Inspector Beacham v Delta Shelving Systems Pty Ltd

The Charge 7The defendant, in an amended application for order, was charged with a breach of s 8(1) of the Occupational Health and Safety Act 2000 ("the OHS Act") by failing to ensure the health, safety and welfare at work of all its employees and in particular, Ali Israr Zohab contrary to s 8(1) of the OHS Act. 8The particulars of the charge were: ... A risk of serious injury arising from employees in particular Ali Israr Zohab having access to dangerous parts of the Koitec KS 150 power press ("the press"), whilst operating that press at the direction of the Defendant. The particulars of the acts or omissions of the Defendant that failed to eliminate the risk are: (a)the Defendant failed to adequately guard plant, namely a Koitec KS 150 power press used by its employees so as to prevent contact by those persons with the dangerous parts of the plant; (b)the Defendant failed to ensure that there was a system of work in place for the operation of the press by its employees that was safe and without risks to health so that employees were at all times isolated from contact with dangerous parts of the press. (c)the Defendant failed to ensure that the spare tongue actuator owned by the Defendant was not used to overcome the effect of a safety switch connected to an access gate installed in the perimeter fence erected around the press; (d)the Defendant failed to provide adequate supervision to its employees working on or with the press so as to ensure that employees were not operating the press whilst having access to dangerous parts of the press; (e)the Defendant failed to conduct an adequate risk assessment and devise safe working procedures in relation to the operation of the press by its employees; (f)the Defendant failed to provide employees with adequate information, instruction and training in relation to the safe operation of the press; (g)the Defendant failed to ensure by supervision, inspection and instruction that any parts of the press and its surrounding perimeter fence were not modified so as to enable safety devices to be overridden; (h)the Defendant failed to ensure that its employees did not; (i)work on the inadequately guarded press; (ii)operate the press in a manner that required the employees to place their hands in the die set area of the press, whilst the press was operational and could be cycled. 9The defendant pleaded guilty to the offence, as charged, in the amended application for order. I am satisfied, on the evidence, that the defendant is guilty of the offence, as charged, and it is appropriate for the plea of guilty to be entered. 10It follows, therefore, that this judgment is concerned with the question of penalty.

Prosecutor's evidence 11Mr M Scott of counsel, who appeared for the prosecutor, tendered an agreed bundle of documents on sentence, which included an agreed statement of facts, which provided: ... 2.At all material times Delta Shelving Systems Pty Ltd [ACN 082 565 357] ("Delta Shelving") was a corporation whose registered office is situated at C/- Wearne & Co, Suite 2, 220 Willoughby Road, Crows Nest in the State of New South Wales. Delta Shelving undertook the business of manufacturing shelving and storage systems. Delta Shelving was incorporated on 8 May 1998. 3.On 29 March 2007 Delta Shelving conducted its business at premises located at 32 Regent Crescent, Moorebank in the State of New South Wales and was an employer. The premises was predominantly a single story factory building with a two floor office at the front of the building face towards Regent Street. 4.The factory floor measured approximately 60 by 20 metres. Attached and marked "X" is a copy of a floorplan of the factory floor. It was well lit with well defined aisled for access, areas for storage of materials, finished product and machinery. The Koitec K150 tonne power press ("the Press") and its point of operation faced directly onto the main northern aisle thoroughfare used for pedestrian and forklift access. This aisle ran the 60 metre length inside of the factory. Directly in front of the Press was an open area allowing pedestrian and forklift access to the other machinery located further to the east. A roller door for pedestrian and forklift access was located next to an 80 tonne hydraulic press ("the 80 tonne") which was adjacent to the Press on the northern side of the factory. 5.As at 29 March 2007 Ali lsrar Zohab ("Mr Zohab") was employed by Delta Shelving as a Press Operator. Mr Zohab had been employed by Delta Shelving for approximately 18 months. He was 25 years old. His main duties involved running and maintaining the Press, the 80 tonne, driving forklifts and strapping pallets. Mr Vanatubucala Cakacakatale was Mr Zohab's direct supervisor. The Press 6.The Press had been installed at Delta Shelving's premises in 2005. The Press was enclosed by a safety perimeter fence ("safety fence") which comprised of 2 interlocked safety gates ("safety gates"), a permanently locked gate and a wall. The interlocking devices on the safety gates ("the safety switches") comprised a "male" and "female" part attached on either side of the safety gate opening. When commissioned the Press could only operate once both safety gates were closed and the male and female parts were locked together. The Press was set up by Delta Shelving to operate automatically and if either of the safety gates was opened whilst it was operating it would cease operation. The safety switches on the gate were the only interlocked safety switches present on the Press. 7.The control panel and reset button for the operation of the Press were located outside the safety fence so that they could not be reached from inside the fence. 8.One function of the Press was that it could also be operated by a hand held yellow "pendant control." The pendant control fed a continuous metal strip from the ultra edge servo drive feeder into the die set area. Once the metal strip reached a specified length and was sensed by the part in sensor the Press would cycle as long as the other sensors were correctly made. 9.Once the safety gate had been opened the Press would need to be manually reset before becoming operational again. The reset button was located on the outside of the fence on the control panel and could only be reset if both safety gates were closed. This made it impossible for a "sole" operator to operate the Press from within the safety fence. Operated in this configuration the Press complied with the relevant Australian Standards 1219.1994 and 4024.1601-2006 and was safe. 10.The die set used in the Press was designed and set up to produce double ended channels (standard product). The die set was unique in that it was built in sections which could be added or removed to change the length of the product as needed. 