Inspector Bishwa v Refined Sugar Services Pty Ltd & Anor [2006] NSWIRComm 366 | Case summary

Inspector Bishwa v Refined Sugar Services Pty Ltd & Anor [2006] NSWIRComm 366 | Case summary | Zoe

The defendant,defendant had inadequate systems of maintenance in place to prevent an occurrence such as the incident. The defendant, failed to carry out adequate preventative maintenance on the elevator EL02, despite problems with the alignment of the belt in the bucket elevator prior to the incident. Maintenance logbook entries show that there were a number of instances of belt drift and drift sensor faults in the twelve months prior to the incident. The SAFE experts' report suggests that chronic belt drift in bucket elevator EL02 was caused by wear to the lagging on and consequent flattening of the crown on the head drum. The experts concluded that the absence of a crown on the head drum was "a primal cause which allowed the belt to run off track". 21. A fax dated 8 December 2003 from Brad Huckle of H & B Plant Engineering to Andrew Herlihen, the NSW Operations Manager for the Defendant, refers to work carried out on one of the Bucket Elevators on 5 December 2003 due to the failure of the conveyor belt to track correctly. Huckle noted that the belt was tracking "hard to one side and over the edge of the roller at the top. After a number of adjustments the belt still continued to track off. On 8 December 2003 Huckle advised that he had referred the belt to Endless Belts for an opinion in regard to the belt conditions and to ascertain whether replacement was the only option. The belt was not replaced. 22. Joe Matijasko ("Matijasko") was the maintenance supervisor employed by Refined Sugar Services Pty Limited to be responsible for the maintenance and repair of plant and equipment operated by the Defendant at the Premises. Matijasko is a fitter by trade. When interviewed he stated that he had not received any training about the servicing and maintenance of that plant and equipment installed and operated at the site however he was required to inspect the buckets and the belt of the elevators almost every day to ensure that the belt stayed in the same position and did not drift. He admitted that the belt in elevator EL02 had drifted some 30mm to one side and that, despite the drift, the elevator was still in operation because in his opinion it was stable.

Prior Convictions 32. The defendant has no prior convictions under the Occupational Health & Safety Act 2000 . Moiety 33. The prosecution seeks a moiety of any fine imposed upon the defendant. 10 Mr RM Goot SC, who appeared for the defendants, tendered an affidavit of Mr Peter Athanitis who is employed by the first defendant as the Operations Manager, NSW and Depots for Sugar Australia Pty Ltd. He has held the position since 13 October 2004. He was not required for cross-examination. Also present in Court were Mr Ian McMaster, the Director of the first respondent and former CEO of CSR Sugar and Mr Roger Williams, legal counsel for CSR. Mr Tim Hart, who is the current CEO for both defendants, was delayed arriving from overseas. 11 Mr Athanitis was authorised to swear his affidavit on behalf of both defendants. He deposed that the second defendant has been operating since 27 February 1998. At the time of the incident, the shareholders were CSR - 50 per cent, Mackay Sugar Co-Operative Association Limited - 25 per cent and E D & F Man Australia Pty Limited - 25 per cent. The last named company has been renamed CSR Refining Investments Pty Ltd. 12 Prior to and at the time of the incident, the second defendant managed safety by using the Safety, Health and Environment ("SHE") policy and the Safety, Health and Environment Management System ("SHEMS"). The SHE consists of 13 elements in five sections being 151 pages and incorporates a continuous improvement cycle. Section 5.3 deals with fixed plant. It provides, in summary, that all fixed plant shall be itemised (on a register) inspected and maintained in good condition, with particular attention to safety mechanisms such as guards, emergency stops and isolation systems. Maintenance schedules are required, together with a record of relevant inspections, maintenance, repair and alteration. Risk assessments are to be undertaken for fixed plant. 13 Mr Athanitis annexed a most impressive and comprehensive range of materials to his affidavit that demonstrated the culture of occupational safety, maintenance and training systems in place before the incident. These included the following:

