Inspector Brian Dell v Baradine Sawmilling Co. Pty Ltd. Inspector Brian Dell v Gunnedah Timbers Pty Ltd.

HEARING DATES: 11/13/2002 DATE OF JUDGMENT: 11/22/2002

PROSECUTOR Mr D O'Neil of counsel SOLICITOR Gordon Henderson Phillips Fox LEGAL REPRESENTATIVES: DEFENDANTS Mr M Best of counsel SOLICITOR Mr G. Phillips Carroll & O'Dea

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

22 November 2002 Matter No. IRC 7247 of 2001 Inspector Brian Dell v Baradine Sawmilling Company Pty Ltd. Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 Matter No. IRC 7248 of 2001 Inspector Brian Dell v Gunnedah Timbers Pty Ltd. Prosecution under s 17(1)(b) of the Occupational Health and Safety Act 1983 JUDGMENT [2002] NSWIRComm 304

1 On 20 November 1999, Adrian Bilsborough, a casual stacker and cleaner employed by Baradine Sawmilling Pty Ltd ("Baradine Sawmilling") was severely injured while driving an old tractor which overturned, pinning Mr Bilsborough for a considerable time. At the time of the accident, Gunnedah Timbers Pty Ltd ("Gunnedah Timbers") owned and operated a sawmill in Gunnedah which were the premises upon which Baradine sawmilling were undertaking its operations on the day. Gunnedah Timbers owned the tractor which was involved in the accident when driven by Mr Bilsborough.

2 On 7 November 2001, Inspector Dell, an Inspector appointed under the Occupational Health and Safety Act 2000, applied for orders seeking to institute proceedings under the Occupational Health and Safety Act 1983. The Inspector alleged that Baradine Sawmilling was in breach of s 15(1) of the Act and alleged that Gunnedah Timbers was in breach of s 17(1)(b) of the Act.

3 Both matters were listed for mention in February and March 2002 before a plea of guilty was entered on 11 April 2002. The prosecutor conceded that the plea of guilty was one which could be regarded as an "early plea".

4 At the hearing to receive the submissions on penalty in relation to the plea of guilty, the parties produced an Agreed Statement of Facts. For present purposes it is appropriate to reproduce the relevant parts of that Statement: 4. At all material times, Gunnedah Timbers: 4.1 owned and operated a sawmill at Boggabri Road, Gunnedah NSW 2380 ( premises) ; 4.2 owned a Fiat tractor which was used at the premises ( tractor ); 5. At all material times, Baradine Sawmilling: 5.1 employed Mr Adrian Bilsborough as a casual stacker and cleaner at the premises; 5.2 employed Robert Stanley Ison as the acting foreman at the premises; 5.3 employed Brendon Draper as greenchain operator/yardman. 6. At all material times, George Henry Paul was a director of Gunnedah Timbers. 7. At all material times, Patrick Paul was a director of Baradine Sawmilling; 8. Baradine Sawmilling leased the premises owned by Gunnedah Timbers on Fridays, Saturdays and Sundays after the Baradine Sawmill was destroyed by fire in February 1999. 9. Bilsborough commenced employment with Baradine Sawmilling on Friday, 12 November 1999. Bilsborough was employed on a casual basis to work Fridays, Saturdays and Sundays. 10. On 19 November 1999, George Paul saw Bilsborough driving the tractor, and when he saw him doing this, ordered him to stay off the tractor and return to the green chain to stack timber. 11. On 20 November 1999, Bilsborough, in the course of his employment had driven the tractor to tow the trailer which contained sawdust and other rubbish to the rubbish dump located behind the sawmill. Ison was aware that Bilsborough was using the tractor. Shortly before the accident, Bilsborough again gained access to the tractor and drove it around the premises without the trailer attached. Bilsborough drove the tractor to an area of woodchip piles which was approximately 500 metres from Bilsborough's area of work at the premises. 12. At the time of the accident, Bilsborough was driving on a stockpile of woodchips. As he was attempting to turn, he changed gears. When he released the clutch, the tractor was not in gear; it ran away down the slope and turned to the left. It then rolled over sideways ending up side down with Bilsborough trapped under the tractor ( the accident ). Bilsborough was trapped underneath the tractor for approximately 30 minutes. At the time of the accident, it was Bilsborough's fifth day of employment with Baradine Sawmilling. 13. As a result of the accident, Bilsborough suffered several injuries including numbness, cuts and bruises to his buttocks, bruising to his buttocks, bruising around the tail bone, and injury to his penis. 14. On 22 November 1999, the Prosecutor attended the premises and observed as follows: (a) An upside down orange and grey tractor which was identified to him as the machine Bilsborough was operating at the time of the accident; (b) The tractor had silver badges on both sides of the bonnet with the words Fiat on it. His inspection revealed that the tractor was not fitted with any form of rollover protection. Whilst the Prosecutor was inspecting the tractor, he spoke with George Paul, who confirmed that the tractor was the machine operated by Bilsborough at the time of the accident. 15 On 20 November 1999, the Prosecutor spoke with Patrick Paul who informed him that the tractor was owned by Gunnedah Timbers. 16. As a result of his observations and investigations, the Prosecutor found as follows: (a) Prior to Bilsborough operating the tractor no assessment was carried out to assess his ability to competently operate the tractor; (b) No training or instruction was given to Bilsborough regarding the operation of the tractor; (c) The level of supervision provided to Bilsborough was inadequate in that he was able to gain access to the tractor and no one was aware of his location at the time of the accident; (d) The accident was only discovered by good luck by Ison; (e) Baradine Sawmilling had inadequate procedures to prevent the unauthorised use of plant and equipment; (f) Baradine Sawmilling allowed Bilsborough to access and operate a tractor that was not fitted with any form of rollover protection. 17. On 22 November 1999, the Prosecutor issued improvement notices nos. 117266 and 117569 requiring Baradine Sawmilling to implement and maintain control measures that ensure persons are not exposed to risk of serious injury by accessing and operating a Fiat tractor without any rollover protection fitted, and requiring them to implement and maintain control measures that ensure inexperienced persons are unable to access and operate tractors without adequate supervision, training or competency assessment being carried out. 18. On 22 November 1999, the Prosecutor issued improvements notices nos. 1172665 and 117268 requiring Gunnedah Timbers to implement and maintain control measures that ensure persons are not exposed to a risk of serious injury by accessing and operating a Fiat tractor without any rollover protection fitted, and to implement and maintain control measures that ensure unexperienced persons are unable to access and operate tractors without adequate supervision, training or competency assessment being carried out. 19. Gunnedah Timbers, being a person who had to any extent control of plant in non domestic premises which was provided for the use or operation of persons at work (not being its own employees), breached Section 17(1)(b) of the Occupational Health & Safety Act 1983 on 20 November 1999, in that it failed to ensure that a Fiat tractor ("the tractor") was safe and without risks to health at its premises located at Boggabri Road, Gunnedah in the State of New South Wales. Particulars of Gunnedah Timbers' breach are as follows: (a) failure to ensure that the tractor provided for use by non-employees, specifically Adrian Dennis Bilsborough, was fitted with "roll over" protection; (b) as a result of these failures, Adrian Dennis Bilsborough suffered injury. 20. Baradine Sawmilling, an employer, breached section 15(1) of the Occupational Health and Safety Act 1983 on 20 November 1999, in that it failed to ensure the health, safety and welfare of its employees at work, in particular Adrian Dennis Bilsborough, in that it failed to provide a system of work that was safe and without risks to health concerning the operation of a Fiat tractor at premises located at Boggabri Road, Gunnedah in the State of New South Wales. Particulars of Baradine Sawmilling's breach are as follows: (a) Failure to ensure that the tractor was fitted with "roll over" protection when provided for use by its employees; (b) Failure to provide adequate training, instructions and supervision to employees for the safe operation of the tractor; (c) Failure to adequately assess the competence of employees who operated the tractor; (d) As a result of these failures, Adrian Dennis Bilsborough suffered injury.