11.The die set used in conjunction with the Press was done so in automatic mode with the operator outside the fence. The Press operated in automatic with the die set in the following way: i.the ultra edge servo drive feeder was programmed to feed a defined length of metal into the rear of the die set area; ii.the length of metal when fed into this position caused the "part in sensor" to recognise its presence and notify the Press that it was ready to cycle; iii.when the press cycled the top die came down onto the bottom die and pressed a length of metal which had been fed to the front of the Press by two metal ejection fingers in the same process it also cut by guillotine the length of metal in the rear of die area of the Press; iv.when the top die returns to its original position the pressed piece of metal is lifted up and pushed forward by fingers where it slides down a ramp and the newly cut length of metal at the rear of the die area of the Press is pushed forward by fingers into position ready to be pressed; v.as the pressed piece of metal slides down the ramp the part out sensor recognises that the pressed piece of metal has left the die area; vi.once the new piece of metal fed in by the ultra edge servo drive feeder and is in place the Press cycles again. The Incident 12.On 29th March 2007 the Press was being used by Mr Zohab to produce a non standard product, known as specials, being an open ended channel. On the morning of the incident, Mr Zohab had been working on the Press for a period of time producing specials. As the specials were a non standard product they could not be manufactured by the Press in automatic mode as they could not be automatically ejected. This is because the metal ejection fingers could not lift them out of the die set area. Mr Zohab made modifications to the Press which required him to insert his hands into the die set area to retrieve pressed specials and moved the cut blank into the die area. 13.When Mr Zohab was retrieving a special he pressed the modified part in sensor with his arm, which caused the Press to cycle down on his hands. The Press severed Mr Zohab's right hand at the wrist and four fingers of his left hand at or near the palm. He was transported to Liverpool Hospital and underwent immediate surgery. The reattachment of Mr Zohab's right hand and left index finger was successful, however they had extremely limited function and could only manage minor grabbing movements. Reattachment of Mr Zohab's left middle finger was unsuccessful. He wears pressured gloves on a permanent basis. 14.At the time of the incident, the defendant retained a spare tongue actuator for set-up and maintenance purposes. The spare tongue actuator was a small component also known colloquially as a "plunger". It was located in the maintenance manager's office drawer. 15.If the male part of the spare tongue actuator was inserted into the female part of the safety switch it bypassed the operation of the safety switch, so that, when inserted, the Press' electrical safety system "thought" the safety gate was closed but actually allowed the Press to be operated with the safety gate open. The operator could then stand in close proximity to the die set area of the Press, and feed a new piece of metal into the Press with the pendant control, and remove the part from the die set by hand, providing the machine had been switched to manual mode. The Modifications to the Press 16.Mr Zohab made the following modifications to the Press: i.The "part in" sensor, had been moved and modified so that a manually made, sprung metal, boomerang shaped "switch" sat on top of it. This allowed the operator to press this modified switch whilst standing in close proximity to the Press, indicating to the Press that there was a blank in place and that it should cycle; ii.The "part out" sensor was also modified by the placement of a metal clamp over it. This meant that the operating logic of the Press was overridden so that continually thought that there was no pressed part in the die and was able to cycle; iii.Two multi grips had been used to affix a piece of metal in the area where the part in sensor was normally located. The function of these two multigrips has not been determined, although their positioning may have acted as a stopper if the metal being fed in from the de-coiler did not stop as expected; iv.Two reo bars had been welded onto the bottom die to act as guides for manual placing of blanks. Mr Zohab arranged for another worker to weld these onto the base of the die set; v.A large oversized wheel had been attached to the bottom of one half of the gate. This meant that the male and female parts of the interlock switch could not align and required the insertion of the spare tongue actuator to allow the Press to cycle. 17.In addition Mr Zohab had to reprogram the ultra edge servo drive to set the length of the coil feed. This was required as standard procedure when producing channels of different lengths. 18.To operate the Press after the modifications it was necessary to: i.stand inside the safety fence near the front of the Press; ii.use the pendant control to feed the continuous "metal strip" from the de-coiler into the rear of the die area of the Press; iii.press the modified part in switch to cause the Press to cycle as if it were in automatic mode; iv.put your hand in between the die and lift the pressed part out; v.put your hand in between the die and lift the cut metal strip into the die pressing area; and vi.perform ii - v above to press the next length of metal strip. 19.Nobody prohibited Mr Zohab from modifying the Press, or working on it after it was modified. On the morning of 29 March 2007 after the modifications had been made the guarding did not comply with the requirements laid out in Australian Standards 1219.1994 and 4024.1601-2006 in respect of guarding for power presses and machine guarding generally. 20.Some of the modifications to the Press required the use of welding equipment which was held in the company store area. Mr Weerasinghe, the WorkCover engineering expert, guessed that it would have taken 2.5 - 3 hours to be completed. Background to the incident 21.After commissioning of the Press in 2005 it was identified that blanks could be made on it rather than ordering them in. Initially, they were made by an operator standing inside the fence close to the Press and using the pendant control to jog the coil to length. Once the coil was fed in so that the part in switch was made and all other switches i.e. guard, part out, cylinder sensors were made and the operator removed his hand from the pendant the Press would then operate. This was achieved by using the spare tongue actuator. 22.The Press was in an exposed part of the factory, in view of others working in the area as well as persons walking through the factory. The operating section of the Press was approximately 15 metres from the floor supervisors desk, however, whilst seated his back faces the Press. 23.Risk assessments for the Press were completed after commissioning had been conducted, but no risk assessment was conducted for the use of the Press with the modifications made by Mr Zohab. No risk assessment was made for the manual operation of the Press with the Pendant controller using the spare tongue actuator. Guarding 24.The use of both the spare tongue actuator and the yellow pendant by Mr Zohab from within the safety fence contravened AS1219 - 1994 as it defeated the safety interlock switch and allowed access to the moving parts of the Press. 