Inspector Beacham v J & L Marble Pty Ltd

Inspector Beacham v J & L Marble Pty Ltd - [2009] NSWIRComm 100 - NSWIRComm 2009 case summary — Zoe

[13]

1 J & L Marble Pty Ltd ("the corporate defendant") is a company in the business of manufacturing kitchen and vanity bench tops from reconstituted quartz stone slabs ("the slabs"), at its premises at 12-14 Harris Street, Condell Park, in the State of New South Wales. Each slab weighs approximately 200 kilograms and is approximately 3 metres long, 1.3 metres high and 20 millimetres thick. 2 Mr Jing Qiang Ji and Mr Ji Liang Gao ("the personal defendants") are directors of the corporate defendant. 3 At approximately 9.00 am on 29 September 2006, Ming Xing Wang, a labourer employed by the corporate defendant and Wei Jie Jiang, a stonemason employed by the corporate defendant, began moving three slabs at a time with a forklift. The total weight of the slabs was in excess of 600 kilograms. As the slabs came into contact with the ground adjacent to a receiving stack, the clamp device on the forklift automatically disengaged. The three slabs fell in the opposite direction from the receiving stack pinning Mr Wang against an opposing stack of slabs. Mr Wang suffered severe abdominal injuries and underwent emergency surgery. He never regained consciousness following surgery and died on 27 October 2006, as a result of complications in respect of the abdominal injuries he sustained in the incident. 4 J & L Marble, Jing Qiang Ji and Ji Liang Gao, the defendant, were charged under s 8(1) of the Occupational Health & Safety Act 2000 ("the Act"). Mr Ji's and Mr Gao's charge arose pursuant to s 26(1) of the Act. These sections relevantly provide: 8 Duties of employers (1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. ... 26 Offences by corporations-liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or

[18]

Evidence 8 Mr M Cahill of counsel, who appeared for the prosecutor, tendered the following evidence in the sentencing proceedings: (i) a statement of agreed facts in respect of the prosecution against J & L Marble; (ii) a statement of agreed facts in respect of the prosecution against Mr Ji; (iii) a statement of agreed facts in respect of the prosecution against Mr Gao; (iv) a factual inspection report of Inspector Peter Beacham dated 31 October 2006; (v) a factual inspection report of Inspector Peter Beacham dated 6 November 2006; (vi) a factual inspection report of Inspector Peter Beacham dated 16 November 2006; (vii) a factual inspection report of Inspector Peter Beacham dated 4 December 2006; (viii) a factual inspection report of Inspector Peter Beacham dated 15 December 2006; (ix) a factual inspection report of Inspector Peter Beacham dated 20 December 2006; (x) photographs taken by Inspector Peter Beacham on 25 October 2006, 2 November 2006, 9 November 2006, 29 November 2006 and 12 December 2006. The photographs show the layout of the premises, the forklift with its attachment for lifting the slabs, A frames used to support stacks of slabs and the forklift moving the slabs; (xi) an engineering report taken by Inspector Peter Beacham on 25 October 2006, 2 November 2006, 9 November 2006, 29 November 2006 and 12 December 2006; (xii) a supplementary report of Mr Anil de Silva dated 15 February 2009; (xiii) a further supplementary report of Mr Anil de Silva dated 9 April 2009. 9 The agreed statement of facts for the corporate defendant, excluding formal parts, stated: .. 3. At all material times the defendant conducted a business manufacturing kitchen and vanity bench tops at 12- 14 Harris Street Condell Park in the State of New South Wales (the premises). 4. At all material times Mr Jing Qiang Ji (Ji) and Mr Ji Liang Gao (Gao) were directors of the defendant. 5. At all material times Mr Ji and Gao were jointly responsible for managing the health and safety of employees at the premises. 6. At all material times the defendant was an employer. Background 7. At all material times, the defendant employed the following persons to perform work at the premises:

[20]