5 The prosecutor also tendered, without objection, four photographs of the scene of the accident, depicting the upturned tractor and the immediate surroundings taken by Inspector Dell two days after the accident. Those photographs showed that there was no trailer attached to the tractor and also demonstrated the height, slope and nature of the woodchip pile and the relative unevenness of the ground in the area in which Mr Bilsborough had driven the tractor on 20 November 1999.

6 For the defendants, an affidavit sworn by George Henry Paul was read. Mr Paul was 68 years of age and was a member of the Australian Society of Accountants, the Chartered Institute of Accountants and was a non-practising barrister in New South Wales from 1971. He had joined an accountancy practice in Gunnedah in 1959 and was a senior partner until he retired from the practice in 1997. Besides his practice as an accountant, he described himself as having, for many years, a strong involvement in sawmill operations at Gunnedah and more recently at Baradine.

7 His involvement with Gunnedah Timbers began in 1966 although the sawmill had been in operation since 1948. In 1974, with his wife, he acquired the other proprietor's interest in Gunnedah Tmbers. He and his wife had been directors of Gunnedah Timbers since 1966 and were the only two directors and shareholders of Gunnedah Timbers.

8 In 1994, the Paul family decided that they should purchase and re-build the Baradine Sawmill which had been operating since 1989 but was facing liquidation. The family believed that they could work together to rebuild the mill. Mr Paul's five sons purchased the Baradine Mill and formed the corporate entity of Baradine Sawmilling Co. Pty Ltd. At the time of hearing three of his sons were current directors of Baradine Sawmilling and one of them, Patrick Paul, also managed the Gunnedah Mill.

9 In February 1999, the Baradine Mill was completely destroyed by fire. At that time the Baradine Mill employed approximately 12 full-time workers. In order that those employees did not lose their jobs, arrangements were made whereby the Baradine operations would temporarily operate from the Gunnedah Mill site. Arrangements were made for Gunnedah Timbers to lease its premises to Baradine Sawmilling on Fridays, Saturdays and Sundays. Gunnedah Timbers was thus able to run its operations on Mondays, Tuesdays, Wednesdays and Thursdays. All Baradine employees were offered a job at the Gunnedah site, and because of the distance between the two sites (approximately 150 kilometres), arrangements were made to accommodate the Baradine workers in a motel at Gunnedah. Eight of the 12 Baradine full-time employees took up the offer to work at the Gunnedah premises. The Baradine Mill has been rebuilt and has been in operation since February 2001.

10 The Baradine Mill at the time of hearing employed 12 to 13 full-time employees, while Gunnedah Timbers employed 13 to 14 full-time employees.

11 Since being involved in mill operations, Mr Paul stated that he had personally involved himself with workplace safety and implementing more efficient work systems. As an example, he spoke of introducing new and safer saws and benches after purchasing the shares in the Gunnedah Mill in 1974.

12 In relation to the use of tractors, in 1986, two tractors used at the mill had been fitted with roll-over protection. The tractor which was involved in the accident was not being used at the mill at that time but was used on Mr Paul's rural property. It was not fitted with roll-over protection.

13 Mr Paul said that, in 1998, following substantial restructuring at the Gunnedah Mill, difficulty was experienced in transporting a box trailer for the purpose of carrying waste at the mill. The existing equipment would no longer fit into the remodelled mill and so Mr Paul agreed to make available the tractor from his rural property. That tractor was used by the regular mill cleaner employed by Gunnedah Timbers (Mr David Miller) to tow the box trailer and offload rubbish on the site. The tractor was rarely used on weekends because any rubbish from work performed on the weekend would be gathered in a pile for Mr Miller to attend to on the following Monday. Only two other persons used the tractor other than Mr Miller.

14 Mr Paul expressed his sincere regret in overlooking fitting the tractor with roll-bar protection and recognised this omission as a failing. The tractor was not used again and soon after the accident was sold for scrap metal for $300. A utility vehicle is now used to tow the rubbish trailer.