25.There were written warnings on the side of the Press never to use the Press without point of operation guarding in place. 26.There were written instructions in the Press manufacturer's operators manual how to fit and operate point of operation guarding. 27.There were written warnings in the Press manufacturer's operators manual safety rules never to operate the Press without point of operation guarding in place. 28.From 1998 the defendant was aware that Australian Standards AS 1219-1994 Power presses - Safety requirements required point of operation guarding for power presses. 29.The defendant was aware of the need for guards to be in place prior to using machinery. The 80 Tonne Press 30.Located next to the Press was an 80 tonne press. This press was used by Delta Shelving to manufacture specials. The 80 tonne press was operated manually. Manual operation required the operator to place by hand a blank into the base of the die. The operator would then cause the press to cycle and would then by hand remove the pressed piece of metal from the die set area. This machine had point of operation guarding as required by Australian Standard AS1219-1994 and was safe to operate in this way. Details of the systems of work after the incident 31.Shortly after the incident the modifications to the Press were reversed. 32.Delta Shelving issued a safety memorandum regarding the safe operation of the Press. 33.Further safety signage was placed upon the Press. Prior Convictions 34.The defendant has no prior convictions. 12The agreed tender bundle contained the following documents: 1.Agreed Statement of Facts. 2.WorkCover Notices: Prohibition Notice No. 154187; Improvement Notice No. 249983; and Improvement Notice No. 249984. 3.WorkCover photographs taken by Inspector Jelley and Inspector Beacham on 29 March, 2 April, 4 April, 12 April and 12 June 2007. 4.Factual Inspection Reports of Inspector Beacham dated 22 August 2007, No 1, No 2, No 3 and No 4. 5.Operator's Manual for the KS-150 Press. 6.Payslip for Ali Zohab dated 28 March 2007. 7.Australian Standards extracts: AS 1219-1994 - Power Presses - Safety Requirements (extract); AS 4024.1202-2006 - Safety of Machinery - General Principles (extract). 8.Engineering report of Jaya Weerasinghe dated 23 August 2007. 9.Engineering report of James Lawson dated 6 September 2007. 10.Production records for single ended channels on the Press. 11.Risk Assessment for 150 Tonne Press dated 8 September 2006. 12.Prior convictions certificate dated 24 July 2012 and Company Search of Delta Shelving Systems Pty Ltd dated 27 July 2012.

Defendant's evidence 13Mr M Shume of counsel, who appeared for the defendant, read an affidavit of Mr Mark Diacono, who is the Operations Manager for the defendant. He was required for cross-examination. 14Mr Diacono detailed the defendant's operation and history. The defendant was first established in 1984. At the time of the incident, the defendant employed 13 persons. He also set out his background and qualifications. 15Mr Diacono's evidence was that the defendant had an 80 tonne Hydraulic Press ("the 80 tonne Press") and the Koitec KS 150 Power Press. 16The Press was purchased second hand from a company in Melbourne in the State of Victoria. He installed the Press and in the process became aware that there was a need for a number of sensors to be installed into the Press so that it could work safely producing parts automatically. These included an input sensor; an output sensor; two ejection cylinders and two lift cylinders. He arranged for an organisation known as the Press Shop Automation to attend the site to install a de-coiler. 17At the time that the Press was installed, it did not have any of the sensors referred to above, nor did it have a safety fence around the Press. An electrician was commissioned to install the safety circuitry of the safety fence which surrounded and was connected to the automated Press. The safety fence had two Trojan interlock safety switches installed on two gates. By the time the defendant had completed commissioning of the Press, Mr Diacono was satisfied that standard parts could be made without an operator having to stand inside the safety fence. 18Mr Diacono explained how the Press operated and what he described as the "cutting of blanks". The Press removed the need to purchase blanks for the production of standard parts. The defendant purchased pre-cut blanks from external suppliers for the production of all specials that were produced on the 80 tonne Press. 19In or around late 2005 and June 2006, Mr Diacono was asked by the Director of the defendant, Mr Stephen John Eddowes, whether it was possible to cut the blanks on the Press, instead of purchasing pre-cut blanks for the production of specials on the 80 tonne Press. 20Initially, Mr Diacono cut blanks on the Press in manual mode. He subsequently trained Mr Zohab in the process of cutting blanks. 21Mr Zohab worked from inside the safety fence, using a pendant control to manually feed in the lengths of metal into the rear of the die set of the Press. Once the galvanised coil was fed into the rear of the die set, the guillotine part of the die would cut the blank, which would then be removed manually. The Press could not cycle while ever there was a blank in position, as it was necessary for a new length of galvanised coil to be fed in, and this could only be achieved by using the pendant control in "jog to length mode". 22Mr Diacono investigated and identified how he could automate the cutting of blanks. This occurred on or around June 2006. 23Mr Diacono gave evidence in respect of the production of parts by the respective presses which was controlled by Mr Gilbert Baillache, the Operations Manager. He would complete a document known as the Daily Production Sheets on a daily basis. This document identified each of the machines used to make parts on the factory floor. Mr Diacono analysed the Production Sheets for the work carried out on the 6, 8, 9, 20 and 21 March 2007, including one additional undated sheet. His conclusion was that based on the production records for 6, 8 and 9 March 2007, it was not possible for Mr Zohab to have modified the Press in the manner required to produce item 8013 on the Press prior to the day of the incident. In his opinion, Mr Zohab did not make 8013 900 open items on the Press prior to the date of the incident. This was because he said the modifications to the Press would have prevented any standard parts from being ejected. The modification prevented the Press from being operated automatically. 24Mr Diacono said that the company purchased what was known as a spare tongue actuator for use on the Press. This device allowed the Press to be operated so that the blades of the guillotine within the die were properly aligned. Prior to the use of the actuator, guillotine blades had been damaged while being aligned from outside the safety fence. Mr Diacono, initially, was the only person allowed to use the actuator. When it was not used, it was kept in a drawer in his desk. Mr Zohab was permitted to use the actuator after he completed his training to change the tooling on the Press. On two occasions, he saw that the actuator had been removed from his desk and was on the safety fence. On each occasion, he spoke with Mr Baillache and told him the practice was not allowed and was not to continue. Mr Baillache addressed the workforce immediately and advised them that they were not permitted to use the actuator. 