At all material times the defendant owned and operated a Toyota forklift, model number 42-5FG25 (serial number 405FG25-19793) (the forklift). 9. At all material times the defendant owned a forklift jib attachment (the jib attachment) and an Aardwolf Lifter 60 (the Lifting Clamp), which were fitted to the forklift. The Work Being Performed 10. The defendant manufactured kitchen bench tops and vanity tops from reconstituted quartz stone slabs (the slabs). 11. The 3 slabs the subject of these proceedings were supplied to the defendant by WK Marble & Granite Pty Ltd [ACN 074 331 981]. 12. The slabs were stored in an open-air storage yard. There were fifteen separate storage areas in the yard, with each storage area consisting of a stack of slabs. Each stack of slabs was supported by an "A-frame". The A-frames maintained the stacks in a near vertical position. 13. Each slab weighed approximately 200 kilograms and was approximately 3 metres long, 1.3 metres high and 20 millimetres thick. The System of Work 14. In order to move slabs around the storage yard (including the unloading of slabs on delivery to the premises, the relocation of slabs within the various storage stacks and movement to and from the cutting and polishing work areas within the premises) the defendant utilised its forklift fitted with the jib attachment and the Lifting Clamp. 15. The jib attachment was comprised of a support frame and a fixed jib arm, which was welded to the top of the support frame. The defendant had the jib fabricated some years prior to the subject incident. 16. The Lifting Clamp was attached at the end of the jib and was used to lift and move the stone slabs. The jaws of this lifting clamp were capable of accommodating up to three slabs of the size in use at the premises. 17. Once located over the chosen slab(s), the jaws of the lifting clamp were engaged by pressing a button on the outer side of the clamp prior to lifting. The jaws of the Lifting Clamp were designed to automatically disengage when the slabs were lowered upon a stack. 18. The method adopted by the defendant's employees for the movement of slabs at the premises required one employee to assist the forklift driver with the transfer of the slabs. 19. The assistant was responsible for selecting the number of slabs to be moved in each lift; levering the slabs to be moved away from the stack with a pinch bar so that the Lifting Clamp could be attached; and attaching the Lifting Clamp. 20. The assistant was also responsible for holding the slabs whilst they were being manoeuvred by the forklift, so as to keep them steady, and when the slabs had been moved by the forklift to their destination, the assistant was responsible for guiding the slabs into correct alignment with the receiving stack. 21. The mast of the forklift partly obscured the vision of the forklift driver forward of the machine and restricted the forklift driver's vision of the lifting attachment, the lifting clamp, the assistant and parts of any load that had been picked up with the clamp. 22. As the forklift driver's vision was restricted, the assistant was responsible for providing verbal directions to the forklift driver concerning the lifting, manoeuvring and lowering of the slabs moved by the forklift. 23. When the slabs were lowered into position in front of a stack and the jaws of the lifting device automatically disengaged, the assistant was required to push the slabs from the vertical into its resting position on the new stack. 24. The defendant did not place any limit on the number of slabs to be lifted in a single lift with the forklift jib arm and Lifting Clamp. The usual practice at the premises, as developed on the job was for the defendant's employees to move up to three slabs at a time with the forklift jib arm and Lifting Clamp. The Incident 25. At approximately 8.00am on 29 September 2006 Wang and Jiang commenced work at the premises. Wang was undertaking his duties as a labourer and Jiang was performing his duties as a stone mason. 26. At approximately 9.00am, Wang and Jiang began moving slabs in the storage yard at the premises. The slabs were being transferred to an adjacent stack, in order to gain access to another slab within the stack. 27. At all material times Jiang operated the forklift. 28. At all material times, Wang assisted Jiang in the movement of the slabs. 