(i) Site Induction document; (ii) Emergency Evacuation Procedures; (iii) Plant isolation, Lock out, Tag Out procedures and documentation; (iv) Vehicle and Mobile Plant Procedures; (v) Confined Spaces Permit; (vi) 24 hour Notification Form; (vii) Hazard and Risk Assessment Procedures; (viii) An email dated 15 April 2005 from Balz Nater of the Buhler Group sought answers to the causes of the off tracking or misalignment of the belt in the bucket elevators together with details of the cleaning arrangements at the premises that were in place on and before the incident on 25 April 2004. These documents demonstrated that extensive cleaning occurred at the premises every three to four days. 15 Mr Athanitis deposed that the principal safety systems implemented at the premises prior to the incident included a heat sensor at the head of the elevator; fire detection suppression and fighting systems and equipment and explosion relief systems (flameless explosion vents) so that if and when an explosion occurred inside the elevator, it would be safely dissipated by the explosion vents and a maintenance system so that plant and equipment was maintained. 16 At the time of the incident, the flameless explosion vents were the most advanced form of device used to defuse explosions. There were also cleaning systems to minimise sugar dust in and around the plant. The premises underwent regular routine cleaning of sugar dust prior to the incident. 17 It was conceded by Mr Goot that the detection systems for belt operations which were used to ensure that the belt was tracking and operating correctly, was not operational at the time of the incident. Mr Athanitis stated that at the time of the incident, the workhouse was clean of sugar dust so that there was no secondary explosion at the time of the explosion in the encased bucket elevator EL02. 18 When the casing was removed from the elevator head, the elevator head showed clear signs of the belt and buckets rubbing on the head casing via heat marks and burnt paint. 19 Mr Joe Matijasko was the maintenance supervisor at the time of the incident and had identified a problem with the belt tracking for the elevator, however he did not identify the wearing of the crown on the elevator head. 20 The Report prepared by ISMA concluded that the explosion of sugar dust in the enclosed elevator, most probably resulted from sugar dust in the elevator being ignited by mechanical friction in the head of the elevator caused by a misaligned conveyor belt due to the wearing of the crown on the head pulley. 21 At the time of the incident, there were no employees in the workhouse. However, Messrs Carrucio and Ryan were located outside the workhouse near the fire doors. 22 Mr Athanitis stated that, in spite of the explosion in the elevator, the damage to the workhouse structure was not extensive and consisted of windows blown out, damage to the fire door adjacent to the elevator and the insulated panel wall sections were forced out of place by the pressure of the explosion. There were no secondary explosions. 23 After the explosion, remedial action was taken. Mr Athanitis annexed the following materials to his affidavit in this regard:

(i) Hazardous Areas Inspector Timetable 2006-2009; (ii) Worley and ISMA Risk Register Matrix; (iii) Hazardous areas site zoning drawings. 36 Mr Athanitis deposed that the second defendant and employees of the first defendant participated in a conference in November 2005 in which the incident was critically examined and the lessons learned were discussed in order to educate others how to eliminate risks of these types of events in the future. The conference included a slide presentation and a brochure for the Dust Explosion Seminar. Documentation dealing with the objectives for the business of the second defendant in the future were also annexed. 37 Mr Athanitis stated that both defendants deeply regret the incident that occurred and that the second defendant has learnt from the incident and sought to make improvements at the earliest practicable opportunity to all its sites and interests. He stated productivity at the premises has increased from 18 per cent to 60 per cent due to the improvements in safety and equipment effectiveness. The response to safety is proactive and the safety committee is consulted before changes occur to the systems of work, plant and work environment. 38 Mr Athanitis deposed that both defendants have a desire to operate with a total commitment to compliance with all occupational health and safety obligations and both companies co-operated fully the WorkCover Authority of New South Wales in respect of the incident and the investigation process. 39 The first defendant is always striving to reduce the potential for injury to its employees through training and a co-ordinated approach with the management of CSR and the second defendant. This has led to improved policies, procedures and practices so as to provide a safe environment for its employees. Mr Athanitis stated each defendant is doing its utmost to ensure that measures are adopted to ensure that such an incident does not happen in the future. Submissions 40 Helpfully, both counsel provided the Court with written submissions. Both parties were in agreement in respect of the principles of the law that are required to be applied in a sentencing hearing. 41 Mr O'Donnell's submissions may be summarised this way: (i) the objective seriousness of each offence is significant; (ii) explosions of this type have the potential to cause serious injury; (iii) the belt drift inside the elevator was identified in December 2003; (iv) the belt was not replaced; (v) Mr Matijasko, the maintenance supervisor, had not received any training about the servicing and maintaining of the plant and equipment installed and operated at the site. Mr Matijasko, when interviewed by the Inspector stated drift sensors were installed in the elevators to ensure that the belt had not drifted. However, the drift sensors were not inspected and the elevator maintenance program did not include inspections of the safety mechanisms, or features fitted to the elevators; (vi) the incident was foreseeable; (vii) clause 62 of the Occupational Health and Safety Regulation 2001 provides for particular risk control measures to prevent the occurrence of fires and explosions; (viii) it was acknowledged that a great deal of remediation had occurred since the incident and a substantial amount of money had been spent and systems put in place to ensure safety; (ix) general and specific deterrence are both relevant; (x) simple and remedial steps were available; (xi) the defendants are of equal culpability. 42 Mr Goot emphasised the following matters in his submissions:

(i) the defendants acknowledged that this was a serious matter but contended that the absence of injury was due to good planning and good safety systems and a safe and effective evacuation procedure, as explained in the evidence of Mr Athanitis; (ii) the system of plant, maintenance, and training in place prior to the incident resulted in the cause of the incident being not readily foreseeable; (iii) in light of the evidence of Mr Athanitis, the risk of re-offending is very low, or non-existent; (iv) the Court should therefore heavily discount or disregard the element of specific deterrence; (v) the nature of the offence is at the low end of the middle range of seriousness; (vi) in respect of subjective matters, emphasis was placed on the culture of occupational safety, maintenance and training systems in place before the incident with particular reference to the standards and systems that were in place and referred to in the evidence of Mr Athanitis; (vii) the steps taken by the defendants after the incident, as detailed in the affidavit evidence of Mr Athanitis; (viii) neither defendant has any antecedents; (ix) the defendants co-operated with the WorkCover Authority of New South Wales; (x) finally, the defendants submitted that in approaching sentencing, it is appropriate to recognise that although the defendants are separate but related corporate entities and although the concept of "totality" may not apply, it is to be remembered that the business of the first defendant was solely to supply labour to the second defendant and no other entity. Those subjective circumstances ought to be considered in determining penalty. Relevant Principles 43 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.