25Mr Zohab commenced employment with the defendant on 7 July 2006 as a general hand. He subsequently became the main operator of the Press. Mr Diacono detailed the training which was provided to Mr Zohab. This included training on safety using the Press from outside the safety fence, training on using the spare tongue actuator and training in setting cylinders and how to set the tool for cutting blanks both in manual and automatic mode. Mr Zohab was also trained in carrying out risk assessments on the Press. This included completion of the "Total Preventative Maintenance ("TPM") sheets" which was conducted every fortnight. Examples of TPM sheets completed by Mr Zohab were annexed to the affidavit. 26As part of the instructions provided to Mr Zohab, it was made clear to him that he was to contact Mr Diacono regarding any maintenance on the Press, or if he had any concerns in relation to how the Press was operating. He formed the view that Mr Zohab was a very good technician who had the ability to solve problems. During the commissioning of the press, Mr Diacono developed and implemented a number of Standard Operating Procedures ("SOPs") in relation to the Press. These procedures were: The Safe Loading of Coil onto De-coiler/Straightener; Standard Operating Procedure 150 tonne Uncoiler/Straightener; Standard Operating Procedure 150 ton press Die Changes and Set Ups; and Standard Operating Procedure 150 ton press. 27These procedures were used in the training of workers, including Mr Zohab and were displayed at the front of the Press above the Control Panel. In addition to training in respect of the machine, Mr Zohab received an induction when he commenced with the defendant, including risk assessments, SOPs and maintenance checklists, participation and training provided during toolbox sessions and on the job training in relation to a number of different machines. 28Mr Diacono stated that the Press was also fitted with a sign which warned operators not to place themselves between the dies and not to operate the Press until proper point co-operation guards on safety devices had been provided. 29Mr Diacono's evidence was that on 29 March 2007, Mr Zohab was operating the Press and manufacturing open end steel channel pieces that were to be used for shelf supports. The specifications of these channel pieces were not standard and could not be made on the Press using its normal tooling in automatic operation. His evidence was that the modifications made to the Press were not known to management, or himself, until after the incident. They were not authorised and could only have occurred in the hours immediately prior to the incident. He was informed by one of the floor employees that Mr Zohab had requested that certain reo bars be welded to the machine. The modifications enabled the Press to be operated with the interlocked safety gate open. The practical effect of the modifications was that the safety systems were overridden. 30Mr Diacono's evidence was that the majority of the modifications were made by Mr Zohab on the morning of the incident. 31Mr Diacono stated that as Mr Zohab was a trained operator, he needed little supervision. He said the modifications that Mr Zohab made to the Press were so out of character, they were not possible to predict. He said he basically broke every safety rule that he had been taught. 32Mr Vanatubucala Cakacakatale was the workshop floor supervisor. He spent the majority of his time on the workshop floor. Mr Baillache walked the floor on an hourly basis. However, on the morning of the incident, he was unable to walk the floor. Mr Diacono said it would not have been unusual for a supervisor to see Mr Zohab on the inside of the fence. His job required him to change die tooling and coils. However, he acknowledged it would have been unusual for the Press to be operated from inside the safety fence. 33Mr Diacono detailed the steps taken following the incident. This included workers being retrained in the operation of the Press, including the requirement only to operate the Press from outside the perimeter safety fence. A memorandum was also sent to all staff reiterating the requirements for the operation of the Press, including a reminder that modifications to safety devices were not permitted. A copy of the memorandum was annexed to the affidavit. 34On the advice of WorkCover, a pendant control was attached to the perimeter fence so that it could not be used to operate the Press from within the safety fence. The spare tongue actuator was allocated to Mr Diacono and he was the only person authorised to use it. 35Mr Diacono set out the systems in place at the time of the incident. His evidence was prior to the incident, in addition to its internal systems, the defendant also relied upon audits conducted by external persons in assessing the development and implementation of its safety system. When the business was purchased in 1998, Mr Eddowes engaged the expertise of external consultants, P J Ellis to undertake an audit of the various plant that formed part of the business at the time. Issues identified in the audit were addressed and rectified. 36After purchasing the business, when Mr Eddowes became aware of the lack of safety systems and processes in the business, he joined the Australian Industry Group ("AIG") to obtain information to support the development of the defendant's safety management systems. He remains a member of that organisation. 37The defendant undertook a further site wide audit and assessment of its safety management systems in September 2006 using a Safety Assessment Checklist provided by, and with the assistance of, AIG. 38Mr Diacono also referred to the information and instruction provided to employees. This included a commitment to maintaining the health and wellbeing of staff and visitors by including health and safety as a consideration in all activities and including and maintaining hazard management systems. A safety policy was developed by Mr Diacono after attending a course at AIG. 39The Safety Policy was supported by other policies, such as tool management and SOPs in respect of welding, grinding and wrapping machines. Site safety rules were also in place for all employees and visitors. 40Mr Diacono detailed the training that was provided to employees, including Mr Zohab. This included induction training, training in relevant standard operating procedures, and refresher training with toolbox talks. On occasions, workers would lead the toolbox talks and take other workers through a risk assessment of the plant discussing the risks and hazards associated with the plant and the controls which were to be used. Risk assessments were also undertaken in relation to various production plant used by the defendant. 