29. In the course of moving various slabs between two stacks, Wang attached the Lifting Clamp to three slabs of Taurus Brown Pearl Quartz Stone. Jiang then lifted the three slabs with the forklift and manoeuvred the forklift approximately 1 - 1.5 metres to an adjacent stack. At the same time, Wang held the edge of the slabs to prevent them rotating horizontally. 30. The total weight of the materials being lifted in the subject lift was in excess of 600 kilograms. 31. Jiang positioned the forklift in front of the adjacent stack and at the verbal direction of Wang, proceeded to lower the three marble slabs onto the front of the adjacent stack. At this point in time Jiang could not see Wang as his vision was obscured by the forklift jib attachment and mast. 32. As the slabs came into contact with the ground adjacent to the receiving stack, the clamp device automatically disengaged. 33. Jiang then operated the lifting mechanism on the forklift, lifting the jib attachment and clamp away from the slabs and then commenced reversing the forklift away from the relevant stack. 34. Whilst Jiang commenced reversing the forklift, he heard shouting. Jiang stopped the forklift and alighted. After alighting from the forklift, Jiang found Wang pinned against the opposing stack by the three stone slabs which had just been relocated with the forklift. Each of the three slabs had cracked and broken at or about the point at which Wang was entrapped. 35. Rather than being relocated against the receiving stack as intended, the three slabs fell in the opposite direction, pinning Wang, at about his waist level, between the three slabs and the opposing stack. 36. Jiang attempted to lift the broken portions of the three slabs off Wang. However, due to the weight of the broken portions of the three slabs, Jiang was unable to release Wang. Jiang then called out to Nguyen for assistance and when Nguyen reached the subject stack, together they manually lifted the slabs off Wang. 37. When released, Wang fell to the ground. 38. Jiang then ran to the office and arranged for an ambulance to be called. 39. At the time of the incident, Ji and Gao were not present at the premises. Ji arrived at the premises shortly before the ambulance. 40. Wang was conveyed by ambulance to Bankstown Hospital where he was treated for severe abdominal injuries. Wang was transferred to Liverpool Hospital later that day where he underwent emergency surgery. 41. Wang never regained consciousness following surgery and his condition continually deteriorated. Wang died on 23 October 2006, whilst an inpatient at Liverpool Hospital, as a result of complications of the abdominal injuries he sustained in the subject incident. 42. On 25 October 2006 WorkCover was notified of the fatal incident to Ming Xing Wang. Investigation of the Incident 43. On 25 October 2006, Inspector Peter Beacham attended the premises of the defendant and made observations contained in a Factual Inspection Report dated 31 October 2006. Attached and marked with the letter "A", is a copy of the Factual Inspection Report. 44. On 2 November 2006, 9 November 2006, 29 November 2006, 12 December 2006 and 15 December 2006 Inspector Beacham attended the premises of the defendant and made observations contained in Factual Inspection Reports numbered 2 to 6. Attached and marked "B" "C", "D", "E" and "F", respectively, are copies of the Factual Inspection Reports dated 6 November 2006, 16 November 2006, 4 December 2006, 15 December 2006 and 20 December 2006. 45. During the course of his inspection at the premises on these occasions, Inspector Beacham took a number of photographs. Attached and marked with the letter "G", is a copy of the photographs. 46. Annexed and marked with the letters "H", "I" and "J", respectively, are copies of the 3 engineering reports prepared by Mr Anil De Silva. Failure to Provide and Ensure that Plant was Safe and Without Risk The Toyota Forklift 47. An inspection of the Toyota forklift revealed that the forklift had two load plates. There was a genuine load plate mounted upon the forklift, as well as a second load plate located below it. 48. The second load plate contained information that did not match with the forklift's identification numbers and physical characteristics. It also did not contain any entries relevant to the safe working load limits of the subject forklift when fitted with the defendant's jib attachment. 49. The genuine load plate contained the following information: G.V.W UNLADEN 4090 kg G.V.W UNLADEN 4090 kg MODEL 42-5FG25 SERIAL No 405FG25-19793 MAX. HEIGHT OF LIFT 3700mm MAX. BACK TILT 3 DEGREES TYRES SOLIDS

