show that, with grips in good condition and with high bolt tensions, the grips have capacity with a good factor of safety, to resist the sliding forces to which they may be subjected in service. If the bolt tension had been maintained at the high level and the worn grips had been replaced with one in good condition, it is unlikely that an incident such as the one on 18 March 2004 could have occurred.

8 On 23 March 2004, an occupational health and safety consultant, an engineer and a WorkSafe inspector carried out an examination of the torque applied to each nut and bolt on each chair grip. A wide variation in torque levels was found across the range of nuts and bolts checked. The tests established the torque readings for the 64 chairs varied from less than three foot-pounds to 50 foot-pounds. The appellant itself specified a torque of 28 foot-pounds, based upon the specification of the manufacturer of the bolts.

9 The bolts on the chair grips were last checked for tightness on 7 February 2004. They were not checked in the month of March, despite the self-imposed requirement of the appellant that the torque settings be checked monthly.

10 In relation to a check in early January 2004, the mechanic in charge of maintenance of the chairlift said that a tension wrench was not employed in checking the bolts. He said that on a number of occasions he used a spanner and not a torque wrench to tighten nuts on the grips.

11 The agreed statement of facts included the statement that the accused company, with prior knowledge of the risk, failed to adequately maintain the chairlift so that the risk of a chair or chairs becoming detached from the haul rope was eliminated or reduced. The statement included assertions that 'there was no adequate maintenance system to check the torque setting on all the grips in March 2004', 'the torque settings varied', 'the maintenance system did not adequately ensure that the nuts on the grips were tensioned to 28 foot-pounds', and 'the maintenance system failed to ensure that a torque wrench was used when tightening the nuts'.

12 The statement also recorded that two witnesses had seen a male person climbing on to one of the chair canopies on the day before Mrs Le was injured. On 23 March 2004 all the bolts were torqued at 28 foot-pounds. On 27 March 2004 a WorkSafe inspector observed that the nuts on chair 52 were loose. The trailing nut could be undone with finger pressure. The edges of the nuts were rounded down.

13 Notwithstanding the existence of the statement of agreed facts, in the course of the plea the parties referred to evidence contained in the depositions from the committal hearing and to reports by experts. The evidence included a report by a Professor Kuhnell, an expert engaged by the appellant, who said that the relevant standard was Canadian Standard Z98. The Standard required the grips to resist a sliding force of three times the gravitational force down the maximum slope of the cable. Professor Kuhnell said that bolts torqued to five foot-pounds would meet the Standard. The tests on 23 March 20034 revealed that the bolts on some eight grips failed the requirement of Standard Z98.

14 Counsel for the appellant told the sentencing judge that the appellant accepted that it breached the Act because it failed to check the bolts in March 2004 and that on 23 March 2004 there were seven or eight chairs gripped by bolts which had a torque setting of less than five foot-pounds. The prosecutor told his Honour that the appellant's maintenance system was inadequate. The appellant had failed to check the bolts in March 2004 and there were grips which failed to meet either the manufacturer's specification or Standard Z98.

15 Both counsel agreed that, in order to treat the accident which occurred on 18 March 2004 as an aggravating circumstance, the sentencing judge was required to find that it had been proven beyond reasonable doubt that the cause of the accident was want of maintenance rather than sabotage. His Honour concluded:

It is not possible to exclude the sabotage explanation beyond reasonable doubt. I find the actual injuries sustained by Mrs Le may not be regarded as a circumstance of aggravation for the purpose of penalty.

16 At the conclusion of the plea, the appellant was fined $110,000.

17 The appellant has been granted leave to appeal against the penalty by a single judge of this Court. The grounds of appeal are as follows:

(a) determining that the level of moral culpability for the offence was high;

(b) determining that the offence called for a mid-range fine;

(c) determining that a mid-range fine in the circumstances equated to $110,000;

(d) failing to give any or any adequate reasons for determining that the level of moral culpability was high, that a mid-range fine was appropriate, and that a fine of $110,000 was appropriate.

2. In assessing the level of risk associated with the activity, the sentencing judge erred by:

(a) focusing on the consequences of a chair slip occurring and failing to take account of the probability of such an event occurring;

(b) finding that a slippage event which had occurred four years earlier was of significance;

(c) failing to find that 44 years of operating the chairlift without any other slippage was of significance.

1. The sentencing judge took into account an irrelevant consideration by finding it unlikely that the grips became loose as a result of sabotage and more likely that the grips became loose as a result of inadequate maintenance.
2. The sentencing judge erred by failing to give any or any sufficient weight to the defendant company's financial circumstances and the nature of the burden that its payment would impose pursuant to s 50(1) of the Sentencing Act 1991.
3. The sentencing judge erred by failing to give any or any sufficient weight to the defendant company's:

(a) lack of prior criminal history;

(b) the capital expenditure and loss of income associated with major upgrades to the chairlift's plant and equipment, especially in 2003;

(c) contributions to the Victorian tourism industry.