41Documented systems of work were also developed and implemented. This included a fortnightly inspection program of plant. A maintenance checklist plan was also performed fortnightly on the Press. Prior to the incident, the checklist was last performed on 13 March 2007 by Mr Zohab with remedial action being required in the form of the replacement of the contractor and timers by Mr Diacono on 19 March 2007. 42In addition, management regularly walked the factory floor, speaking with workers and gaining a first hand knowledge that safety initiatives were being implemented by the workers. 43Mr Diacono gave evidence of the assistance that the defendant provided to Mr Zohab. It endeavoured to assist him in returning to work and made several offers to him. Its commitment to return Mr Zohab to work extended to the purchase of a new high reach forklift which only required minimum movement to operate. However, ultimately, Mr Zohab's rehabilitation officer advised that Mr Zohab would be unlikely to return to work. 44Mr Eddowes kept in contact with Mr Zohab until he was told by Mr Zohab's solicitors not to contact him any further. The defendant continued to pay Mr Zohab until 27 October 2010. 45The defendant continues to have a safety policy and safety management systems in place. SOPs, risk assessments, internal and external safety audits and toolbox talks are conducted on a weekly basis, with the defendant remaining committed to continually training its workforce. 46On behalf of the defendant, Mr Diacono was authorised to express its sincere regret and remorse for the injuries suffered by Mr Zohab, the impact of Mr Zohab's injury on his family, the placing at risk to Mr Zohab's health and safety, and for the breach of the OHS Act. 47Mr Diacono said the defendant's management and staff remain deeply affected by the incident. The defendant accepted its responsibility for the incident. 48Mr Diacono stated that the defendant trades in a manufacturing industry and has come under significant stress in the past three years. The stress arises as a result of the weak demand and the high Australian dollar, which has increased the competition from cheap Chinese imports. In order to compete, the defendant has reduced its price by 25 per cent, reducing profit margins to break even. 49The defendant's tax returns for the years ending 2010 and 2011, were annexed to the affidavit. The defendant made a profit of $33,507 for the year ending 2010. It made a loss of $8747 for the year ending 2011. For the year ending 2012, the defendant is in a break even position. 50Mr Diacono stated that he had spoken to Mr Eddowes specifically regarding the defendant's financial position. The assets of the defendant, if liquidated, were valued at between $200,000 and $400,000. He said the reason he had estimated this range was because the defendant had been attempting to sell two welding machines, which to purchase new, would cost $2M, plus seven wire straighteners that would cost $35,000 each. The only offer it has received over the past 12 months in respect of the sale of this equipment was an offer of $15,000 for the seven wire straighteners. 51The defendant has also been attempting to sell surplus stock for a period of 18 months, without success. 52The defendant, in the past 18 months, has downsized his business and made several people redundant. It reduced production capacity by 50 per cent. Mr Diacono estimated the value of machinery, if it could be sold, would be approximately $50,000 - $100,000. He estimated the value of stock, if it could be sold, to be approximately also $50,000 - $100,000. Current debtors to the defendant are approximately $50,000. However, he said it was unlikely the defendant would be able to recover all of this sum. 53The defendant currently has $50,000 in the bank. It owes $200,000 to suppliers and has employee entitlements and liabilities of $200,000. 54Mr Diacono observed that any significant penalty imposed against the defendant had the real prospect of putting the company out of business. He said Mr Eddowes had a real commitment to keeping the company going and believed over time it would be able to trade its way to a more significant profit. 55During cross-examination, Mr Diacono gave evidence about the size of the factory floor and the location of the Press. It was Mr Diacono's evidence that products characterised as 8013 900, could not be manufactured up until the day of the incident on the Koitec 150 Press. He agreed that this product could have been manufactured on the Press after the modifications were made. It was suggested to Mr Diacono that this product could not have been made on the 80 tonne Press, because it did not have a counter. His evidence was that the 80 tonne Press did not have a coil feed, but it did have a counter. He said there was no counter on the de-coiler on the150 tonne Press, however, it had an electronic counter fitted to it. His evidence was that the reference to "set counter to zero at the start of each coil" could be relevant to both the 80 tonne Press or the Koitec 150 tonne Press, because there is a counter on both. 56Mr Diacono was shown photographs of product which were flat at one end and then cut off at the other end and tubular in the middle and asked whether that was the product that Mr Zohab was making on the day. Mr Diacono's evidence was that this was not the product. He agreed that the product Mr Zohab was making on the day looked like product 8013. Mr Diacono was also questioned about the time that it would have taken to make the modifications to the machine, including the use of welding equipment which would have resulted in noise and sparks occurring. 57His evidence was that he did not ask Tran, the welder, when he carried out the work on the Press. Although he spoke to him after the incident, his evidence was that it had been a traumatic morning and he did not ask him about the modifications to the Press. He agreed that the machine was not being used in accordance with the Australian Standard. 58His said that the business was much the same as a fabrication shop with it not being unusual for grinding and welding to be taking place in the workplace. 59Mr Shume also tendered an extract of the transcript of proceedings of matter No IRC 380 of 2009 (pages 128 - 148). This matter related to a prosecution brought pursuant to s 8(1) by virtue of s 26(1) of the OHS Act against Stephen John Eddowes. Mr Eddowes pleaded not guilty to the breach. The prosecution was ultimately withdrawn. 60The transcript contained the evidence of James Neill Lawson, who was an inspector of WorkCover at the time of the incident. His evidence was that when the machine was set up as it was on the day of the incident, it produced a single-ended piece of equipment. The first demonstration on the Press after the incident produced a double-ended piece of equipment when the Press was running in full automatic mode. His evidence was that the way the machine was set up on the day of the incident was dangerous. He said even an operator with limited experience of a few weeks on the Press would have understood that the way the machine was set up on the day of the incident was obviously dangerous.