15 Mr Paul detailed his involvement with occupational health and safety matters. In 1996, he was appointed to the Executive of the New South Wales Cypress Steering Committee. In 1997, the Executive Committee decided to arrange a risk management survey of all member sawmills and to this end a work safety consultant was appointed to carry out inspections. The Gunnedah mill was inspected in June 1997 and a report subsequently prepared in relation to the risk assessment that was undertaken.

16 At about the same time that the risk assessment was undertaken, Mr Paul toured various Queensland mills. The purpose of the tour was to decide on the restructure of the Gunnedah Mill site to eliminate work safety problems, some of which were included in his affidavit.

17 As a result of the risk assessment and his tour to Queensland, in September 1997, four pieces of machinery were installed which necessitated the repositioning of two automatic one man benches and the removal of a large quantity of machinery. The cost of this restructure, including hire purchase charges, was valued at $585,366. Mr Paul emphasised that the expenditure did not result in any increase in the productivity per unit of labour.

18 After the installation of the new machinery in 1998, Mr Paul asked the Chairman of the Cypress Steering Committee to arrange for the work safety consultant to return and assess the new mill.

19 In around January 2001, Mr Paul was contacted by a representative of the CFMEU, and he agreed to a health and safety officer from the union inspecting the mill. In February 2001, a report was issued by the union which resulted in expenditure in excess of $40,000 to meet the safety requirements of the report. Mr Paul stated that every measure recommended by the union was implemented.

20 Since the accident, there has been an even stronger focus upon occupational health and safety issues and a number of further safety measures have been adopted at both mills. As an example, Mr Paul stated that safety officers at both mills had attended numerous courses to ensure that they were aware of correct procedures and were appropriately trained in safety issues. In 2001, the safety officers from the two mills attended a four day course conducted by the Timber Trades Industrial Association in Newcastle. In addition, a number of safety courses conducted by the Furnishing Industry Association of Australia had been undertaken by staff. Mr Paul stated that the Association had acknowledged that both mills were maintaining a strong and pro-active occupational health and safety policy. As a result he stated that both mills were receiving discounts on their workers' compensation premiums.

21 Both mills have a formalised procedure to identify hazards associated with the machinery used in the operation. Examples were annexed to Mr Paul's affidavit showing checklists relating to possible hazards which have been completed by the health and safety officers at both mills. The defendants also contracted with a workplace training organisation for the training of all full-time employees at both mills. That course involved an on the job training course conducted every three months with each employee receiving a certificate at the end of the course acknowledging they had finished the course. Although Mr Paul had thought that the training could be conducted by the defendants themselves, it was thought appropriate that over this two year period professional assistance should be used.

22 While a safety committee had operated prior to the accident, further improvements had been made in the area of employee consultation on safety issues. Every four weeks, a detailed inspection of the mills is carried out by management and the safety officer. Each member of staff is asked during these inspections if there are work safety concerns and there are also regular toolbox meetings where staff are able to raise and discuss safety concerns. The outcome of each toolbox meeting is posted on the work noticeboard, and if safety concerns are not rectified within a four week period, there is a further notice explaining why such measures have not been implemented and explaining when they will be implemented.

23 The two fitters and turners employed, who carried out the work safety requirements of the CFMEU report, continue to be employed full-time at both mills, carrying out alterations and improvements for both the efficiency and safety of the employees.

24 In January 2001, more formalised workplace procedures were prepared and copies of various procedures relating to the operation of machinery and the manual operations or tasks in both mills were annexed to Mr Paul's affidavit. Instruction and training, including refresher training, were provided to the employees in relation to these procedures and employees were asked to sign a document acknowledging that they had been instructed in safety workplace procedures and that they understood those procedures. Employees were also issued with workplace injury management policy statements. Any new employee is now taken through a formal work induction process which includes training in site safety rules.

25 Following the accident in November 1999, both companies formulated detailed written job descriptions for each employee. A new system was put in place relating to authorisation to access machinery at the mill sites. Written specifications were drawn up as to who could use what machinery at each mill. A notice is displayed on each of the mobile plants at both mills identifying who is authorised to use that machinery. The employee induction and training programmes also assist in ensuring that all employees are aware of their responsibilities and the bounds of their authority in using machinery. A policy has been implemented at the mills whereby all keys to the mobile machinery, including loaders and forklifts, are to be kept and returned to a designated area in the workshop once the authorised user of the machinery has finished operating that machinery. Only authorised personnel are allowed access to the keys. 26 Mr Paul gave evidence that both Gunnedah Timbers and Baradine Sawmilling had no prior convictions under Occupational Health and Safety legislation, a fact confirmed by the prosecutor. Mr Paul referred to sawmilling as an industry which could be "a particularly hazardous industry". Although Gunnedah Timbers had been in operation for approximately 36 years and Baradine Sawmilling had been in operation now for eight years, both mills have been able to maintain what Mr Paul described as an excellent safety record. Mr Paul stated that both companies had a strong commitment to occupational health and safety and that safety issues were of paramount importance in the operation of both mills.

27 Mr Paul saw both mills as playing an important role in their local community. The Baradine Mill was thought to be the biggest employer in town where the population is approximately 1200. Gunnedah Timbers was thought to be the third biggest employer in the town. At both mills, the employees were local people and many of the full-time employees had been with the mill for many years.

28 In addition to full-time employees, Gunnedah Mill contracts with a number of aboriginal people through the Aboriginal Co-Operative to strip timber for drying. Two aboriginal people are usually employed at any one time for this task and Mr Paul stated the companies were "pleased and proud to assist the local community" in this regard. Further, both mills have been engaged in a number of charitable works, including involvement with local cricket and sponsorship of the Gunnedah Pastoral and Horticulture Show. Mr Paul said he was a former president of the Rotary Club of Gunnedah and was a life member of the Apex Club of Gunnedah.