[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 of New South Wales (Inspector Ch'ng) (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) 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 (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 (Inspector Hannah) 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 Page 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, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 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 44 On 24 April 2004 there was a collective failure on the part of each defendant to implement a safe system of inspection, maintenance and servicing of the plant and equipment at the site, including the elevator EL02, to ensure that the plant and equipment was safe and without risks to health when properly used. Each defendant was also aware of the significant risk of an explosion of sugar dust occurring in the elevators. 45 On 8 December 2003, Mr B Huckle of H & B Plant Engineering referred to work having been carried out on one of the bucket elevators on 5 December 2003 which was due to the failure of the conveyor belt to track correctly. Mr Huckle observed that the belt was tracking hard to one side and over the edge of the roller at the top. After a number of adjustments, the belt still continued to track off. On 8 December 2003, Mr Huckle advised that he had referred the belt to Endless Belts for an opinion in regard to the belt conditions and to ascertain whether replacement was the only option. The belt was not replaced. 46 It was an agreed fact that the second defendant, failed to carry out adequate preventative maintenance on the elevator EL02, despite problems with the alignment of the belt in the bucket elevator prior to the incident. Mr Goot acknowledged that the drift sensor which was designed to indicate that the belt was drifting and that maintenance may be required, was not working or not working as it should have been. 47 The International Safety & Risk Management Group ("ISMA"), in their report, stated that the cause of the explosion was as follows: Inside the head it appeared that belt and buckets have been running against the casing. There are in fact on this side two parallel tracings: one of the belt touching the casing and one of the buckets scratching it on a different but very close location. The belt also showed a carbonized edge at the point where it stopped after the incident, a proof that at that spot the hot casing could cause carbonisation of the belt. There are clear traces of metal being scratched away at the point where the buckets had been touching the casing. The head also showed marks on the outside at the same locations, indication heat inside, caused by the belt rubbing the carbon steel casing and the stainless steel buckets edge scratching the casing. All buckets clearly showed the marks where they have been scratching the casing: carbonised sugar and even material of the casing was still attached on some of the buckets: this material was magnetic (proof that is carbon steel) and looked blue black (possible proof that is has been very hot: at least 500C). The fact that the scratching points of most buckets after the incident still were black by carbonized sugar or metal parts, indicates the fact that just before the incident those points still were very hot: if they would be of an earlier event they would have been covered and thus obscured by sugar dust. The direction of the flame in the downgoing leg also is directed down. In the upgoing buckets the direction is more difficult to distinguish. 48 A second expert's report by Safety Engineering Pty Ltd came to the same conclusion in respect of the cause of the explosion. 49 The risk, therefore, was the potential ignition of combustible sugar dust caused by friction of the conveyor belt not tracking correctly. The potential for conveyor belts to not track correctly was known to the defendants from December 2003. 50 Clause 62(1) of the Occupational Health & Safety Regulation 2001 provides: 62 Fire and explosion - particular risk control measures (1) An employer must ensure that risks associated with fire or explosion at a place of work are controlled by: (a) eliminating activities that have the potential to generate flammable or explosive atmospheres from the work process or, if elimination is not possible, minimising the potential for flammable or explosive atmospheres by providing adequate ventilation, and (b) eliminating potential ignition sources, including naked flame, hot work and electrical equipment, and sources of static electricity, including friction, welding and slipping belts, from proximity to flammable substances, combustible dusts or waste materials, and (c) enclosing work areas containing flammable or explosive atmospheres, and (d) removing waste materials and accumulated dust on a regular basis, and (e) providing for adequate storage, transportation and disposal of flammable substances, and (f) any other measures necessary to control the risks. 51 Where the defendants were aware that a conveyor belt was not tracking correctly, thus giving rise to the potential of friction in an area where sugar dust was known to exist, or could be expected to exist, leads me to the view that the risk was reasonably foreseeable. This is, of course, a factor to be taken into account when assessing the level of culpability of the defendants. 52 A further particular of the charge in respect of the first defendant was that it failed to provide adequate training in the inspection and maintenance of plant necessary to ensure the safety of its employees at the site. 53 As to the failure to provide adequate training, it was acknowledged by Mr Matijasko, the maintenance supervisor, that he had not received any training about the servicing and maintenance of the elevator EL02, although he was required to inspect the buckets and the belt of the elevators almost every day to ensure the belt stayed in the same position and did not drift. He admitted that the belt in the elevator EL02 had drifted some 30 millimetres to one side and that, despite the drift, the elevator was still in operation because, in his opinion, it was stable. 54 The lack of training is one of the defendants' principal failures and if Mr Matijasko received proper training, he may have formed the opinion that the belt in elevator EL02, having drifted some 30 millimetres, was therefore unstable. 55 In my view, this is a serious matter. The risks associated with an explosion at a place of work are well known. It was an agreed fact that Mr Caruccio heard a loud bang and observed fire coming through the fire door and travel past him. Clearly, there was a risk of serious injury from this incident and it was fortunate that both Mr Caruccio and Mr Ryan, who was standing near the fire safety doors when the explosion occurred, were not injured. 56 I accept that a reason that the employees were not injured was because of the safety systems in place which required the separation of the workhouse containing elevators EL01 and EL02, from the workers feeding sugar into the elevators. Fire doors which were required to be kept shut were placed between the workhouse and where the workers loaded sugar into the elevators. The safety systems included the proper operation of explosion safety vents; maintaining the air surrounding EL02 and keeping the air free of sugar dust thereby ensuring there were no secondary explosions. 57 I am prepared to accept that there was a co-ordinated and coherent approach to safety by the defendants. The breakdown in the paper system, as acknowledged by Mr Goot was caused firstly by the lack of specific training in relation to belt drift and maintenance and secondly by the failure to detect that the sensors were not operating, or not operating appropriately. 58 Senior counsel submitted that as soon as the explosion occurred, the whole system closed down activating other fail safe mechanisms which then operated. 59 In my view, the measures that were available to overcome the risks were simple and straightforward. Clause 62(1)(b) of the Occupational Health and Safety Regulation 2001 emphasises the need to control risks associated with a fire or explosion at a place of work by eliminating potential ignition sources, including slipping belts, from proximity to combustible dusts. There were simple steps available to the defendants to ensure that the belt in EL02 tracked correctly by ensuring that the head drum had a proper crown to prevent belt drift and thus avoiding the consequent source of ignition caused inside EL02 by that belt drift. 60 There was no death or serious injury arising from the defendants' failure, but it is clear that the consequences could have been much more serious than was the case. 61 There was no issue that the penalty should reflect an amount for general deterrence. It is not necessary to do more than repeat the remarks of Hungerford J in Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 (endorsed by the Full Bench in Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [71] - [80]): … the fundamental duty of the Court in this important area of public concern ... [is] to ensure a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace. 62 In respect of specific deterrence, Mr Goot submitted that the Court should heavily discount or disregard the element of specific deterrence. I do not propose to disregard an element in the penalty in respect of specific deterrence. The second defendant continues to conduct the manufacture, storage and distribution of refined sugar and associated products at the site. The first defendant continues to provide its employees to the second defendant to enable the second defendant to conduct the manufacture, storage and distribution of refined sugar. Any industry in which there is the potential for an explosion presents risks to workplace safety. I propose to include an element in the penalty for specific deterrence in respect of both the defendants, although it will only be small given that I consider the incident surprised both defendants and that they are unlikely to re-offend in light of the remedial action taken. 63 There are a number of relevant subjective considerations. The evidence of Mr Athanitis leads me to the conclusion that there was a culture of occupational safety, maintenance and training systems in place before the incident. However, as I have referred to earlier, it was deficient in respect of specific training in relation to belt drift and the failure to detect that the sensors were not operating, or not operating properly. Although the extensive and elaborate paper systems in existence were found to be wanting with respect to their implementation in certain areas, I accept the systems included detailed work and review procedures; elaborate site induction; occupational health and safety training courses and focus workshops; emergency evacuation procedures; regular site safety meetings; comprehensive record maintaining systems and strict maintenance and cleaning measures; regular reports including atmospheric monitoring, hazard analysis and international risk management. 64 Overall, this is an impressive and largely effective system of safety. If an error or flaw occurred in the system, there was other failsafe mechanisms that came into operation. These systems of safety mitigate what otherwise would have been a very serious offence. The existence and implementation of these systems shows that the defendants had a high regard for safety at the site. In this regard, the Full Bench in Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117 observed at [83]: [83] We accept on the evidence presented in these proceedings, however, the corporate respondent was generally a responsible employer with a high regard for the safety of its employees. Its occupational health and safety systems and procedures were designed to cope with what is an exceptionally dangerous industry. The existence of a system of work that evidences a defendant's concern with, and regard for, safety may mitigate the seriousness of an offence: see, for example, Department of Mineral Resources (NSW) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 25; WorkCover Authority (NSW) v Broken Hill Pty Co Ltd (1998) 83 IR 427 at 429; and WorkCover Authority (NSW) v Fernz Construction Materials Ltd (No 2) (2000) 100 IR 23 at 34. 65 It is clear that the defendants moved swiftly to commission a report from experts into the cause of the incident. This was provided by ISMA and its recommendations implemented. In addition, the defendants commissioned an audit of the safety regime at the site by Risk Management and Safety Systems Pty Ltd. The defendants also commissioned external monitoring and risk assessment reports in relation to atmospheric monitoring; hazard analysis; dust explosion risk; dust suppression and packing and in respect of the bulk loading areas. All recommendations were immediately implemented. The SHE and the SHEMS systems referred to in the evidence of Mr Athanitis were upgraded, together with the second defendant's safety and environmental policy. A new health and safety committee's constitution, dated 15 February 2005, was introduced. Induction training and updating emergency procedures also occurred. 66 In addition, the second defendant has expended $2.8 million on remedial works on the elevator EL02, and associated equipment, which has been critically reviewed and substantially rebuilt. A new approach to preventative maintenance and dust management has been adopted since the incident. Hazardous area plans and explosion protected electrical equipment registers have been completed for all of the second defendant's sites. The defendants also conducted a conference in November 2005 to critically examine the incident and the lessons learned in order to educate others how to eliminate risks of these types of events in the future. 67 Neither defendant has any prior convictions and co-operated fully with WorkCover. I regard both defendants as being entitled to a finding of good industrial citizenship. 68 The prosecution acknowledged that each defendant entered a plea of guilty at an early stage and was entitled to a specific discount to reflect the utilitarian value of the plea. 69 Although each defendant pleaded guilty to an amended application for order, the pleas were entered at the first opportunity before the Court after the charges were framed in their present form. 70 In its guideline judgment in R v Thomson; R v Houlton (2000) 49 NSWLR 383 the Court of Criminal Appeal held at [160]: …

