Comcare v Australian Postal Corporation

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 541 of 2010

JUDGE: LOGAN J DATE: 5 DECEMBER 2011 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 In the early of the hours of 7 July 2008, shortly before his 73rd birthday, a Mr Leonard Bobart (Mr Bobart), was struck by a forklift while in the loading dock of the Toowoomba Mail Centre preparing for that morning's mail delivery. The sequel to that industrial accident was that Mr Bobart's foot was crushed and crushed to the extent where it proved necessary, given the nature of the injuries, to amputate his right leg below the knee. 2 Mr Bobart was, at the time, an employee of Killara Company Pty Ltd (Killara). Killara was then a mail service contractor with the respondent, the Australian Postal Corporation (Australia Post). Australia Post controlled the Toowoomba Mail Centre. 3 Australia Post admits that the events of that industrial accident on 7 July 2008 constituted a breach by it of s 16(1) of the Occupational Health and Safety Act 1991 (Cth) (OHS Act). More particularly, Australia Post admits that it failed at all material times to take all reasonably practicable steps to protect the health and safety at work of its employees, including, per force of statute in the circumstances of this case, the employees of its contractor, Killara. 4 The effect of the OHS Act is that the definition of "employee" is enlarged so as to embrace a person such as Mr Bobart. Section 5 of the OHS Act offers a definition such that, when that section is read with s 9A of that Act, Mr Bobart is a person to whom Australia Post owed the duties for which s 16(1), and, more particularly by way of elaboration, s 16(2) of the OHS Act provides. The Toowoomba Mail Centre was at the time, and for that matter remains, a workplace within the meaning of s 5 of the OHS Act. 5 It is helpful to put in context the events of the early morning in question by reference to the nature of the task upon which Mr Bobart was then embarked. The Toowoomba Mail Centre is, as its name perhaps suggests, a mail delivery and distribution facility. From that facility, via its employees and contractors, Australia Post services the South Burnett, Darling Downs, South-west Queensland, and Granite Belt regions. 6 Killara is a company owned by Mr and Mrs John Waters. It was successful in tendering to Australia Post for the provision of a mail delivery service number 959 (mail service 959). That delivery service is a mail run between Toowoomba, from the mail centre, and Taroom, and various points in between. 7 Killara was then in the second year of a five-year contract with Australia Post, which had commenced on 1 July 2006. Mr and Mrs Waters had a much longer relationship than that with Australia Post. Via a partnership constituted by them, they had contracted to provide mail services to Australia Post for about 14 years before the commencement of the relevant mail service contract between Australia Post and Killara. 8 Pursuant to the contract with Killara, an employee of the company attended at the mail centre and then conveyed such outward mail as was then available to the licensed post office at Taroom, and then conveyed mail from there back to the mail centre at Toowoomba. 9 As I have mentioned, the service included points in between. In other words, all post offices, licensed post offices, and agencies en route, together with the clearance of a street post box at Macalister. That mail service 959, was operated once per day, six days per week. 10 There was a timetable in place for the arrival at the mail centre's loading dock, the loading of the truck and the departure from the mail centre. That had been given to Mr Waters of Killara by an Australia Post officer at the time when Killara entered into the contract for mail service 959. Australia Post timetabled its delivery service loading such that vehicles for particular delivery services were staggered at 15 minute intervals each morning. Mr Waters provided a copy of that timetable to Mr Bobart. In accordance with that timetable, the loading of mail into the truck of mail service 959 commences at or about 4.15 am at the mail centre. The timetable then provides for the departure of the loaded truck at about 4.35 am, returning to the mail centre after the run at about 6.05 pm. 11 Australia Post own, separate timetable also indicates that, for example, a separate mail service run to Goondiwindi is due to arrive at the mail centre at 4.25 am and depart at 4.45 am. That timetable includes a statement that the times are a guide only and may vary according to the daily volume of mail received, road and weather conditions and expressly provides that it is likely to be exceeded during pre-Christmas periods. That same statement was not made in the timetable for mail service 959. 12 Mr Bobart found it difficult to adhere to the timetable because it took longer to load the truck than the timetable allowed. 