Inspector Charles v Wollondilly Mobile Engineering Pty Ltd

Relevant principles 11The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the OHS Act . Their Honours stated at [8] - [15]: [8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing. [9] In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: '[I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion.' [10] The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474 as follows: '[I]t is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence' ... [11] The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 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 v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and WorkCover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) (at [22]).' [14] The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows: '[B]oth aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Workcover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [40]- 43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.' [15] In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]: '[I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c).'

Consideration 12There are a number of considerations involved in determining the objective seriousness of the offences that are the subject of these proceedings. The risk to the health and safety of the three workers was one of serious injury or death as a result of fire and/or explosion. The gravity of such a risk to safety was obvious. 13Section 21A(2)(ib) of the Crimes (Sentencing Procedure) Act 1999 (" CP Act ") provides that the fact that an offence involved a grave risk of death to another person or persons is an aggravating factor to be taken into account in determining the appropriate sentence for an offence. 14There can be no doubt that the risk in this case was obvious and foreseeable. "Hot work" involving the use of a spark producing electric angle grinder and electrical arc welder, producing sparks and molten slag respectively, was conducted in the immediate vicinity of a ready source of fuel in the form of a large quantity of timber shavings. As I observed in Wollondilly at [22], "These processes produce hot particles, sparks and hot surfaces and are a common cause of ignition for industrial fires and explosions." 15Australian Standard 1674.1 Safety in welding and allied processes ("AS 1674.1") expressly identifies the relevant risks. AS 1674.1 identifies sawmills and woodworking plants as hazardous areas in which, among other things, combustible dust or other flammable or explosive substances may be present. AS 1674.1 states: Off Cuts and Electrode Stubs Before any hot work commences, arrangements shall be made to prevent any work off-cuts, hot metal, slag or electrode stubs from lodging in places where there is any possibility of starting a fire. Timber Where any hot work is to be carried out adjacent to or above timber, the timber shall be protected, by wetting or other suitable means, from the direct heat of any flame or arc and from sparks, slag and hot metal particles. ... Fires can be caused in locations remote from the actual working area by sparks or hot slag from hot-work operations or by transfer through metal walls or bulkheads. ... Hot-Work Area The area within a radius of 15m from the point where the hot work is to be undertaken, including the space above and below that area, should be made safe by various techniques, preparation and testing, to ensure that any risk of fire or explosion resulting from the hot work is eliminated. 16In addition, the risk in this case could have easily been eliminated. Emptying the shavings bin prior to the commencement of hot work, thereby removing its contents as a source of potential fuel for a fire, was an obvious step (see Wollondilly at [41] and particular (e) of the s 8(1) charge). 17The hot work on the shavings bin could have been scheduled to be performed when the moulder and its extraction system were not in operation, thus removing the oxygen-enhancing turbulence created by the extractor fan. Cutting work could have been performed using a hacksaw rather than an angle grinder and the new handrails could have been attached by bolts or other fastenings, rather than being welded in place, thus eliminating hot work as a potential source of ignition (see Wollondilly at [41]). 18These steps should have been included in a safe work method statement. No such statement was prepared (see particular (b) of the s 8(1) charge). Upon the identification in a risk assessment of the risk of a fire, an emergency evacuation plan that provided for evacuation rather than opening the shavings bin doors, should have been implemented (see Wollondilly at [41] and particulars (d), (f)(ii) and (g) of the s 8(1) charge). 19The absence of a hot work permit system is of particular significance. The need for the issue of a permit to conduct such work acts so as to prevent the creation of risk of the type in this case. AS1674.1, referred to earlier requires various multiple sign-offs. Furthermore, in this matter, a sign-off was provided by Mr Greg Blackburn, a self employed occupational health and safety consultant engaged by the defendant to conduct safety audits of its employees, who was present at the site on the day of the incident. 20Mr Battersby, an employee of Penrose Pine, was in charge of the area where the hot work was to be performed. He was unaware that the hot work was being carried out on the shavings bin and had not been informed that such work was going to be conducted (see Wollondilly at [26]). A hot work permit system would have alerted Mr Battersby that hot work was going to be conducted. Penrose Pine could then, in accordance with its standard procedures, have ensured that such work was not conducted unless the shavings bin had been emptied and the evacuation system shut down (see Inspector Charles v Penrose Pine Products Pty Ltd (No 2) [2010] NSWIRComm 186 at [44]). 21The defendant had no such system in place. Although the defendant had recognised the need for such a system and had engaged Mr Blackburn to introduce it, this had not occurred (see Wollondilly at [18], [35]). 22All of the above measures were readily available and simple to implement. Such measures as conducting a risk assessment, preparing a safe work method statement and implementing a hot work permit system are nothing more than standard proper industrial practice. 23It follows that the defendant's breach should be properly characterised as serious.