(iii) The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge. 71 Spigelman CJ, with whom other members of the court agreed, said at [155]: The top of the range would be expected to be restricted to pleas at the earliest possible opportunity and should not be given, save in an exceptional case, after a matter has been set down for trial. A discount towards the bottom of the range is appropriate for late pleas, for example, on the date fixed for trial, unless there are particular benefits arising from the prospective length and complexity of the trial. 72 In R v Gorman (2002) 137 A Crim R 326 Sperling J, with whom Beazley JA and Carruthers AJ agreed, stated at [64], after referring to the abovementioned passage from the Chief Justice in R v Thomson; R v Houlton: In my view, where an offender pleads guilty immediately upon charges being reduced by the Crown, that is "an exceptional case" justifying a discount at or close to the top of the range, notwithstanding that the proceedings have long since been set down for trial. … 73 I propose to allow a discount of 25 per cent for the early plea of guilty to the amended charges in accordance with the principles outlined in R v Thomson and R v Gorman. 74 These matters involve the prosecution of the agent conducting the business of a joint venture at the site (the first defendant), as well as the company which supplied the employees to the agent to enable it to conduct that business (the second defendant). Both defendants had specific obligations under the Act. I see no reason why I should not treat the defendants as being equally culpable. 75 Mr Goot submitted that in determining sentence, it was appropriate to recognise that although the defendants are separate but related corporate entities and the concept of totality may not apply, the business of the first defendant was solely to supply labour to the second defendant and for no other entity. I accept that the sole reason for the existence of the first defendant was and is to supply labour to the second defendant. The first defendant was established against the background of employees of CSR being subject to beneficial award conditions and other conditions of employment, including bonus schemes and the like. When it came to establishing the joint venture, whilst CSR is a party, it is not the controlling entity. An issue arose as to how to apply or maintain for the employees of the joint venture, including former CSR employees and new employees, those beneficial entitlements. The first defendant came into existence simply to maintain entitlements for the benefit of the employees of the joint venture. 76 In my view, the issue of totality does not arise. The principle of totality was recently considered by the Full Bench in Inspector Green v Big River Timbers Pty Limited; Inspector Green v Big River Timbers (Veneer) Pty Limited [2006] NSWIRComm 279. Their Honours said at [7] - [14]: [7] The respondents conceded that the principle of totality does not operate in relation to the corporate defendants merely because they have common directors and shareholders. No challenge was made, in this respect, to the decision of this Court in WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 at 454 to 460 and Inspector Sharpin v A Team Concrete (Aust) Pty Ltd & Ors [2004] NSWIRComm 182. However, the respondents argued that those cases are distinguishable on their facts; it was submitted that the respondents were "interlocked" in such a way as to warrant the approach taken by Marks J in Inspector Green (WorkCover) v Metropolitan Administrative Services Pty Ltd [2005] NSWIRComm 12. Although ultimately the respondents abandoned the contention that the principle of totality could apply strictly in this case, we propose to review the more recent consideration of this principle by the Court.