13 As might be expected, an efficient loading of the truck for mail service 959 required some thought to be given as to the sequence of loading. In other words, thought had to be given to the sequence in which particular drop-offs would occur along the way to Taroom, such that the load was ordered in a way that facilitated the ready unloading from point to point of the mail. 14 Mail at the mail centre is held in what are known as unit loading devices. These are placed in the loading dock area. Mail contractors then walk around locating their particular unit loading devices to ensure they are placed on their truck by Australia Post's forklift operator in the proper order. 15 It can be seen at once that there was, inherent in the operations of the Toowoomba Mail Centre, scope for pedestrian traffic by truck drivers concerned to locate their particular unit loading devices as well as forklift vehicle activity. The operation was one pregnant with the potential for just the kind of incident which occurred if there were not in place carefully thought out and enforced policies to mandate, to the maximum extent possible, separation between pedestrian and forklift traffic at the loading dock. 16 The evidence before me, which was not the subject of controversy, establishes that Australia Post did, before the incident, turn its corporate mind to a traffic management plan and to other procedures to try and ensure that separation. It is patent though that there was a failure rigorously to enforce those procedures. That lack of enforcement represents a failure in a corporate chain of command in respect of the Toowoomba Mail Centre. It also represents, at that centre, a failure to inculcate from high to low at the mail centre the absolute need for safety consciousness and adherence to policies. It is all very well to have well thought out policies but they are just chaff unless there is a concerted and continuous effort to enforce them and create a culture where enforcement is expected and adherence is the norm. 17 In this sense, whilst the breach is statutory in its foundation, accident prevention responsibility on the part of employers is no new subject. Nor is it just a creature of statute. At common law accident prevention is unquestionably one of the modern responsibilities of an employer: see McLean v Tedman [1984] 155 CLR 306 at 313. There Mason, Wilson, Brennan and Dawson JJ observed that the: The employer's obligation is not merely to provide a safe system of work; it is an obligation to establish, maintain and enforce such a system. 18 In this sense, the OHS Act underscores a duty which is there at common law. It also provides, by way of underscoring that duty, for a system of civil penalties to be imposed in respect of proved breaches. 19 A return to the events of that early morning in a little more detail is necessary so as to explain the outcome which I propose in respect of penalty. At about 4.10 am Mr Bobart walked through the loading dock area counting the various unit loading devices required for his run. He was wearing boots and a reflective vest. By that stage the Goondiwindi truck had also come to the loading dock to be loaded with mail. Having identified unit loading devices required for his run, Mr Bobart returned to stand near the rear of the Goondiwindi truck to look for further unit loading devices which might belong to his run. Whilst standing there, Mr Bobart observed a forklift driven by an Australia Post employee, a Mr Ruming, reverse towards him and stop. That forklift then started to move away from Mr Bobart. Whilst it was moving away Mr Bobart heard another employee speak. Mr Ruming then started reversing back towards Mr Bobart. In that intervening period, and unbeknown to Mr Ruming, Mr Bobart had stepped into the path of that forklift. 20 The inference arises that Mr Bobart, having observed the forklift moving away from him, then thought it safe to proceed across the loading dock. Suffice it to say, Mr Ruming, in this second act of reversing, did not see Mr Bobart, nor for that matter did Mr Bobart notice Mr Ruming. In particular, he did not notice any warning device on the forklift and he did not hear any reversing beeper due to the noisy environment at the mail centre's loading dock. It transpires that the reversing lights on the forklift were not working at the time. The forklift caught Mr Bobart on the inside of his right leg. His foot caught under the rear of the forklift and he was thrown to the ground. The forklift then ran over the lower part of his right leg. 21 Mr Bobart does not have any clear memory of events immediately following the incident other than he felt intense pain, until such time as the ambulance service arrived and provided him with pain relief. The incident occasioned deep lacerations to Mr Bobart's right heel, ankle and foot. He suffered extensive neurovascular and tendon damage. This required surgery and ultimately, as I have mentioned, amputation of his right leg below the knee. Mr Bobart was hospitalised from 11 July 2008 until 22 August 2008. 22 Another feature of the loading dock area at the mail centre at the time of the incident was that it was in low light; it was, after all, in the middle of winter. Further, the loading dock area was congested. It was a peak operating time on a Monday, which is usually the busiest day of the week at the mail centre. 