Relevant principles 61The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the OHS Act. Their Honours stated at [8] - [15]: [8]The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing. [9]In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: '[I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion.' [10]The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474 as follows: '[I]t is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ... [11]The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) ("Capral") 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows: 'The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27: Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence.' [12]On the issue of foreseeability, the Full Bench in Capral also stated at 646; 62 - 63: 'The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd [1999] 92 IR 188 (at 209 - 210) in these terms: '... reliance on "hindsight" must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to 'ensure ... health, safety and welfare at work' and the decided cases which make plain the nature of the obligation.' [13]It is also necessary to consider the damage and injury suffered in the context of the evidence and "in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries which have been suffered, or which may have been suffered, and the gravity of the offence" (Capral at 650; 66). On that point the Full Bench in Capral stated: 'We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5, Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 377 at 378, Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456, Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131, WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and WorkCover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) (at [22]).' [14]The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows: '[B]oth aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Workcover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [40]- 43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.' [15]In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]: '[I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c).'

Consideration 62The primary consideration, as set out in the above principles, requires a determination of the objective seriousness of the offence. This involves examining the nature and quality of the offence, as set out in the agreed statement of facts and the evidence. 63Both counsel acknowledged that this was a guarding case which involved a serious offence. The risk to safety arose because Mr Zohab modified the operation of the Koitec K150 tonne power press, so that the sensors, which effectively acted as a safety barrier, were bypassed, so as to enable him to produce a certain product with the machine. 64Clearly, the modification to the operation of the Press, meant that its operation became extremely dangerous. Prior to the modifications, the way the Press operated was perfectly safe. Although it is unclear from the evidence when the modification to the Press occurred, it is more likely than not, that it occurred on the day of the incident. 65The evidence of Mr Diacono and Mr Jaya Weerasinghe, an engineer who provided a report, was that it would take somewhere between 1½ - 2 hours to carry out the modifications. On the day of the incident, Mr Zohab commenced work at 6.00am, with the incident occurring at approximately 10.00am. 66I am not satisfied to the relevant standard, that the prosecutor proved that the modifications occurred prior to the date of the incident. It follows, therefore, that this case is distinguishable from many of the guarding cases which have been the subject of prosecutions before this court, in that the Press was without point of operation guarding in place for a relatively short period of time. 67The defendant also failed to provide adequate supervision to Mr Zohab. Although the defendant had two supervisors, Mr Baillache and Mr Cakacakatale, on the morning of the incident Mr Baillache was unable to undertake his hourly rounds of the premises because of another matter that took his time. Mr Cakacakatale was present, although the evidence does not disclose what he was doing on the morning of the incident. The evidence does disclose that Mr Zohab was regarded as an experienced operator, who was frequently inside the safety fence of the Press to carry out required work, that being, the replacement of coils and adjusting the die settings. 68I find that the defendant failed to adequately guard the Press and ensure that Mr Zohab did not work on an inadequately guarded Press which required the operator to place his hands in the die set area of the Press while it was operational and could be cycled. 69Mr Scott submitted that "Mr Zohab was habituated deliberately by the company to working with this machine without the guard in place, without the interlocking safety switches operating". 70The evidence is that shortly after the Press arrived, Mr Diacono provided Mr Zohab with three months full-time training under his supervision on the Press. Part of the training related to the safe use of the Press and it operating outside of the fence. Part of it also related to Mr Zohab being trained as a die setter. This required him to use the spare tongue actuator and to allow him to set the tooling on the Press. On the evidence, the particular that the defendant failed to provide adequate information, instruction and training in relation to the safe operation of the Press is not established. 71There was also a requirement to use the actuator when moving from a manual operation to an automatic operation of the Press. This may have occurred on two or three occasions per week, but the evidence does not support a finding that it occurred on a fulltime basis and that Mr Zohab was habituated to operating the Press without the guard in place. 72I accept that the evidence is that the changes made to the Press were not sanctioned or approved by the defendant and were not even known to have occurred by management. 73It has been emphasised on numerous occasions by this Court that an employer must be proactive in ensuring health and safety. The obligation upon the defendant was to ensure the safety of its employees. It extends not just to the careful and observant, but to the hasty, careless, inadvertent, inattentive and even foolish: see WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 at 257 and the extensive summary of the principles undertaken by Walton J Vice-President in WorkCover Authority (NSW) (Inspector Howard) v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125 at [181] - [194]. 74I would add that such duties are also owed to the enthusiastic and committed employee who is motivated by a desire to maintain the productivity of his/her employer's operations. The proactive nature of the duty was described in forceful terms by Hill J in WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 at [85] where his Honour said: ... employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time at the workplace". 