1. The sentencing judge erred by imposing a sentence which was manifestly excessive.

18 Pursuant to the first ground of appeal, counsel for the appellant relied upon the prosecutor's statement to the sentencing judge that the penalty should fall in the mid-range, as if it confined the judge's discretion. He submitted that the sentencing judge interpreted mid-range as half the maximum fine with a $15,000 discount for the plea of guilty. Counsel said that the sentencing judge should have found that mid-range meant in the middle of the range of fines actually imposed for comparable breaches of the Act, taking into account the relevant sentencing principles and practices and aggravating and mitigating circumstances.

19 In my opinion, the sentencing judge was not limited by the prosecutor's characterisation of an appropriate sentence. The question of the appropriateness of the penalty is not answered by identifying the sentence advanced by the prosecutor, but rather determining whether the sentence imposed upon the appellant fell within the range of reasonable sentences having regard to the circumstances of the offence and the offender.

20 Counsel for the appellant submitted that his Honour erred in concluding that 'the level of moral culpability is high' and contended that the sentencing judge erred in finding that another chair had slipped in 2000 was significant in determining the appellant's moral culpability. On that occasion the cause of the slippage was the stripping of threads on mild steel fine threaded nuts and bolts. The appellant had taken effective steps to prevent a recurrence of that failure by replacing bolts with more robust high tensile, coarse threaded bolts and Nyloc nuts.

21 The sentencing judge did refer to the accident in 2000. In my opinion, he was entitled to have regard to it as an event that demonstrated the consequences of a failure of the grips attaching the chairs to the cable. There is no reason to suppose that his Honour made more of the event than that.

22 The sentencing judge was criticised for giving undue weight to the consequences of a grip slipping on the cable. He said:

The injury to Mrs Le is evidence of the seriousness of the risk.

In my opinion, this factor was important. The accident did illustrate the potential consequences of the failing to take reasonably practical steps to prevent the grips slipping on the cable.

23 The sentencing judge found that 'of the three explanations of the incident, the more likely is that the grips became loose as a result of inadequate maintenance. I think it is unlikely that the grips became loose as a result of sabotage'.[1] Counsel for the appellant submitted that this finding ought not to have been made in view of the finding that it had not been proven beyond reasonable doubt that inadequate maintenance caused the accident which occurred on 18 March 2004.

24 The tests made on 23 March 2004 showed that a significant number of chairs attached at widely separated parts of the cable failed Standard Z98 and that the bolts holding only five chairs met the appellant's self-imposed standard of 28 foot-pounds. The only readily accessible chairs were those at the foot and head of the run when the chairlift was not operating. I agree with the sentencing judge that it is most improbable that failure on such a scale was due to sabotage.

25 I do not think that his Honour should have revisited the question of the cause of the injuries to Mrs Le. That was an aggravating factor, in respect of which the Crown bore an onus of proof beyond reasonable doubt. On the other hand, the facts

constituting the breach to which the appellant pleaded guilty were not subject to the standards of proof canvassed in R v Storey.[2] Even though the injuries to Mrs Le could not be attributed to the breach, it does appear that inadequate maintenance produced a significant risk of the chairs slipping on the cable.

26 The grounds of appeal alleging specific errors contain a number of contentions which are really particulars of the last ground, that the penalty was manifestly excessive. In that respect the appellant could rely upon a number of

significant mitigating factors. It pleaded guilty. The chairlift significantly contributed to tourism and employment in the area of Arthur's Seat. The chairlift had operated for some 44 years and in that period there was only one other instance of a grip slipping on the cable. That was due to inadequate design of the grips, a defect which was promptly rectified. The appellant had employed a qualified tradesman to maintain the chairlift. The financial position of the appellant meant that a substantial fine would impose considerable hardship upon it. The appellant suffered substantial operating losses in the financial years from 2002 to 2007 save for an operating profit in 2005-6. Accumulated losses to 2007 amounted to approximately $281,000 and total liabilities to approximately $630,000. The sentencing judge enquired as to when the chairlift would operate again and was told that it was hoped that that would occur in the summer of 2007-8. In fact the chairlift is still moribund.

27 In all the circumstances, and particularly having regard to the safety record of the chairlift, its importance to the local economy and the financial position of the appellant, I regard the fine imposed upon the appellant as excessive. I would substitute a fine of $60,000.

28 For the reasons given by Buchanan JA, I agree that the appeal should be allowed and that a fine of $60,000 be substituted.

[1] His Honour had earlier identified three possible bases upon which the appellant was guilty. One was that the grips became loose as a result of inadequate maintenance, the second was that the grips became loose as a result of sabotage and the third was that the nuts were not adequately serviced when last inspected. The difference between the first and third bases is elusive.

[2] [1998] 1 VR 395.