[23]

(d) name of attachment manufacturer (and importer if required); (e) type; (f) production or serial number; (g) weight of the attachment and distance of its centre of gravity from the attachment mounting face; (h) rated capacity of the attachment" 54. Apart from the handwritten words "Max 300 kg" on the jib attachment, the defendant did not have any information or documentation in relation to the manufacturer, model or structural capacity of the jib attachment. 55. Further, there was no device securing the jib attachment to the forklift tines as required by AS 2359.6 clause 11.1.1.5. In this regard Clause 11.1.1.5, Securing of Attachments provides: "attachments shall be designed and manufactured in such a way that:  unintentional detachment from the fork carriage is prevented;  lateral displacement is prevented." Failure to provide and maintain a safe system of work 56. At the time of the incident the defendant had no formal, documented occupational health and safety systems in place at the premises. Prior to the incident the defendant had a General Company Policy which dealt, in part, with occupational health and safety in a general way. 57. At the time of the subject incident the defendant had not carried out a formal documented risk assessment with respect to the operation of the forklift, the jib attachment and/or the Lifting Clamp. 58. Further, at the time of the subject incident no formal documented risk assessment had been conducted in relation to the movement of stone slabs at the premises. 59. The forklift was not operated in compliance with the requirements outlined in AS2359.6. AS2359.6 clause 14.2.1, General states: "Only trained and authorized personnel shall operate a powered industrial truck…Operators shall pay particular attention to the operating environment, including other persons, and fixed or movable objects in the vicinity, and shall safeguard pedestrians at all times" 60. At the time of the incident, the operator of the forklift was not qualified to perform scheduled work as a forklift driver. Jiang did not have a license to operate the forklift; nor was Jiang in the process of being trained in forklift operations in accordance with the regulation, including maintenance of a record or log of his training. 61. Further, in the course of moving the subject slabs, Jiang did not have sufficient regard to the operating environment and, in particular, to other persons in the vicinity such as Wang, as required by AS 2359.6 clause 14.2.1. 62. At the time of the incident Jiang could not see where Wang was standing as his view was obstructed by the forklift jib attachment and mast. In his record of interview, Jiang stated that when he was moving slabs with the forklift, his attention was focused on the slabs and he relied upon oral rather than visual cues from the person assisting him in relation to the placement of the slabs. 63. Further, in accordance with the defendant's system of work, the person assisting the forklift driver, rather than the forklift driver, determined the weight of the load to be lifted by selecting the number of slabs to be lifted during each lift. 64. The defendant's system of work placed no limit on the number of slabs to be lifted. As a consequence up to three slabs were lifted on each lift at the discretion of the labourer assisting the forklift driver. 65. As each of the slabs weighed, on average, in excess of 200 kilograms, the safe working load of the forklift fitted with the defendant's lifting jib was exceeded during the subject lift when 3 slabs were being moved in and about the premises. 66. Further, the defendant's system of work involved the assistant in manually attaching the Lifting Clamp to the slabs when they were being picked up. 67. However, because the jaws of the Lifting Clamp automatically disengaged when the slabs were lowered to the ground adjacent to a stack, the assistant did not need to manually detach the Lifting Clamp from the slabs at the time they were lowered to the ground. 68. As a consequence of the requirement to attach the Lifting Clamp to the slab(s), the assistant was required or permitted during that task to place part or all of this body in the middle of the slab(s) rather than remaining at the edge of the slab(s). This occurred in the course of all transfers, including lifts involving multiple slabs when the combined weight of the slabs was in excess of 400 kgs for two slabs and 600 kilograms for 3 slabs. 69. The report dated 15 February 2009 prepared by Mr De Silva discloses the weight transfer involved in the movement of one slab from the vertical into position on a stack. When a lift involved handling 3 slabs weighing a total of about 600 kilograms, at 10 degrees from the vertical, the 3 slabs would exert a force of about 1,531.59 Newtons or 156 kilograms. Failure to Provide Information, Instruction or Training 70. Prior to the incident Jiang was unaware of the safe working load/capacity of the forklift when fitted with the forklift jib attachment. 71. Furthermore, Jiang was unaware where the working load of the forklift was to be found. 72. The defendant did not provide its employees with access to a copy of the manufacturer's operations manual in relation to the Lifting Clamp. 73. Prior to the incident Jiang was not instructed that the clamp back plate of the Lifting Clamp should face the stack to which the slabs were being transferred. 74. Prior to the incident the defendant did not provide any instructions regarding the number of slabs that could be lifted by the forklift at any given time, and in particular failed to instruct employees not to lift more than one slab at a time. 75. The defendant did not instruct its employees, and in particular the forklift driver, that the forklift driver must be able to see that the assistant had moved to a position clear of the slabs before lowering the clamp to the point at which the slabs would be automatically disengaged from the clamp. 76. At the time of the incident there were no safety training records for employees who worked at the premises. 77. The defendant did not provide adequate training on how to safely transfer stones from one stack to an opposing stack. 78. The defendant did not provide adequate training to employees with respect to the operation of the forklift, including the use of the lifting attachment and the Lifting Clamp. Prior to the incident Jiang was shown how to drive the forklift. However, he received no formal training in relation to the operation of the forklift, including the use of the lifting attachment; nor was he instructed to maintain a training logbook for users and operators of industrial equipment with respect to use and operation of the forklift. Failure to Provide or Ensure the Provision of Supervision 79. At the time of the incident, Wang had been working at the premises for approximately four weeks. The defendant initially provided Wang with supervision in the performance of his duties, including assisting with the transfer/relocation of slabs in and about the premises. However, constant supervision was suspended when the defendant determined that Wang was conducting his work appropriately. 80. At the time of the incident Jiang was not being supervised by a competent person in the performance of his duties as a forklift operator. 81. There was no supervisor at the premises at the time the incident occurred. System of Work Following the Incident 82. Since the incident the defendant has changed the system of work with respect to the movement of slabs at the premises, in that the defendant has: i. Devised and implemented written safety procedures for lifting and removing slabs; and ii. Erected safety signage at the factory outlining the safety procedures for lifting and removing slabs. 83. The defendant's safety procedures for lifting and removing slabs state, amongst other things, that: i. " the forklift operator is licensed and …he is satisfied that the lift he/she is about to make is within the lifting capacity of the forklift; ii. When preparing a slab for lifting make sure that the helpers are standing well clear at either end of the slab; iii. Move only one slab at a time…". 84. The defendant requires two employees to assist the forklift operator in the movement and relocation of slabs in and about the premises; one at each end of the slab to be moved. 85. The defendant has purchased a new forklift attachment jib that meets the requirements of Australian Standards. 86. The defendant has updated the load plate of the forklift to include the safe working load limit of the forklift when fitted with the defendant's new jib attachment. 87. The defendant is operating the forklift within its rated load capacity as only one slab is being lifted at a time. 88. The defendant has ensured that the forklift driver, Jiang, operates the forklift under supervision and maintains a training logbook for users and operators of industrial equipment in accordance with the regulation.

[24]