75Although the defendant had, on its face, well documented comprehensive safety procedures, it is clear that there was a breakdown in the system of work. The supervisors of Mr Zohab should have been aware, and should also have made enquiries, at the very least, when welding equipment was being used at the Press. Welding would have generated sparks and smoke at the Press. Although I am mindful of the evidence that the defendant's undertaking involved the fabrication of steel, and therefore the use of welding equipment, there was a breakdown in the supervisory system that did not result in either of the supervisors noticing that work was being carried out on the Press. It follows that there was a failure to adequately supervise Mr Zohab. 76The evidence demonstrates that the defendant has extensive occupational health and safety procedures documented, however, employers must ensure that the procedures laid down are regularly brought to the attention of employees and reinforced. I note in this respect the observations of the Full Bench in Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143 at [16]: Similarly, it is important for employers to actively ensure that instructions given are both sufficient for and complied with by employees. We refer to the judgment of Walton J, Vice-President in WorkCover Authority (NSW) (Inspector Glass) v Kellogg (Australia) Pty Ltd (1999) 101 IR 239 at 257 as follows: "In any event, the mere stipulation of procedures and instructions to carry out the work may not be enough to satisfy the requirements of s 15 of the Act. The employer should ensure that procedures and instructions are actively and positively complied with by employees. In State Rail Authority (NSW) v Dawson (1900) 37 IR 110 at 121 and 125 the failure by a foreperson to supervise a qualified and experienced linesperson to the extent of instructing the employee as to the safest available method (where the employer had laid down a procedure for work and various methods of performing the work were available) would constitute a breach of s 15 (although in that matter it was found the failure was that of the foreperson and not the employer). I note that in an English High Court case, Pope v Gould (HM Inspector of Health and Safety, 20 June 1996, unreported but cited at p 44 of Redgrave's Health and Safety 1998, Third Edition) it was held in England under the equivalent of s 15, that it is not a sufficient defence for an employer to demonstrate that he had instructed the employee to operate machinery in a particular way and the employee had not followed his instructions. There, it was held, that the legislative provision was not concerned solely with the giving of instructions; rather it imposes upon the employer positive duties in relation to ensuring safe systems of work and safe machinery. It was held not to have been sufficient for instructions of a health and safety nature merely to have been given to employees; an employer must also ensure that those instructions are carried out (see also Haynes v CI & D Manufacturing Pty Ltd (1995) 60 IR 149 at 181-182, Kirkby v A & MI Hanson Pty Ltd (1994) 55 IR 40 at 53 and McMartin v Broken Hill Proprietary Co Pty Ltd (1988) 100 IR 241 at 254)." 77While the consequences of an accident will not, of itself, dictate of the seriousness of the offence, the occurrence of serious injury, as has occurred here, manifests the degree of seriousness of the risk to health and safety: Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [32] and the cases referred to therein. See also Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337. 78It is necessary to assess the degree of culpability for the breach of the OHS Act that can properly be attributed to the acts or omissions of the defendant in order to determine the gravity of the offence to which the defendant has pleaded guilty. The failure here was to adequately guard the Press and to ensure that the systems of work that were in place for the operation of the Press were safe so that employees were at all times isolated from contact with dangerous parts of the Press. Mr Zohab was able to proceed unchecked to carry out dangerous modifications to the Press without being detected by supervisors. 79In mitigation, Mr Shume submitted that the fundamental changes to the Press were unforeseeable in the sense of why an employee would adopt the approach that he did. 80The seriousness of the risk, and the ease of removing that risk, renders this offence, as submitted by the prosecutor, to be in the middle of the range of seriousness. 81Following the incident, the defendant organised a toolbox talk in which workers were retained in the operation of the Press, including the requirement only to operate the Press from outside the perimeter safety fence. In addition, as disclosed in the evidence of Mr Diacono, a memorandum was sent to all staff reiterating their requirements for the operation of the Press, including a reminder that modifications to safety devices were not permitted, the correct use of the actuator and a prohibition against multi person operation of the Press. Other steps, including attaching the pendant control to the perimeter fence so as to preclude the operating of the Press from inside the safety fencing and the allocating of the spare tongue actuator to Mr Diacono, occurred.

General deterrence 82I consider it is appropriate to once again draw attention to the need for employers to ensure that all power presses and machines are properly guarded, so that employees are not exposed to risks to their health and safety when operating dangerous machinery. It is therefore appropriate that I include in the penalty an element for general deterrence in determining penalty. 83Incidents such as this should not be occurring in industries. The very reason that social legislation, such as the OHS Act and its predecessor, the Occupational Health and Safety Act 1983, not to mention the Factories, Shops and Industries Act 1962 were introduced, was to eliminate risks of accessing dangerous machinery.

Specific deterrence 84I accept, in light of the evidence given by Mr Diacono, this is not a case which calls for the imposition of some additional significant punishment aimed at deterring the defendant from further offending against the OHS Act and for the purposes of compelling the defendant's attention to occupational health and safety issues, so that persons are not exposed to risks to their health and safety. 85The attitude of the defendant to workplace safety and the procedures that it had in place prior to the incident and subsequently, are relevant to specific deterrence. However, as the defendant is still operating, I include a component in the penalty for specific deterrence.