29 Evidence was given about the circumstances leading to the employment of Mr Adrian Bilsborough. Mr Bilsborough was the nephew of the secretary of Gunnedah Timbers who is a long time employee of that company. In early November 1999, there was a shortage in staffing and the Manger, Mr Halton, recommended the employment of two locals on a casual basis to stack timber and to assist with the raking and sweeping of sawdust and other rubbish in and around the operation shed at the mill. Mr Bilsborough was employed on 12 November 1999 to work Fridays, Saturdays and Sundays: he was employed to stack boards off the green chain, and to assist with the raking and sweeping of sawdust and wood offcuts when the flow of boards off the green chains was slow.

30 Mr Bilsborough's immediate supervisor was Mr Draper, the green chain operator and Mr Halton was Mr Bilsborough's manager. Upon his employment, Mr Halton gave Mr Bilsborough his work instructions in relation to the duties to be performed at the mill. Those duties did not include the driving of the tractor for any purpose. It was said that Mr Draper also provided Mr Bilsborough with instructions when working alongside Mr Draper at the green chain.

31 On the day before the accident, Mr Paul was in attendance at the Gunnedah mill and saw Mr Bilsborough driving the tractor which was not fitted with roll-over protection. He said he immediately told Mr Bilsborough that he should not be on the machine and told him to return to the green chain to stack timber. Mr Paul said he then asked Mr Draper to ensure that Mr Bilsborough did not go near the tractor.

32 On the day of the accident, Mr Draper was operating the green chain and Mr Ison was acting as foreman at the mill premises. The manager of Baradine, Mr Halton, and his assistant manager, were not at the Gunnedah Mill premises on this day but were required at the site of the Baradine Mill. An aerial photo of the site demonstrated that Mr Bilsborough was driving the tractor some 500 metres from his usual workplace and in a remote area on the site. Mr Paul stated that there was no need for the tractor to be anywhere near the woodchip area and he did not know why Mr Bilsborough had driven to the area "other than for the purpose of venturing around the grounds". 33 Mr Paul first heard of the accident at about 6 pm and immediately attended at the Gunnedah hospital, meeting Mr Bilsborough's parents, whom he knew. He stayed at the hospital to around 9 pm that night until advised that there appeared to be no complications with Mr Bilsborough's injuries. Mr Paul was able to make enquiries and keep informed about Mr Bilsborough's progress through his aunt, who continued to work at the Gunnedah Mill and who had worked there for 25 years.

34 Following the accident and Mr Bilsborough's recovery, he was offered continued employment at the Gunnedah Mill. That offer was left open for many months and Mr Bilsborough was offered other positions including positions involved in stripping timber. Mr Bilsborough, however, declined to take up further employment with the defendants.

35 Mr Paul said that in financial terms, both mills had to overcome a number of adversities and hardships and that it was difficult, because of the fickle nature of the industry, to keep the mills operating and returning a profit. In 1994, the Baradine Mill had not been appropriately managed and the industry had been experiencing a downturn. Mr Paul said that with his sons he had built up both mills focussing attention on the efficient and safe running of them. While the Baradine Mill suffered a considerable setback with the fire in February 1999, in recent years both mills had been showing an increased profit. The operating profit after tax for both mills was as follows: Gunnedah Timbers Baradine Sawmilling 2001 $118,123 $ 41,733 2002 $130,193 $128,017 In relation to the viability of the these mills, Mr Paul pointed out that there were recent Government policy considerations which may impact upon their future operation and profitability, but he was unable to be specific about these matters. 36 Mr Paul said that over the years in which the companies had operated, they had always co-operated with the WorkCover Authority. In fact, the Baradine sawmill had been inspected by the WorkCover Authority before being commissioned.

SUBMISSIONS FOR THE PARTIES 37 The prosecutor submitted that the principal objects of the Act were to protect workers from breaches of safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons were not exposed to risk to their health and safety at the workplace (WorkCover Authority of New South Wales v Air Express International Pty Ltd (1996) 83 IR 64; Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388; Alcatel Australia Ltd v WorkCover Authority of New South Wales (1996) 70 IR 99 at 106; WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Ltd and anor [2000] NSWIRComm 277 at [47]).

38 The primary factor to be considered in determining the sentence to be imposed was the objective seriousness of the offence charged (WorkCover Authority of New South Wales (Inspector Victor Page) v Wilco Hoist Rental Pty Ltd NSWIRComm 39 at p 31 per Wright J, President). While "each crime … has its objective gravity …", the proper approach to sentencing involved the initial consideration of the gravity of the subject offence viewed objectively (R v Dodd (1991) 57 A Crim R 349 at 355; WorkCover Authority of New South Wales (Inspector Victor Page) v Walco Hoist Rental Pty Ltd at p 32; Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476).

39 The prosecutor submitted that the following matters were of relevance in assessing objective seriousness: (i) specific factual matters relevant to the case; (ii) an assessment of the detriment to safety; (iii) whether there were simple and straightforward remedial steps that were available which would have avoided the accident; (iv) the maximum penalty; and (v) the degree of foreseeability of the risk. 40 In relation to the maximum penalty, it was pointed out that, being a first offender in each case, that amount was $550,000. This penalty was said to reflect the public expression by Parliament of the seriousness of the breach of these sections of the Act (WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonalds Australia Ltd and anor at p 47; Camilleri's Stockfeeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 - 699 per Kirby P.)

41 In WorkCover Authority of New South Wales (Inspector Victor Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 AR 163 at 186, Wright J, President stated: The task of the Court is thus to assess the relative seriousness of the offender's particular offence in relation to a worse case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalties set by the legislature from zero to the maximum.