The defendant has no prior criminal convictions. Co-operation with WorkCover 90. The defendant has co-operated with WorkCover throughout its investigation into the incident. 91. The defendant has complied with all improvement notices issued by WorkCover since the incident. 10 The statement of agreed facts for Mr Ji and Mr Gao were in similar terms to the statement of agreed facts for J & L Marble. 11 Mr T Saunders of counsel, who appeared for the defendants, read affidavits of the following: Ji Liang Gao, a director of the company; Jing Qiang Ji, a director of the company; Hong Yan Xiao, the corporate defendant's accountant; Jing Bao Gong, an accredited interpreter fluent in English and Mandarin - Chinese. 12 Mr Gao and Mr Ji were required for cross-examination and gave their evidence through an interpreter. 13 Mr Gao described the procedure for lifting stone slabs to be that employee(s) used a pinch bar to separate and open the slabs from the top of each slab. Wooden wedges were used to hold the slabs apart from the next slab until the forklift driver transported the slab. An assistant directed the forklift driver so the jib was positioned correctly. This was done by indicating the centre of the stack of slabs. Assistant(s) continued to hold the top of the slab while the forklift was positioned, and were instructed never to stop holding the slab during this process. The forklift driver moved the slab around the yard, while the assistants were holding the edge of the slab. When the slabs were released in the area directed by assistants, slabs were lowered to the ground, when the clamp automatically disengaged. The assistant(s) then pushed the top of the slabs so that they leant against the stack. 14 Mr Gao's evidence was that employees were instructed never to stand in between the slabs and the A-frame where the slab was to be stored. Employees were not instructed to move one slab at a time prior to the incident. Over time a practice developed due to the changes in type of stone used at the premises. The use of natural stone up till approximately late 2005 meant that the usual practice was to move one stone slab at a time. The use of lighter and stronger engineered stone (Quartz Stone) after that time meant that a practice developed of moving more that one slab of engineered stone at a time. Employees were required to wear safety equipment whilst carrying out this work. 15 In a further affidavit of 11 May 2009, Mr Gao said that the corporate defendant had a Safety Procedure document entitled "Safety Procedures for Lifting and Moving Marble/Granite/Engineered Stone Slabs", however he said he no longer had a copy of the policy in the form in which it was first introduced. 16 During cross-examination, Mr Gao acknowledged that there was no requirement in the system of work prior to the incident which required the driver of the forklift to satisfy himself before lowering the slab and disengaging the lift clamp that the ground worker(s) were standing clear of either their receiving stack or the opposing stack. The forklift driver would merely lower the slabs on receipt of the verbal advice from the ground worker. Since the incident, the corporate defendant now requires the driver to receive acknowledgement from the two ground workers that they are both standing clear before the slabs are lowered. The corporate defendant has also employed the services of an additional worker to take on the function of being the second ground assistant. It now only requires that one slab be lifted at a time. Mr Gao acknowledged that there was no reason why these steps could not have been put in place prior to the incident. He conceded that the corporate defendant did not emphasis that two employees should be involved in moving the slabs. 17 Mr Gao's evidence was that the corporate defendant's policy, at the time of the incident included information that before moving marble slabs, the forklift must be checked to ensure that the jib and lifting clamp were in the correct position and ready for use; the forklift driver must be satisfied it was safe to proceed with the lift; assistants were not to stand in the middle of slabs except when the lifting clamp was being attached; assistants were not to stand between stacks of slabs; and assistants were to communicate with the forklift operator to explain where the slabs were to be moved. This procedure was explained to employees during induction training and prior to the incident. 18 Mr Gao said that whenever he operated the forklift before the incident he had two assistants help with moving the stone slabs. However, prior to the incident he did not direct other employees to ensure they had two assistants to assist in moving the slabs. Except when he or Mr Ji used the forklift, usually only one employee assisted the forklift driver. 19 Mr Gao accepted that he had not seen the document entitled "Safety Procedures for Lifting and Moving Marble/Granite/Engineered Stone", which he referred to in his affidavit for about six or seven years. Mr Gao acknowledged that the company was still trading and that it had not retrenched any staff. Mr Gao also agreed that there was not any threat that a debt of $50,000 owed by Wincrest Homes Pty Ltd ("Wincrest") would be paid. 20 During re-examination, Mr Gao clarified his evidence in respect of the debt from Wincrest. He said that a business known as "Benny's Joinery" has a contract with the corporate defendant to carry out work for Wincrest. 21 Mr Ji has been a director of the corporate defendant since 1996. Mr Ji described his daily duties as providing quotations to suppliers, measuring bench tops, preparing accounts and chasing debts. He said he was involved in supervision of employees and discussed workplace safety with them and checked that they were wearing safety equipment. Mr Ji holds an OHS Construction Induction training Certificate as well as a Forklift Drivers Licence. He was previously employed at Top Marble as a stonemason. 22 Mr Ji's evidence in respect of the induction and supervision of employees, the company's safety policies, initiatives after the incident, including compliance with Workcover Notices was in similar terms to that given by Mr Gao. I therefore do not propose to repeat this evidence. 23 Mr Ji travelled in the ambulance with Mr Wang to hospital. Mr Ji expressed remorse in respect of Mr Wang's death. He said that in addition to the monies the corporate defendant provided to Mrs Wang he and Mr Gao provided her with an additional $300.00 in cash. Mr Ji also purchased dinner for the family several times after the incident. 24 During cross-examination, Mr Ji's evidence was that he had been told that Wincrest was, in all likelihood, in receivership. The effect of his evidence appeared to be that the corporate defendant could only expect to receive 37 per cent of the $50,000 as Benny's Joinery signed an agreement to that effect with Wincrest. The amount would be paid over a period of five years. He agreed that the amount owing by Wincrest had not been included in the figure $141,208 under the heading "Receivables". Mr Ji confirmed that the contract was between the corporate defendant and Benny's Joinery to supply marble tops. Benny's Joinery had a separate agreement with Wincrest. Mr Ji did not therefore believe that it was fair to ask Benny's Joinery to pay the balance of the outstanding $50,000 in circumstances where they would not be paid. He acknowledged that 37 per cent represented approximately $18,500 and that the corporate defendant could write off bad debts against tax. 25 Mr Ji said that another company, "Apex Building", had also gone into liquidation owing the corporate defendant approximately $50,000. He believed that the company had lodged a proof of debt or letter of demand in respect of the moneys owned by Apex Building, but he did not think that the company would receive any money because Apex Building was in debt to in excess of 20 companies. 26 Hong Yan Xiao (Brenda Xiao) is a Registered Tax Agent and Certified Practising Accountant of Brenda H Y Xiao & Co in Hurstville. She is the accountant for the corporate defendant. Ms Xiao's evidence included annexing to her affidavit the financial records of the company from 2006-2007. This material disclosed that: (i) for the year ending 30 June 2006, the corporate defendant's profit and loss statement showed a net loss of $12,097; (ii) for the year ending 30 June 2006, the corporate defendant's balance sheet showed total equity of $136,821; (iii) for the year ending 30 June 2006, the corporate defendant's tax return showed that deductions for decline in value of depreciating assets amounted to $60,963. This meant that the total adjustable value of the business at the end of the income year was $142,247; (iv) for the year ending 30 June 2007, the corporate defendant's profit and loss statement showed a net profit of $1,264; (v) for the year ending 30 June 2007, the corporate defendant's balance sheet showed a total equity of $138,085; (vi) for the year ending 30 June 2007, the corporate defendant's tax return showed that deductions for the decline in the value of depreciating assets amounted to $50,774. This meant that the total adjustable value at the end of the income year was $145,473. Total losses carried forward to later income years amounted to $10,833.