23 I do not propose to elaborate upon Australia Post's then internal documentation in relation to occupational health and safety. As I have mentioned, it is obvious on the evidence that Australia Post had turned its mind to the subject of traffic control in its policies. What is equally obvious, as I have also mentioned, is that there was no rigorous enforcement of its policies from top to bottom and bottom to top. 24 These are proceedings which are brought on behalf of the Commonwealth by one of its statutory authorities, Comcare. They are not, in any sense of the word, private vengeance proceedings. Comcare seeks to enforce a public duty by way of seeking the imposition of several penalties. That said, it is not irrelevant in proceedings such as this to take into account the impact which a particular workplace accident has had on the victim. I have the benefit of a statement, adopted by affidavit, by Mr Bobart in relation to that impact. 25 Mr Bobart, though a septuagenarian at the time, was a very active man indeed. He had been married since 1967 and remains married. He has six children and 18 grandchildren. He derived much pleasure (and experiences much frustration now) in interacting with his grandchildren by way of kicking a football and the like. He was also given to running some five kilometres per day, even at his age. That in turn intersected with an interest which he had in running marathons and half-marathons. He used to finish mainly in the top three to four for his age group. In 1998 he won the UTAG Travel Australian Veterans' Athletic Championships; that was a middle-distance race of some 1500 metres. He also used to play, occasionally, squash and golf. He and his wife also enjoyed swimming and surfing holidays on the Gold Coast. 26 The effect of that industrial accident in July 2008 was that he has been unable to participate in any of those activities. In effect, a man enjoying an active retirement has been forced into a sedentary retirement, much against his will, desire and ability. Further, he derived considerable satisfaction from continuing in the workforce and so providing for he and his wife without a need to dip into retirement savings or a need solely to rely on old age pension income. 27 This provides an all too human face to what should never be treated just as a systematic failure. Systems fail for many reasons, sometimes because they were not well thought through in the first place; other times, as here, they fail because, however brilliant their conception, they are just not implemented. To describe something as a systematic failure is to camouflage individual failings, both at individual employee level, at immediate supervisory level and further up the chain of command. They are not just systemic failings; they are individual failings. Australia Post, of course, is liable for those individual failings of its various employees. 28 I am well satisfied that Australia Post is not just contrite in respect of the incident, but is also deeply conscious of the effect that the incident has had on Mr Bobart and conscious of the need to ensure, as far as humanly possible, that this statutory breach does not again occur. A presence in court of senior officers of Australia Post is eloquent testimony to that concern. So, too, is Australia Post's practice not just of an impersonal written apology, but of a manager attending face-to-face with this particular injured employee to extend, personally, the apology for the incident on the part of Australia Post. These are mitigating factors. So, too, is the ready cooperation with consequent savings both for Comcare as the body responsible for the administration of the OHS Act, but also for the Court in terms of the freeing up of scarce and publicly-funded judicial resources, which is the result of Australia Post's cooperation with the administration of justice. 29 There is, I am quite satisfied, a timely acknowledgement of liability. That too is a mitigating factor. 30 There are many other factors to which one must have regard in relation to the imposition of penalty in cases such as this. These were helpfully gathered by Madgwick J in Comcare v Commonwealth (2007) 163 FCR 207. I made reference to that judgment and to a summary of other principles which I had offered, in a civil penalty case which arose under different legislation: Australian Communications and Media Authority v Mobilegate Ltd (No 4) (2009) 180 FCR 467 at [28] in Comcare v Commonwealth of Australia [2011] FCA 1043 (Comcare v Commonwealth of Australia). 31 One of the considerations to which Madgwick J makes reference is the need for a penalty to be such as to compel attention to occupational health and safety generally, and to it being a significant aggravating factor that a risk of injury was foreseeable. 