[8] The totality principle was recently considered in the Full Bench decision in Morrison v Powercoal Pty Ltd & Anor (No 3) (2005) 147 IR 117. At [126] the Court held: [126] … The totality principle was recently considered by Full Benches of this Commission in Abigroup Contractors Pty Limited v WorkCover Authority of New South Wales (Inspector Maltby) [2004] NSWIRComm 270 and WorkCover Authority of New South Wales (Inspector Mansell) v Robert Josef [2004] NSWIRComm 323. There is no utility in us undertaking any reconsideration of the principle because we consider the exhaustive analyses in the aforementioned cases are correct, except to identify what the principle stands for and that was stated succinctly in Crown in Right of the State of NSW (Dept of Education and Training) v Keenan (2001) 105 IR 181 at [36] - [38] and quoted with approval in Abigroup at [76]: [I]n determining penalties for multiple offences under the Occupational Health and Safety Act the Court is required to determine separately an appropriate penalty for each offence. Having done so, the Court should then consider what the appropriate penalty should be by applying the principle of totality. Where the multiple offences contain common elements, the principle of totality must, for that reason alone, be applied to ensure that the defendant is not punished more than once for the common elements of the offences and to avoid the double jeopardy that would follow if that occurred. The principle must also be applied for the reasons stated in Pearce [ v The Queen (1998) 194 CLR 610] and Mill [ v The Queen (1988) 166 CLR 59]. [37] We should emphasise that the principle that a defendant is not to be punished more than once for the common elements of the offences does not require that a single penalty only should be imposed for the multiple offences. The Court is required to determine a separate penalty for each offence before applying the principle of totality. It will then usually be appropriate to fix separate penalties for each offence. It is in applying the principle of totality - which requires the consideration of the overall criminality involved in the offences - that regard should be had to the principle that a defendant is not to be punished more than once for elements which are common to the offences as well as ensuring the aggregate sentence or penalty is just and appropriate.