[27]

(i) for the period 1 July to 30 April 2009, the corporate defendant's trading account statement showed a gross profit from trading of $535,559; (ii) for the period 1 July to 30 April 2009, the corporate defendant's detailed statement of financial performance showed total expenses of the amount of $673,680, with loss from ordinary activities before income tax of $120,559; (iii) for the period ending 30 April 2009, the corporate defendant's statement of financial position showed a total equity (deficiency) of $22,138; (iv) for the period 1 July to 30 April 2009, the corporate defendant's notes to the financial statements gave the following more detailed financial information about the corporate defendant's financial position: (a) cash assets valued at $42,637; (b) current inventories: finished goods cost valued at $46,667; (c) short term deposits valued at $35,000; (d) plant and equipment valued at $52,927; (e) motor vehicles valued at $156,855; (f) current unsecured liabilities of $120,065; (g) non-current unsecured liabilities of $158,713; (h) contributed capital (fully paid shares) valued at $1,500. (v) for the period ending 30 April 2009, the corporate defendant's reconciliation report showed reconciliation cheques totalling $122,558.29, Reconciliation deposits totalling $130,854.45, outstanding cheques totalling $7,320.05 and Outstanding deposits totalling $3,630.00; (vi) for the month of April, the corporate defendant's cheque account statement from the Commonwealth Bank showed an opening balance of $38,030.66 and a closing balance of $46,326.82. Ms Xiao stated that in the financial year to April 2009, Mr Gao and Mr Ji were paid wages by the corporate defendant of $48,400.00 each. Relevant Principles 31 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the 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.

[40]