42 In relation to factual matters, the prosecutor identified the following as being relevant in assessing objective seriousness: In relation to Gunnedah Timbers, that (a) roll-over protection was a specific safety feature; and (b) there were inherent dangers in driving tractors in a workplace containing woodchip piles. In relation to Baradine Sawmilling: (a) the injured worker was 16 years of age; (b) Bilsborough was a relatively new employee at the relevant time, in only his fifth day of employment; (c) Bilsborough had not been provided with any training or instruction in relation to the use of the tractor; (d) Bilsborough was not subject to any supervision whilst using the tractor; (e) Bilsborough was not assessed for driving competence; (f) roll-over protection, which was absent, was a specific safety measure .

43 In relation to an assessment of the detriment to safety regarding Gunnedah Timbers, the prosecutor submitted that the detriment to safety lay in the failure to provide roll-over protection and that there was a risk of serious injury. In relation to Baradine Sawmilling, the detriment to safety lay in the untrained, unsupervised driver, driving a tractor without roll-over protection. Again, there was a grave risk of serious injury.

44 As to the degree of foreseeability of a risk to safety, in relation to Gunnedah Timbers it was submitted that it was foreseeable that there would be a risk to safety if the tractor rolled. The defendant in that case had no particular basis to foresee that the tractor would roll but it was submitted that there was always a risk of such an incident. In relation to Baradine Sawmilling, it was submitted that it was clearly foreseeable that substantial risk attached to the factual scenario which existed, namely, an untrained, inexperienced 16 year old, on a new job, driving a tractor without roll-over protection, and able to access the tractor and use it in an activity which was not authorised.

45 The existence of simple and straightforward remedial steps which could have been taken by the defendant to avoid the accident were relevant in assessing the seriousness of the offence (Department of Minister of Resources of New South Wales (Inspector McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27; WorkCover Authority (Inspector Glass) v ACI Operations Pty Ltd [1994] NSWIRComm 11; Inspector Elizabeth Benbow v Planada Holdings Pty Ltd [2001] NSWIRComm 275). In relation to Gunnedah Timbers the inclusion of roll-over protection on tractors was commonplace and could not have presented any difficulty in being installed. It was a straightforward matter for the defendant to do so. In relation to Baradine Sawmilling, proper training and supervision would not have presented any difficulty. Young people were taught to drive motor vehicles of all forms on a daily basis throughout New South Wales. The need for Mr Bilsborough to be taught how to drive the tractor and allocation of time and concentration on the task would have been all that was required to teach Mr Bilsborough how to properly drive the tractor. Similarly, proper supervision was not difficult to put in place and was especially relevant, given Mr Bilsborough's inexperience. The inclusion of roll-over protection on tractors was commonplace and there was no reason to think that it would have presented any difficulty to this defendant.

46 Against the objective seriousness of the offence, the prosecutor accepted that there was to be weighed subjective factors in the defendants' favour. These were listed as being: (a) the process was filed on 7 November 2001, and after a not unusual period of negotiation the defendants entered a plea of guilty on 11 April 2002; (b) the defendants are entitled to a reduction in penalty up to 25 per cent depending on the Court's assessment of the timing of the plea; (c) the case against each defendant was strong. However, each defendant's plea has the substantial quality of facilitating the administration of justice; (d) the guideline judgment of R v Thomson; R v Houlton (2000) 49 NSWLR 383 was applicable.

47 In relation to each defendant, it was submitted that the evidence demonstrated that steps were taken to improve workplace safety after the incident. Such steps were said to highlight the ease with which the relevant detriment to safety could have been avoided. The prosecutor, however, accepted that the defendants were to be given credit for the efforts to make the workplace safe.

48 Appropriate remorse was shown by Mr Paul (the father of the directors of Baradine) in attending the hospital and showing appropriate concern for the wellbeing of the injured worker. This was a factor that the Court was entitled to take into account in the defendants' favour.

49 In relation to the records of each defendant in light of the fact that this was their first offence, the prosecutor submitted that the offence could properly be regarded as an aberration against previously good corporate occupational health and safety conduct.

50 On the issue of deterrence, the prosecutor submitted that adequate weight must be given to general deterrence in each case. In Capral Aluminium Ltd v WorkCover Authority (2000) 49 NSWLR 610, the Full Court, at paragraph 75, stated that it considered that the following extract from the judgment of Hungerford J in Fisher v Samaras Industries accurately stated the approach the Court should take in relation to the question of deterrence: 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 in the workplace. In relation to specific deterrence, it was submitted that the defendants had shown a good attitude in general to questions of workplace safety and had taken steps subsequent to the accident such that less weight needed to be given to the issue of specific deterrence than to the question of general deterrence in each matter.

51 In relation to the corporate structure, the prosecutor noted that there were two entities but also noted the relationship between the directors and the operations of the defendants. Specifically, the prosecutor accepted that there was room for the Court to exercise its discretion in relation to this one incident by approaching the setting of penalty by application of the principles or by analogy with the principles of totality.

52 For the defendants, it was submitted that the companies were separate entities. They operated related sawmills. The family connection in ownership of the mills was referred to in this respect.

53 In relation to the accident which took place on 20 November 1999, the defendants pointed to the unusual situation where the Baradine Sawmilling manager Mr Halton and the assistant manager were both absent due to the special circumstances arising from the fire at the Baradine Mill which required their attendance that day. Mr Ison, a benchman employed by Baradine, became the acting foreman and was supervising the Baradine sawmilling operations on the day. While Mr Bilsborough initially undertook his specified duties, contrary to the instructions from both Mr Halton and Mr George Paul, he began to operate the tractor for the purposes of towing a trailer filled with rubbish from the mill area to the rubbish dump some distance from his normal work site. It was accepted by the defendants that this work was performed with the knowledge and approval of the acting foreman, Mr Ison.