[11] The defendant in that case made submissions similar to those made in the present appeal, namely, that the offenders ought to be treated as one entity: see [242]. After reviewing the authorities relevant to the principle of totality ([243] - [248]), including Camilleri's Stock Feeds Pty Limited v Environmental Protection Authority (1993) 32 NSWLR 683, Pearce v The Queen (1998) 194 CLR 610, Postiglione v The Queen (1997) 189 CLR 295, Walton J, Vice-President, held: [249] The principle formulated in these cases does not, on its face, assist the defendants' contention. The principle of totality enunciated in these decisions operates in circumstances where a single defendant was convicted of a number of offences. The principle requires a judge who is sentencing an offender for a number of offences to ensure that the aggregation of the sentences imposed for each offence is a just and appropriate measure of the total criminality involved. However, the present matter does not concern a single offender facing multiple charges, but two defendants facing different charges. There is a common substratum of facts, but the defendants, as was conceded by Mr Harmer , have different "contributions". [12] After distinguishing cases in which a single penalty was imposed for related corporate defendants, his Honour held at [264]: [264] The principle of totality operates to ensure that the total criminality of a defendant in relation to an incident is properly and justly assessed. It is difficult to envisage how the principle, so expressed, can be used to measure the criminality of more than one defendant no matter how closely related. The principle of totality can be distinguished from the principle of parity which is directly relevant to the assessment of the appropriate penalty for co-offenders. Upon the basis of the authorities I have earlier referred to, the principle of totality would not require the sentencing of the defendants to be undertaken upon the basis that they were effectively treated as a single entity facing two charges. [13] We consider this correctly states the manner in which totality does or does not apply to separate defendants. The role, or lack thereof, of totality in relation to separate defendants was also outlined by the Full Bench in Inspector Bestre v T & Y Pty Ltd [2005] NSWIRComm 392 at [14]: [14] The principle of totality is relevant when a court is sentencing a defendant for more than one offence which contain common elements. In relation to totality, his Honour made the following observation which clearly demonstrates an error of law: In relation to both s 8(2) offences, I find that in each case the nature and quality of the offence indicates that penalties in the medium range are warranted subject to appropriate consideration for the subjective mitigating factors and after taking into account relevant sentencing principles including the principle of parity and the principle of totality.

[112] The decision in Warman would require that the defendants, even though prosecuted under different sections of the Act, be treated consistently in accordance with the principles in Lowe v The Queen (1984) 154 CLR 606. At 610 Mason J referred to the principle as follows: "Just as consistency in punishment - a reflection of the notion of equal justice - is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under the law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice. It is for this reason that the avoidance and elimination of unjustifiable discrepancy in sentencing is a matter of abiding importance to the administration of justice and to the community." 78 It is therefore appropriate, in my view, that I apply the principle of consistency in punishment, or equal justice in the assessment of penalty in these matters. 79 In respect of each of the offences, the statutory maximum penalty is $550,000. 80 I regard the procedures taken by the defendants to improve the occupational health and safety systems as appropriate. I accept that the defendants have demonstrated a strong commitment to workplace safety and that is a factor to be taken into account in their favour. 81 The defendants also accepted responsibility for the incident and expressed contrition for the events that occurred on 24 April 2004. This is a further factor to be taken into account in their favour. 82 Taking into account all of the relevant circumstances, I consider that the appropriate penalty should be: 1. In matter No IRC 588 of 2006 - $50,000. 2. In matter No IRC 589 of 2006 - $50,000. ORDERS 83 The Court makes the following orders: In matter No IRC 588 of 2006: 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 $50,000 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, as assessed, in accordance with the Court's Rules. In matter No IRC 589 of 2006: 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 $50,000 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, as assessed, in accordance with the Court's Rules.

Inspector Bishwa v Refined Sugar Services Pty Ltd & Anor

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Cases Cited (32)