· each of the stone slabs weighed in excess of 200 kilograms; · the forklift attachment had a safe working load limit and in this regard, "300 kilograms" had been written in black texta on the load arm of the forklift attachment fitted to the forklift used to move the slabs; · the employees who conducted the task did so in pairs, with one worker operating the forklift and one manually handling the slabs; · the employees who performed the subject work adopted the practice of moving two to three slabs on each lift; · the slabs restricted the vision of the forklift operator and the forklift operator was dependent upon his assistant locating himself in a safe position and also providing accurate, verbal directions for the movement and location of the slabs; · there was a risk that the stone slabs could crack and then drop during the lifting and transfer process, thus creating a risk of injury to the worker on the ground guiding the slabs (and guiding the forklift driver) during the lifting process; and · the stone slabs, once lowered into place in front of a receiving stack, had to be pushed onto the receiving stack and the defendants recognised that there was a risk of entrapment between the slabs and the receiving stack. 35 Although Mr Gao was of the view that it was preferable for the task to be performed with two ground workers handling the slabs, no such direction was given prior to the incident. 36 Further, the forklift provided by the defendants was fitted with two compliance plates, with only one of the plates being genuine; the forklift jib attachment was not fitted with any form of identification plate, and the forklift jib attachment was not fitted with any information load, apart from the words "300 kilograms" written in black texta on the load arm. No other information was supplied. As a consequence, each time the forklift fitted with the jib attachment was used to lift more than one slab the maximum load of 300 kilograms marked on the jib attachment and the mast vertical capacity of the forklift were both exceeded. 37 In addition, contrary to Australian Standard ("AS") 2359.6 Clause 11.1.1.5, the forklift attachment was not secured to the tines of the forklift. Furthermore, the worker operating the forklift at the time of the subject incident was neither the holder of certificate of competency with respect to the operation of forklifts nor a certificate of training. 38 The system of work that was in place at the time of the incident permitted the ground worker, rather than a licensed forklift driver appropriately trained in the calculation of lift loads, to determine the number of slabs to be lifted and hence the weight of each lift. No limit was placed otherwise on the number of slabs that were to be lifted at any one time. 39 The system also included no requirement that the forklift operator needed to be able to see that the ground worker(s) involved in guiding the lift had moved to a position of safety before the forklift driver would lower a load to the position at which the lifting clamp automatically disengaged and released the load. 40 In his affidavit, Mr Gao stated that at some time prior to the subject incident the company had in place a written safe work procedure for the movement of stone slabs with the forklift. However, no copy of that document was produced and Mr Gao could not recall when he last saw a copy of the relevant work procedure believing it to be six or seven years prior to the incident. 41 Mr Saunders pointed to evidence that employees underwent induction training when they commenced employment with the corporate defendant and that it had a written occupational health and safety policy, together with written procedures in relation to the movement of slabs around the workplace. This was a reference to a document headed "General Company Policy" which had a number of photographs attached which contained no instruction. In my view, the policy could only be said to deal with occupational health and safety in a most general way. It was an agreed fact that at the time of the incident, no formal documented risk assessment had been conducted in relation to the movement of stone slabs at the premises, nor in respect of the operation of the forklift, the jib attachment and/or the lifting clamp. The evidence discloses that there was no formal documented occupational health and safety systems in place at the time of the incident. 42 The defendant contended that the reason it had failed to appreciate the risk was the unlikelihood that Mr Wang would act contrary to instructions given to him and position himself between the stacks of slabs, rather than stand by the side of the slabs as he had been instructed to do. It is well settled that the employer's obligation is to ensure the health and safety of its employees and contractors. This obligation extends to the hasty, careless, inadvertent, inattentive, or unreasonable employee: Dunlop Rubber Australia Limited v Buckley (1952) 87 CLR 313 at 320; McLean v Tedman and Another (1984) 155 CLR 306 at 311 - 312; WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248; WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700; (2000) IR 92 at 722. 43 The proactive nature of the duty was described in forceful terms by Hill J in WorkCover Authority (NSW) (Inspector Egan) v Atco Controls Pty Ltd (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 reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time at the workplace." 44 The particulars of the charge also alleged that the defendants failed to provide such information, instruction, training and supervision as was necessary to ensure the employee's health and safety at work. Mr Wang was not given sufficient training as to how the stone slabs should be moved about the factory. In addition, the corporate defendant failed to ensure that the forklift was operated by a suitably trained employee. 45 Following the incident, the defendants took a number of steps to control the risk associated with the use of the forklift and the risks associated with the movement of the stone slabs by the forklift in or about its factory. These steps included that the defendants rectified the compliance plate on the forklift; introduced a proper training and a supervision scheme with respect to the training of the forklift operator; purchased a new, compliant lifting jib attachment for the forklift; limited all lifts to one slab at a time and introduced a requirement that all lifts be performed by a crew consisting of a certified forklift operator, or operator in training and a two person ground crew. Such steps were simple and inexpensive to implement and demonstrate the ease with which the subject could have been addressed prior to the incident. 46 Whilst the consequences of an incident 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. 47 It is necessary to assess the degree of culpability for the breach of the Act that can properly be attributed to the acts or omission of the defendants in order to determine the gravity of the offence to which the defendants have pleaded guilty. The failure here was to have a proper and adequate system for moving stone slabs weighing approximately 200 kilos each around the factory. 48 It will be a serious offence when there is a foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and foreseeable. It was readily foreseeable that an employee may place himself between the stone slabs and the A frame stacks of stone slabs. 49 The seriousness of the risk, its foreseeability and the ease of removing that risk, renders this offence to be in the mid range of seriousness. There is also the particular aggravating factor of the death of Mr Wang: Section 21(2)(g) of the Crimes (Sentencing Procedure) Act 1999. In my view and I find that the subject offence is objectively very serious. First, because the risk was known, and in any event, readily identifiable: Inspector Chadwick v Denbur Constructions Pty Limited [2004] NSWIRComm 195 at [17]. Secondly, having regard to the weight of each slab involved in a lift, the risk involved a real prospect of a serious, if not, fatal injury. Thirdly, the risk was capable of being controlled, if not eliminated, through the adoption of simple steps. 50 In addition to the factors relating to the offence, the Court is required, in fixing penalty, to consider the need to deter others from committing the same crime and to deter the defendant from re-offending. In Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; (2000) 99 IR 29 at [71] - [80], the Full Bench recognised that in the industrial context, it would be rare that a sentencing court need not impose a sentence that includes an element of general deterrence. I consider it is appropriate to draw attention once again to the need for employers operating forklifts and moving significantly heavy stone slabs, or other material, to ensure that the forklift operators are properly licensed and that forklift are operated properly. Employers must also ensure that ground workers are not exposed to risks to their health and safety. It is therefore appropriate that I give significant weight to the need for general deterrence in determining penalty.