54 The defendant submitted that Mr Bilsborough operated the tractor without the trailer attached for a purpose unconnected with any employment duties and drove the tractor to an area of wood chips located some 500 metres from his work area. He drove the tractor on to the sloping chip pile, lost control of the tractor and was trapped by the tractor after it rolled, suffering injuries specified in the Agreed Statement of Facts. In submissions, this activity was described as a frolic of Mr Bilsborough which was entirely unconnected with the work he had been directed to perform by Mr Halton and Mr George Paul. The defendants described Mr Bilsborough's action as being akin to skylarking in sand hills but, in so submitting, accepted their responsibility under the Act and in relation to the particulars to which they had pleaded guilty. 55 The defendants accepted what they described as the "practical reality" of the corporate structure, an apparent acknowledgement of the family involvement in both enterprises. It was accepted that Mr George Paul had considerable direct influence in both corporations. That was one reason why he was in a position to give directions to Mr Bilsborough on the day before the accident, instructing him to get off the tractor and return to his normal work of stacking.

56 The defendants also pointed to the following factors: (a) that the usual and successful regimes for safety were dislocated at the time of the accident; (b) Mr Bilsborough was only 16 years of age and was not supposed to drive the tractor; (c) two tractors utilised at Gunnedah had been fitted with roll-over protection in 1986 and it was only the way in which the tractor involved in the accident came to be used after the re-structure, coming from Mr Paul's property, that resulted in this tractor slipping through the defendants' usual system of safety; (d) the usual use of tractors at the Gunnedah Mill was in a confined area over even ground and over short distances. These tractors were not used to go to the area where the accident occurred.

57 The defendants also accepted that Mr Paul was essentially "the father figure" and was a senior, finance man in the district and as such exerted considerable direct influence on the two defendants beyond that which one would expect in separate corporate structures.

58 It was pointed out that, during the short period of employment, Mr Bilsborough was not employed to drive a tractor. The driving of the tractor was contrary to the direction of Mr Paul given the day before and appears to result from a breakdown in communication between the manager and the acting foreman as to the duties which should be allocated to this 16 year old. The defendant did not contest the fact that the acting foreman permitted Bilsborough to use the tractor for the removal of rubbish.

59 The fact that roll-over bars were fitted to two tractors used at the plant in 1986 showed that it was an unfortunate oversight not to have fitted the same protection to the tractor involved in the accident. However, it was submitted, it was an oversight not based on disregard for the tenets that underlie the duties and responsibilities of employers but arose where the defendants had otherwise been diligent in the area of occupational health and safety.

60 In relation to foreseeability, the defendants suggested that the risk of injury and foreseeability of that risk was remote rather than being reasonably foreseeable. In the ordinary course of events, it was submitted, tractors do not roll on even ground in their usual operation. While it is true that tractors are used on rough and uneven ground and do have a capacity to roll, in the usual course of its operation that risk was remote in relation to this tractor.

61 The defendants accepted that the primary factor to be considered was the objective seriousness of the charges which require objective consideration to be given to the gravity of the offence. Baradine Sawmilling accepted that it was foreseeable that Mr Bilsborough might operate the tractor, a foreseeability that became a reality, on 19 November 1999. In response to this reality Mr Paul immediately took remedial action to rebuke Mr Bilsborough, ordering him not to undertake the act again. Despite that direction, Mr Bilsborough drove the tractor the next day. Further, the clear instructions of the work to be undertaken by Mr Bilsborough (apart from Mr Ison's role) did not extend to driving the tractor. In addition, it was submitted for Baradine Sawmilling that it was not reasonably foreseeable that there was a risk of injury in the usual operation of the tractor. The tractor was to be used to drive a short distance from the mill to the rubbish dump along a flat area. The risk of the tractor rolling was therefore remote. The risk of injury was only crystallised by Mr Bilsborough's dangerous act of driving the tractor on to a woodchip pile far from his work area. These submissions were not made in an attempt to excuse the breach, but rather as a factor in assessing culpability.

62 In relation to specific deterrence, both defendants drew attention to their conduct. Firstly, the tractor was never used again, was sold for scrap metal and a utility replaced the tractor as the method of shifting the rubbish. In addition, work methods were introduced which allocated machinery to specific people trained and authorised to use the machinery and a system was introduced whereby the operating keys were removed from that machinery and kept in a central location to be accessed only by those authorised to do so.

63 A significant feature in this case was the fact that there were no previous convictions in relation to occupational health and safety matters. The plants had been operational for a number of years, especially the Gunnedah plant which had been operating under the control of Mr George Paul for 33 years at the date of the offence. It was submitted that Mr George Paul and his sons had an excellent attitude to safety generally, prior to the offences, as evidenced by the risk assessment in 1997 and the expenditure of almost $600,000 to eliminate work safety concerns. This was also significant in view of the industry in which the defendants operated. In the circumstances, the Court may comfortably conclude that the offences were an aberration.

64 In relation to subjective considerations, it was submitted that the general high regard for safety held by the defendants prior to the offences had been re-focussed in the period since the accident. The employees had undertaken safety courses; a hazard identification procedure was now adhered to; a specialised workplace training organisation had been retained to train the employees and employee induction had been reinforced; specific job descriptions and authorisation to use machinery is now displayed; access to all keys to mobile machinery is restricted; four weekly inspections of the site are carried out and employee input is sought. Against this background it was to be noted that, in January 2001, a CFMEU inspection was voluntarily agreed to and the recommendations adopted which involved an expenditure of another $40,000.

65 It was submitted that the steps taken both immediately after the accident and in the period since, revealed that the defendants are keenly aware of the seriousness of the accident and demonstrate their commitment to avoiding any further breaches.

66 Contrition was exhibited by the immediate attendance of Mr George Paul at the hospital after Mr Bilsborough's accident, his contact with Mr Bilsborough's parents and Mr Paul's continued enquiries of his well being after the accident. Further, Mr Bilsborough was offered continued employment at the mill, including work stripping timber, being a position not involved in the operation of any machinery.

67 The defendants had co-operated fully with the WorkCover Authority at all times after the accident. Mr George Paul and Mr Patrick Paul, as directors of the respective defendants, and other staff had made themselves available to be interviewed and had given frank answers to all questions asked them.