32 Here, as I have observed, the intersection between pedestrian and forklift traffic meant that there was clearly, in my opinion, a foreseeable risk of injury. As I have said, that risk was foreseen by Australia Post. It was well recognised. It translated into written policies which were not in turn rigorously enforced on the ground. The end result is, in this instance, an elderly but strikingly vigorous man who has been rendered sedentary, with all of the frustration and vexation that entails. He has been left daily with a reminder of the effects of that injury. That a serious injury was foreseeable is also a given in this case. 33 There was some debate in submissions before me about specific deterrence. It is a given that there is a need in this case for penalty to take into account general deterrence. As to specific deterrence, the evidence discloses that Australia Post has been proactive since the incident in seeking not just to improve its policies, but also to communicate the same to all concerned and, it seems, to enforce them. That is not to say that there is no need at present for specific deterrence to be taken into account. 34 I accept readily that Australia Post is a large organisation with many different locations and many different activities occurring under its control. It is true that Australia Post has been found in the past to have committed breaches of this legislation, but I am not satisfied that there is any systemic culture throughout the organisation of disregard to occupational health and safety obligations. The evidence is quite to the contrary. There has not been put before me any incident of a similar kind in which Australia Post has in the past been found to have contravened the OHS Act. In this sense, the case is to be contrasted with the earlier case of Comcare v Commonwealth of Australia, which involved a repetition of a transgression by the Army similar in nature to an earlier transgression. 35 On the evidence, this is a locationally-specific failure. The need for specific deterrence is nonetheless present, to underscore the importance at that location of a rigorous enforcement of these newly developed policies. More widely, it will also underscore a need for that enforcement to translate across the whole of the organisation. By "enforcement" I mean if need be terminating those, including managers, who fail to enforce the workplace policies. I was taken, in the course of submissions, to an example in the industrial commission, known as Fair Work Australia, of just such enforcement action being taken by Australia Post. 36 It is not, then, to be found in this case that there is a want of corporate intent to enforce. Rather, there has been a want, on this occasion, on the ground, of enforcement. Good intentions are one thing. Good practice on the ground is another. Both are needed in respect of discharging common law and statutory obligations. 37 It is relevant to note that the maximum penalty that is applicable in respect of the breach, that is $220,000. This event could hardly be described as trivial. Reference was made in the course of submission to penalties which had been imposed in other cases. Those submissions, though, were tempered with the acknowledgement that a mathematical approach to the imposition of what is, in effect, a one-off situation on particular facts, was to be eschewed. 38 There was broad agreement between counsel as to a range of penalty which was appropriate for the circumstances of this case: $150,000 to $160,000. That range accords with my own impression of the penalty which is warranted, taking into account discounting factors which I have mentioned, along with a need for specific and general deterrence. In reaching that range I have not tried to compare this case with others and to engage in what would seem to me to be the error of, "is this more or less serious than some cases that were quoted to me?", as opposed to trying to reach a penalty which reflected the gravity of a breach on these facts, with these consequences. 39 The end result, then, is that a penalty of $160,000 should be imposed. The parties are agreed as to the terms of declaratory relief. A draft order has been submitted in that regard. That draft does not, in my opinion, contain any of the vices of generality of the kind deprecated by the High Court in Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53. These are specific declarations tailored to the specific facts and the specific breach in this case. There is a strong public interest in the granting of declaratory relief. The parties have also agreed as to the time which should be allowed for the payment of the pecuniary penalty, namely that the penalty should be paid by Australia Post not later than 5 January 2012. 40 The parties also reached agreement as to an amount of costs which should be awarded. They are, in my respectful opinion, to be commended for that approach. It has saved much in terms of further costs, as well as the time of the Court's Registrar in conducting a taxation. The parties are agreed that costs should be fixed in the sum of $80,000. There is ample power under the rules for the Court to fix costs. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.