[41]

51 In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve safety following an incident are relevant, as is the propensity for the defendant to re offend. I accept that this is not a case which calls for the imposition of some additional specific punishment, aimed at deterring the defendants from further offending against the Act and for the purposes of compelling the defendants' attention to occupational health and safety, so that persons are not exposed to risks to their health and safety. The corporate defendant has been in operation since 1996, without any contravention of the legislation. It operates in a dangerous industry and has taken appropriate measures to avoid a recurrence of the offence. The evidence of Mr Ji and Mr Gao now demonstrate that the defendants have a strong commitment to health and safety in the workplace and their policies and practises reflect this fact. However, the corporate defendant remains an employer in the building industry in circumstances where the manual handling of heavy stone slabs will continue. In addition, the evidence discloses a direct personal involvement of each of the directors in the day to day affairs of the company, including the development and enforcement of the safe working procedures, both prior to the subject incident and on an ongoing basis. I include an element in the penalty for specific deterrence. 52 There are a number of relevant subjective considerations. Firstly, pleas of guilty was entered at the earliest opportunity. I allow a discount of 25 per cent for the pleas of guilty in accordance with the principles outlined in R v Thomson; R v Houlton (2000) 49 NSWLR 383. Mr Saunders submitted that the matters referred to in s 21A(3) of the Crimes (Sentencing Procedure) Act 1999, in particular s 21A(3)(b) that the offence was not part of a planned or organised criminal activity; s 21A(3)(e) that the offenders do not have any record (or any significant record) of previous convictions; s 21A(3)(f) that the offenders are of good character; s 21A(3)(g) that the offenders are unlikely to re-offend; s 21A(3)(i) the remorse shown by the offenders for the offences: s 21A(3)(k) a plea of guilty by the offenders; s 21A(3)(l) the degree of pre-trial disclosure by the defence, and s 21A(3)(m) assistance by the offender to law enforcement authorities, favour a significant discount in the penalty the Court may impose. I take these factors into account noting that s 21A(3)(h) would not appear relevant. 53 I also take into account the size and nature of the defendants' business and the inherent risks involved in the work performed by the defendants' employees. The corporate defendant has been trading in a business which involves the movement, cutting and installation of heavy marble slabs for over 12 years without any prior conviction. 54 The defendants can now demonstrate a strong commitment to occupational health and safety and are entitled to be regarded as having a good industrial safety record. 55 The corporate defendant relies on s 6 of the Fines Act 1996, submitting that there are circumstances where it is appropriate that the quantum of penalty imposed be reduced in light of its limited means, or impecuniosity. Mr Saunders submitted that a fine in excess of $50,000 would result in the corporate defendant going into liquidation. 56 The evidence of Hong Yan Xiao, the corporate defendant's practising accountant and tax agent, disclosed the profit and loss statement for the year ending 30 June 2006, was a loss of $12,097. The balance sheet showed a total equity for this period of $136,821. The profit and loss statement for the year ended 30 June 2007 showed a net profit of $1,264, the total equity being $138,085. The trading account for the year ended 30 June 2008 showed a gross profit from trading of $712,030. The profit and loss accounts for 30 June 2008, showed a loss of $41,161. The financial position as at 30 June 2008, showed total equity of $98,421. For the period 1 July 2008 to 30 April 2009 the trading account showed a gross profit of $535,559. For the same period the detailed statement of financial performance showed a loss of $120,559. The total equity for the corporate defendant as at 30 April 2009, is shown as ($22,138). Also annexed to Ms Xiao's affidavit were the corporate defendant's tax returns for the year ended 30 June 2007 and 30 June 2008, together with the corporate defendant's declarations in respect of the 2007 - 2008 accounts. In the financial year ending 2008, Mr Gao and Mr Ji were paid wages by the corporate defendant in the sum of $53,987 each and in the 2009 financial year up to April 2009, $48,400. It is clear that the corporate defendant is not in a strong financial position. 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) 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, Wrigh t 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. ...'

[42]

[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. 59 Having regard to the aforementioned authorities regarding the relevance of the financial means of the corporate defendant, I shall significantly reduce the amount of the fine, which would have otherwise have been ordered to be paid by the corporate defendant, due to its limited means. The penalty imposed will reflect the matters discussed by Walton J in Schrader. I should indicate that I do not consider that the penalty imposed is beyond the means of the corporate defendant. The personal defendants did not seek to rely upon the provisions of the Fines Act. 60 The maximum penalty for the corporate defendant is $550,000 and for the personal defendants $55,000. Having regard to all the relevant circumstances set out in these reasons, I consider the proper penalty, appropriately reduced to take into account the corporate defendant's means, is $90,000. In reaching this penalty, I am also mindful that the corporate defendant will be required to contribute to the prosecutor's costs of the proceedings. In respect of the personal defendants, I consider the proper penalty for each is $18,000. ORDERS 61 The Court makes the following orders: In matter No IRC 1818 of 2008: 1. The offence is proven and a verdict of guilty is entered. 2. The corporate defendant is convicted of the offence as charged. 3. The corporate defendant is fined an amount of $90,000 with a moiety to the prosecutor. 4. The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. In matter No IRC 1819 of 2008: 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 $18,000 with a moiety 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, leave is granted to either party to approach the Court for final orders as to costs. In matter No IRC 1820 of 2008: 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 $18,000 with a moiety 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, leave is granted to either party to approach the Court for final orders as to costs with a moiety to the prosecutor.

At a glance

Court

Decision date

Before

Source

Judgment (43 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (31)

Cited By (24)