68 An issue was raised as to the financial status of the defendants. Mr Paul's affidavit indicated that both defendants had made an after tax operating profit of approximately $130,000 in the last financial year. It was submitted that this return was to be considered modest and should be taken into account in determining the relevant capacity of each defendant to pay the penalty imposed. It was submitted that regard ought to be given by the Court to the potential impact a significant fine might have on the ability of both defendants to continue to provide significant employment opportunities in regional New South Wales both directly and indirectly. The evidence showed that Baradine Sawmilling was the single largest private employer in Baradine and that Gunnedah Timbers was the third largest private employer in Gunnedah. It was also submitted that the continuing economic viability of the defendants' operations was subject to a degree of uncertainty arising from pressure to limit access to cypress pine.

69 It was agreed between each defendant and the prosecution that each defendant would pay the sum of $7,000 in respect of costs.

DELIBERATION 70 There was no issue that the starting point for considering an appropriate penalty in each case was establishing the objective seriousness of the offence charged. Both defendants accepted that the breach in which they were involved was serious. Indeed, it was a matter of simple good fortune that this accident did not result in a fatality. This young man had taken the tractor to a remote area of the mill and well away from the area where he performed his usual duties. It was accepted that it was only good luck that Mr Bilsborough was found when trapped under the overturned tractor. These factors demonstrate just how much more serious the result of this accident could have been and is evidence, in an overall sense, of the seriousness of the risk identified.

71 It also has to be borne in mind that these charges arose in relation to the employment of a 16 year old young man in an inherently dangerous undertaking. He had only been employed for five days at the time of the accident and, although the day before the accident, steps had been taken to direct him not to drive the tractor, there appears to have been no general instruction given to those who exercised supervision (such as acting foreman Ison) that it was not appropriate or safe for Bilsborough to drive the tractor. While explanations have been given for the breakdown of the usually effective system of safety, on this particular day the fact is that the supervision of Mr Bilsborough was allocated to an acting foreman who appeared to have been otherwise occupied with a task to occupy his mind within the mill. It is difficult to understand how the acting foreman satisfied himself that it was appropriate for this inexperienced and only recently employed young person to drive an admittedly old tractor around the grounds of the mill, especially in the absence of what has been referred to as "roll-over" protection.

72 While I accept the evidence of the long history of safe working of both defendants, having regard to the nature of the industry, this lapse in their system is almost inexplicable. To the extent that the defendants seek to reduce their culpability by reference to the fact that Mr Bilsborough was on a frolic of his own, the truth of the matter is that a proper system would not have permitted his use of the tractor. Some care needs to be exercised in dealing with submissions of this nature. In Riley v Australian Grader Hire (2001) 103 IR 143, the Court stated: [15] … the Magistrate appears to have reached her conclusion as to the objective seriousness of the offence, having regard to the lack of commonsense of the injured worker. It is reasonably clear from her decision that it was concluded that the conduct of the injured worker effectively removed or minimised the liability of the respondent in relation to the lack of training or instruction for the employee. This was wrong in principle. Section 15 of the Occupational Health and Safety Act requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority (New South Wales) (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 at 257: Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connection. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. The Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry. 73 There is no doubt that the use of a tractor without "roll-over protection" was a foreseeable risk. Against this accepted fact, the defendants argued that the use of this tractor was restricted to flat ground close to the sheds and was not used on uneven ground or in the type of conditions found around the woodchip pile. I am unable to accept that submission. The fact is that this work site contained areas which were both flat and uneven and could be accessed by a tractor. Two tractors had already been fitted with roll-over protection, some 13 years before this accident, even though they were used primarily on flat or even surfaces. The obligations imposed by the Act are not confined to the making of appropriate safety provisions for diligent, conscientious workers but extend to ensuring, for instance, that mobile machinery may be used other than in accordance with workplace instructions. That was clearly a possibility at the site occupied by Gunnedah Timbers. The submission that Baradine Sawmilling could not have foreseen that this tractor, firstly, might be used outside the area of its normal operation and, secondly, may roll over, cannot be accepted. Further, I accept the factors outlined by the prosecutor in each case as indicating the objective seriousness of each offence charged. Those considerations include the fact that the existence of simple and straightforward remedial steps which could have been taken by the defendants to avoid the accident are relevant to assessing the seriousness of the offence. The steps since taken demonstrate how effective measures could have been simply adopted: authorising only nominated people to use mobile equipment and restricting the area where the keys to that mobile machinery might be accessed.

74 The consideration of general deterrence is accepted by each defendant. The risk here did not involve equipment specific or limited to operations within the timber milling industry but involved a piece of machinery widely used in industry. For this reason, general deterrence plays a significant role in the present offences.

75 The overall history of the defendants, and in particular Gunnedah Timbers, supports the view that the occurrence of this accident was something of an aberration. So much was submitted by both the prosecutor and each defendant. I bear that in mind in relation to the consideration of specific deterrence. The evidence disclosed substantial expenditure and attention to occupational health and safety prior to this accident. The steps taken by the defendants after the accident have addressed not only the particular accident but have involved a wider canvas. The evidence suggests that the defendants have not only been active in maintaining safe systems of work but have been involved in pro-active steps to promote workplace safety. Against this background the considerations of specific deterrence, while having a role, is of less significance in the present cases.

76 In relation to subjective factors, I accept that the pleas of guilty were entered in a timely fashion and may be regarded in each case as an "early plea". Having regard to the guideline judgment in R v Thomson; R v Houlton, I am of the view that each defendant is entitled to a discount for the utilitarian benefit of the plea. The present circumstances justify, in my view, a discount of 25 per cent.