Subjective factors 86The prosecutor acknowledged that there were no aggravating features that would trigger the application of s 21A(2) of the Crimes (Sentencing Procedure) Act 1999 ("CSP Act"). The prosecutor further conceded that the offence was not part of the plan, or organised criminal activity (s 21A(3)(b) of the CSP Act). 87Mr Diacono, on behalf of the defendant, expressed remorse (s 21A(3)(i) of the CSP Act). I find the defendant entered a formal plea of guilty to the amended charge at the earliest opportunity. It is therefore entitled to a discount of 25 per cent as a result of the utilitarian benefits offered by the plea: R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383. 88The defendant was established in 1984 and has no prior convictions. The occupational health and safety systems referred to in the evidence of Mr Diacono, and the changes that occurred after the incident demonstrate, in my view, that the defendant has a history of very good industrial citizenship, which I take into account. 89I find that the defendant, for reasons already outlined in this judgment, is unlikely to re-offend. I also find that the defendant co-operated with the WorkCover Authority of New South Wales. 90The Full Bench in Corinthian Industries (Sydney) Pty Ltd v WorkCover Authority of New South Wales (Inspector Wilson) (2000) 99 IR 159 stressed the importance of taking into account good industrial citizenship and the compassionate steps taken in respect of the injured worker. Their Honours observed at [17]: We do not consider that the history of good industrial citizenship of the appellant, having regard to its prior record and the long period of operation of its business, was sufficiently taken into account. We also refer to the careful and compassionate steps taken by the appellant as to the welfare, rehabilitation and continuing employment of the injured worker. The reason we have made specific reference to that latter matter is that it does not seem to have been often referred to in other judgments in this area. 91I have agonised over the penalty that should be imposed for this occupational health and safety crime. This has led me to consider a number of earlier Full Bench judgments of this Court involving the failure to properly guard machines: WorkCover Authority of New South Wales (Inspector Lancaster) v Burnshaw Constructions Pty Ltd (2002) 121 IR 119; WorkCover Authority (NSW) (Inspector Batty) v Graincorp Operations Ltd [2002] NSWIRComm 49 and WorkCover Authority of New South Wales (Inspector Barber) v Gundagai Shire Council [2002] NSWIRComm 243; (2002) 118 IR 193 where the Full Bench stated: [17] ... The nature of the crush injury suffered by Mr Jones when his right forearm became trapped in the identified nip point between the metal lip of the bin lifter on the metal cradle and the rear of the hopper of the compaction unit are objectively serious on any view. We accept without issue the force of the joint submissions on the requirement for guarding such dangerous machinery expressed in paragraph 8 in the following terms: "The requirement for employers and other persons to identify and safely guard all dangerous parts of machinery used at work has been recognised for decades in decisions of the Commission and its predecessors, as well as in the Chief Industrial Magistrate's Court and Local Court." [18] Given that view, with which we concur, the requirement of public interest is manifestly evident in the matter before us. As has been expressed by this Court repeatedly in like and similar terms, the Occupational Health and Safety Act and the obligations arising there from requires an employer to look ahead and to seek out and foresee dangers even when those dangers have not crystallised to an incident or accident... 92While comparisons on a case-by-case basis do not assist the determination of penalty, the general principles stated in these cases are of some particular assistance, especially in respect of the objective seriousness of the offence and the importance of general deterrence. It is also often stated, with emphasis, that one important consideration is the available maximum penalty. In this case, given that the defendant has no prior convictions, the maximum penalty is $550,000.

Capacity to pay 93Mr Shume made an application pursuant to s 6 of the Fines Act 1996 ("Fines Act"). 94I have already set out the financial position of the defendant. The defendant who operates in the manufacturing industry has reduced its staff numbers. It has also reduced its prices by 25 per cent, which has resulted in it running at a break-even position. Mr Shume submitted: We're not saying for the purposes of section 6 that your Honour can't impose a fine. What we're saying to your Honour is that if your Honour was to impose a significant fine, the viability of this particular business would become questionable. Your Honour can see based on current assets, current liabilities, and the way work is going, the fact that they have reduced their output ability by 50 per cent, that this particular company is under significant strain. We only ask that your Honour take that into account for the purposes of imposing a fine. 95The principles to be applied in respect of such an application were discussed by me in Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100 at [57] - [58]. [57]The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader [2002] NSWIRComm 25; (2002) 112 IR 284 are as follows: [83]The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50): 'It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as (2002) 112 IR 284 at 309 far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.' [84]This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82): '... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76). However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed: '... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. ...... When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ...' [85]I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476: 'Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86.' (See also WorkCover Authority (NSW) (Inspector Hopkins) v Michael Wheritt t/a M J Wherritt Concrete Pumping Services [2002] NSWIRComm 16 at pars 59-60.) [58]The Full Bench in WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363 considered various judgments where s 6 of the Fines Act was considered and observed at [35]: [35]The relevant principles in relation to the application of s 6 of the Fines Act have been collected in a number of decisions in this jurisdiction. We adopt those principles in this judgment: Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209; Department of Mineral Resources of NSW (Chief Inspector Terrey) v A M Hoipo & sons Pty Ltd (2000) 99 IR 137 at [48] - [51]; Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of NSW (Inspector Glass) (2001) 106 IR 435 at [56] - [57], [67], [81] - [83]; Inspector Green v Camilleri Properties Pty Limited at [21]. Applying these principles, we do not consider that there is any proper basis for the application of s 6 of the Fines Act in this case. 96Having regard to the above authorities, the relevant means of the defendant, and having considered the evidence relied upon, I find that the defendant has discharged the onus upon it in respect of an incapacity to pay. I propose to exercise the discretion conferred upon me by s 6 of the Fines Act. I therefore shall significantly reduce the amount of fine which would have otherwise been ordered to be paid by the defendant. 97I am mindful of, and respectfully agree with, the decision of Wright P in Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 where his Honour observed that the mere difficulty a defendant has to pay a fine should not deter the Court from imposing substantial fines for breaches of the OHS Act. His Honour's approach was followed by Walton J, Vice-President in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462. 98The maximum penalty in respect of the defendant is $550,000. I impose a fine of $60,000 on the defendant. I would encourage the Registrar of the Court to consider granting any application to pay the fine by instalments. 99The prosecutor seeks a moiety and costs, which I propose to grant.

100I make the following orders: 1.The offence is proven and a verdict of guilty is entered. 2.The defendant is convicted of the offence, as charged. 3.The defendant is fined an amount of $60,000 with a moiety thereof to the prosecutor. 4.The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

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