General deterrence 24General deterrence is an important factor in this matter. The risk of fire, as I have already observed, in a sawmill where there is welding, cutting, and grinding of metal that produces heat or sparks, creates an obvious risk to safety. This prosecution could have been avoided if simple protective measures had been put in place. The conduct of hot work is commonplace in industry in New South Wales. I consider it is appropriate to once again draw attention to the need for employers and contractors in the sawmilling industry and wood working plants, to be constantly vigilant of the need to ensure that workers are not exposed to the risk of fire. Employers must comply with the Australian Standard to ensure safety in welding and hot work. The Occupational Health and Safety Regulation 2001, and in particular cl 62, should be implemented on all sites. 25It is also appropriate to draw attention to the fact that Mr Pendergast, although a qualified boilermaker, was a comparatively young worker at 22 years of age. Mr Thornton was a second year boilermaker, aged 17 years. 26In WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd [2000] NSWIRComm 277; (2000) 95 IR 383 at [230], Walton J Vice-President said: ... In my view, the existence of a risk to safety in a business which engages a large number of young, inexperienced and vulnerable workers, particularly where the business utilises dangerous equipment, must enhance the seriousness of the offence. Such a circumstance compels the imposition of a sentence which will attract the attention of other persons or corporations operating enterprises with similar features to the necessity of vigilantly ensuring the safety of young and inexperienced workers. ... His Honour's observations were approved by the Full Bench in Inspector Gregory Maddaford v Graham Gerard Coleman & Anor [2004] NSWIRComm 317; (2004) 138 IR 21 at [96]. 27I therefore include a significant element in the penalty for general deterrence.

Specific deterrence 28The defendant is in liquidation. In such circumstances, the prosecutor accepts that specific deterrence should not figure significantly in my determination of penalty.

Subjective factors 29The defendant has not appeared. There was no evidence before the Court of factors relevant to mitigating a penalty that would otherwise flow from a consideration of the objective seriousness of the offences. 30The defendant pleaded not guilty to both charges on 22 October 2009, prior to it being placed in liquidation. It is therefore not entitled to the benefit of any discount on penalty flowing from the benefit of guilty pleas. The defendant has no prior convictions and the prosecutor acknowledged that the Court may extend to the defendant the leniency normally extended to "first offenders". There is no evidence of remorse or contrition.

Totality 31The prosecutor accepts that the two offences found to have been committed by the defendant arose out of the same course of events. The principle of totality therefore has application.

Parity 32The principle of parity was succinctly stated in the joint judgment of Dawson and Gaudron JJ in Postiglione v R (1997) 189 CLR 295 at 301-302 as follows: The parity principle upon which the argument in this Court was mainly based is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated. On some occasions, different sentences may indicate that one or other of them is infected with error. Ordinarily, correction of the error will result in there being a due proportion between the sentences and there will then be equal justice. However, the parity principle, as identified and expounded in Lowe v The Queen , recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to "a justifiable sense of grievance". If there is, the sentence in issue should be reduced, notwithstanding that it is otherwise appropriate and within the permissible range of sentencing options. Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality. 33Penrose Pine pleaded guilty to breaches of s 8(1) and s 8(2) of the OHS Act which arose out of the same incident. Although there is a substantial similarity between the particulars of the offences committed by Penrose Pine, they are not the same as the particulars in these proceedings. A significant difference between the two defendants is their actual knowledge as to whether Mr Pendergast and Mr Thornton were going to perform hot work on the shavings bin on 22 March 2007. 34The Managing Director of Penrose Pine was unaware that work was being performed on the shavings bin on 22 March 2007 (see Penrose Pine at [59]). In addition, Mr Battersby was unaware that hot work was being carried out on the shavings bin and had not been informed that such work was going to be conducted (see Wollondilly at [26]). 35In Penrose Pine I observed at [60] - [61]: [60] On the morning that the work was to be carried out, Mr Blackburn attended the defendant's site to undertake a covert safety audit. Mr Blackburn discussed with both Mr Pendergast and Mr Thornton, after they had descended from the shavings bin, the work that they were about to undertake. Mr Cush submitted that this was akin to a "toolbox" meeting regarding the tasks that Wollondilly were preparing to undertake that morning. Mr Blackburn's advice to Wollondilly's employees was for them to wear safety harnesses, to ensure that the work area was wet in order to prevent fires and to have the fire extinguisher with them. [61] Mr Cush contended that Mr Blackburn was "seriously negligent" in his responsibilities towards the defendant, Mr Pendergast, Mr Thornton and Wollondilly. He submitted that Mr Blackburn should have stopped Wollondilly's employees from proceeding in circumstances where he was aware that they were about to commence "hot work" on the shavings bin until all risks had been identified. It should be noted at this point that Mr Blackburn was charged with breaches of the OHS Act. However, according to Mr Cush, he has "disappeared off the face of the earth" and the charges were withdrawn. 36In light of these facts, it is, in my view, reasonable and proper to attribute the knowledge of Mr Blackburn to that of the defendant here. The defendant's actual knowledge makes its breach an even more serious offence than that of Penrose Pine who had prior convictions. As the defendant has no prior convictions, the maximum penalty for each offence is $550,000. 37The principle of totality requires consideration of the overall culpability or criminality attributable to the defendant from both convictions, and in the process ensures that there is no "double counting of the culpability of the defendant from the respective offences": WorkCover Authority of New South Wales (Inspector Mulder) v Yass Shire Council [2000] NSWIRComm 57; (2000) 99 IR 284 per Wright J at [37]. 38Approaching the matters in this way, I consider that the overall culpability of the defendant, bearing in mind the significant overlap between the two offences and the aggregate culpability arising from the effect of both breaches occurring at the same time (and being evidenced by a single incident) would result in a total fine of $400,000. However, having regard to the separate assessments of the culpability of the defendant in relation to the two offences, fines of $100,000 should be imposed in each matter. 39The prosecutor seeks a moiety and costs, which I propose to grant.

ORDERS 40The Court makes the following orders: Matter No IRC 355 of 2009

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 $100,000 with a moiety thereof to the prosecutor.
4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed. Matter No IRC 356 of 2009
5. The offence is proven and a verdict of guilty is entered.
6. The defendant is convicted of the offence, as charged.
7. The defendant is fined an amount of $100,000 with a moiety thereof to the prosecutor.
8. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 March 2011