77 I regard the following matters as significant and to be taken into account as subjective considerations: (a) the contrition demonstrated on behalf of the defendants and the concern for Mr Bilsborough's welfare extending not only to attendance at the hospital for a considerable period of time immediately after the accident, but also to the offer of suitable employment in other areas of the mill;

(b) the absence of prior offences speaks highly of the defendants' regard for occupational health and safety measures. The defendants operate in an inherently dangerous industry and their record is a significant achievement. Although Baradine Sawmilling had been in operation only five years prior to the accident, while Gunnedah Timbers had been in operation for 33 years or more, I would not distinguish between the defendants in light of the evidence of the overall influence of Mr George Paul, which I am satisfied not only extends to both operations but which is largely responsible for the way in which each mill operates; (c) the steps taken since the accident to improve the occupational health and safety at the workplace, underlined as it is by the considerable expenditure voluntarily undertaken in upgrading the works and their associated systems of work prior to the accident; (d) the co-operation with WorkCover in relation to this particular accident and the co-operation and invitation extended to WorkCover to inspect the re-opened Baradine Mill; and (e) the defendants' history of good citizenship. Having regard to these factors, I would allow a further discount on penalty of 10 per cent.

78 The defendants raised their financial position as demonstrated by the "modest" profits derived during the last two years from both operations. In the course of addresses, I drew counsel's attention to the judgment in Inspector Haynes v C I & D Manufacturing Pty Ltd and anor (1995) 60 IR 455. In that case, there was both affidavit and oral evidence concerning the financial state of the companies which demonstrated that the financial viability of the group of companies involved was precarious. The managing director himself had placed a substantial amount of his own money into the enterprise to enable it to survive. The Full Court noted that the legislature had introduced a differentiation of penalty by providing that there should be a different penalty for a corporate defendant from that of a personal defendant. The Full Court continued: In a number of cases decided under the OHS Act where the corporate structure of the defendant has been shown to be little more than the means of distribution of earnings arising from personal exertion, or where, as a matter of corporate structure, the burden of any fine levied would fall on one person or one family group ownership, the Court has seen it appropriate to impose a fine substantially less than if the corporation was functioning as a company with assets of a substantial kind. It was made clear to counsel for the defendants that the nature of the financial material before the Court in this matter did not permit an assessment to be made of the overall resources of the defendants, nor was there any material upon which a conclusion could be based as to the effect of a substantial fine upon either of the corporate defendants. After an adjournment to consider these matters, the defendants elected to call no further evidence but did emphasise again the modest nature of the profits generated in recent years and the importance of the two mills in the country towns in which they operated.

79 In Manpac Industries Pty Ltd v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435, the Full Court, at p 467, dealt with the treatment of the financial situation of the appellant in that case and stated: [81] … 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, Walman International 80 IR at 33; WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Probab Industries (49 NSWLR at 7714; 100 IR at 76). [82] However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209-210, Wright J, President observed:

… whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty … When viewed in the context of the statutory mandate in Section 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 …

80 The evidence for the defendants as to each corporation's financial status is sparse. I am unable to assess whether or not a substantial fine would have an impact upon the continued viability of each defendant particularly having regard, as I do, to the fact that they appear to occupy an important positions in the towns in which they operate. I am left in the position that I have far less financial information than the Full Court was able to consider in Haynes v C I & D. In those circumstances, I can do no more than, in a general sense, take into account the recent after tax profits returned by each defendant. I therefore propose to consider the objective seriousness of the offence as the primary factor, with subjective factors playing a subsidiary role to the gravity of the offence itself to ensure a sentence is not produced which fails to adequately reflect the seriousness of the offence.

81 The final issue to be considered is the relationship between the two companies. Both the prosecutor and the defendants have drawn attention to the close family links which exist in the operation of these two corporate entities. There is an absence of joint directorships but I believe that there is force in the defendants' submission that the practical realities of the corporate structures have to be considered. That practical reality recognised Mr George Paul as the father figure and senior person in the community, a person with a strong financial background and one who exerted considerable direct influence beyond the formalities of the corporate structure. In Haynes v C I & D, the Full Court came to the view on the evidence that the connection between the two companies was so intimate that it was permissible to view the offence in a global way. The Court determined a total fine and then gave consideration as to whether or not a fine could be imposed jointly and severally so that internal measures could be taken to meet the fine so as to avoid undesirable consequences on the economic status of the other legal entity. Having concluded that this approach was not possible, the Full Court determined that the totality of the fine should be apportioned having regard to the fact that both entities were clearly linked and that each should therefore bear the fine equally. Recently, Staunton J has given consideration to a similar situation (WorkCover Authority of New South Wales (Inspector Robinson) v Bosnjak Holdings Pty Ltd and anor [2002] NSWIRComm 295). Her Honour referred to the judgment in Haynes but noted the technical difficulty of applying the principles of totality and parity. Her Honour cited earlier authority for the proposition that where offences under s 15 and s 16 of the Act effectively arise from one incident involving the same successive failures, it was appropriate to impose a single penalty. Her Honour concluded that, in the circumstances of the case before her, she would adopt the "commonsense" approach and apply one penalty (see para [37]). The prosecutor submitted that such a discretion was open to the Court in these matters. In the circumstances disclosed in this case, I think it is appropriate to adopt the approach of setting an overall penalty and dividing it equally between the two defendants. The penalty fixed on that approach is $120,000 with a total discount of 35 per cent, resulting in an amount of $78,000 and a fine of $39,000 for each defendant.

ORDERS 1. In the matter of Baradine Sawmilling Pty Ltd, IRC 7247 of 2001, I make the following orders: (i) The defendant is convicted of the offence with which it is charged. (ii) The defendant is to pay a penalty in the sum of $39,000. (iii) The prosecutor is to have the benefit of a moiety of the penalty imposed on the defendant. (iv) The defendant is to pay the prosecutor's costs in the agreed sum of $7,000.

2. In the matter of Gunnedah Timbers Pty Ltd, IRC 7248 of 2001, the Court makes the following orders:

(i) The defendant is convicted of the offence with which it is charged. (ii) The defendant is to pay a penalty in the sum of $39,000. (iii) The prosecutor is to have the benefit of a moiety of the penalty imposed on the defendant. (iv) The defendant is to pay the prosecutor's costs in the agreed sum of $7,000.

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