Inspector Green v Big River Timbers Pty Limited; Inspector Green v Big River Timbers

Industrial Relations Commission (NSW)|2006-07-01|Before: Wright J, Walton J, Staff J, Ms P, Ms J

CITATION: Inspector Green v Big River Timbers Pty Limited; Inspector Green v Big River Timbers (Veneer) Pty Limited [2006] NSWIRComm 279

APPELLANT Inspector Ritchie Green

PARTIES: FIRST RESPONDENT Big River Timbers Pty Limited

CORAM: Wright J President; Walton J Vice-President; Staff J

CATCHWORDS: Appeal - Occupational health & safety - Application for leave to appeal and appeal from a decision of the Chief Industrial Magistrate - Prosecution - Guilty plea - Whether penalty imposed by Local Court was adequate - Leave to appeal granted - Penalty manifestly inadequate - Principles of totality discussed - Appeal upheld - Penalty imposed at first instance set aside - Respondent re-sentenced - No order as to costs

LEGISLATION CITED: Industrial Relations Act 1996 Occupational Health and Safety Act 2000

Camilleri's Stock Feeds Pty Limited v Environmental Protection Authority (1993) 32 NSWLR 683 Capral Aluminium v Workcover Authority of New South Wales (2000) 49 NSWLR 610 Haynes v C I & D Manufacturing Pty Limited (1995) 60 IR 149 House v King (1936) 55 CLR 499 Inspector Barry Childs v Kirk Group Holdings Pty Limited & Anor (2005) 137 IR 462 Inspector Bestre v T & Y Pty Ltd [2005] NSWIRComm 392 Inspector Green (WorkCover) v Metropolitan Administrative Services Pty Ltd [2005] NSWIRComm 12 Inspector Jones v Challita and Anor [2006] NSWIRComm 207 Inspector Sharpin v A Team Concrete (Aust) Pty Ltd & Ors [2004] NSWIRComm 182 CASES CITED: Inspector Yeung v Howie Herring & Forsyth Pty Limited & Anor [2005] NSWIRComm 266 Markarian v The Queen (2005) 215 ALR 213 Morrison v Powercoal Pty Ltd & Anor (No 3) (2005) 147 IR 117 O'Sullivan v The Crown in the Right of the State of New South Wales (Department of Education and Training) (2003) 128 IR 158 Pearce v The Queen (1998) 194 CLR 610 Postiglione v The Queen (1997) 189 CLR 295 Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority of New South Wales v Big River Timbers Pty Limited and anor CIM No 20101600/05/2, 20101933/05/2 and 20101941/05/2 WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Limited (2003) 127 IR 60 WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 WorkCover Authority of New South Wales (Insp Robert Stobo) v State Rail Authority of New South Wales (2002) 115 IR 130

APPELLANT Ms P McDonald of counsel Solicitor: Mr R Higgins Carroll & O'Dea LEGAL REPRESENTATIVES: FIRST AND SECOND RESPONDENTS Mr A Britt of counsel Solicitor: Ms J Williams Timber Trade Industrial Association

CORAM: WRIGHT J, President WALTON J, Vice-President STAFF J

INSPECTOR RITCHIE GREEN v BIG RIVER TIMBERS PTY LIMITED

Application by WorkCover Authority of New South Wales for leave to appeal and appeal against a decision of Chief Industrial Magistrate Hart given on 8 July 2005 in matter No 20101941/05/2

INSPECTOR RITCHIE GREEN v BIG RIVER TIMBERS (VENEER) PTY LIMITED

Application by WorkCover Authority of New South Wales for leave to appeal and appeal against a decision of Chief Industrial Magistrate Hart given on 8 July 2005 in matter Nos 20101600/05/2 and 20101933/05/2

1 Pursuant to s 105(3) of the Occupational Health and Safety Act 2000 ("OHS Act") and s 197 of the Industrial Relations Act 1996, Inspector Green ("the appellant") sought leave to appeal and, subject to leave being granted, appeals against the penalty imposed by Hart CIM on 8 July 2005: WorkCover Authority of New South Wales v Big River Timbers Pty Limited and anor CIM No 20101600/05/2, 20101933/05/2 and 20101941/05/2. The thrust of the appeal is that the penalties imposed by his Honour were manifestly inadequate. 2 The facts may be briefly recounted. Big River Timber Pty Limited ("the first respondent") and Big River Timbers (Veneer) Pty Limited ("the second respondent") were involved in the manufacture of plywood and flooring at premises at Junction Hill, New South Wales. The first respondent controlled the business activities and owned the relevant plant; the second respondent was the operating an employment company for the Veneer and Engineering divisions for the particular employee affected by the incident in this matter. 3 On 13 March 2003, Mr Craig Cole, an employee of the first respondent, received multiple crush injuries to his right hand when it was crushed between a steel parallel flange channel and a steel wheel of a travelling overhead gantry. The first respondent was charged pursuant to s 8(1) of the OHS Act, the second respondent pursuant to s 8(2) and s 10(2). Both respondents pleaded guilty. 4 Agreed statements of facts were exhibited in relation to all three charges. 5 There were a number of issues raised by the appellant. We propose to focus only upon those aspects of the appeal where the appellant has made good its appeal (in this respect we note that the respondent made some concessions, in our view entirely correctly). We consider that each such issue identified warrants the granting of leave to appeal. 6 First, we consider that his Honour misapplied the principle of totality. His Honour treated the two corporate defendants in these matters as one entity for the purpose of sentencing because they were "interlocked" (by which we understand him to mean the respondents were closely related corporate entities having a common governance and operations). 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.

[38] In accordance with Pearce , we must first consider the appropriate penalty for each offence, assessed separately. 9 See also the decision in Inspector Barry Childs v Kirk Group Holdings Pty Limited & Anor (2005) 137 IR 462 per Walton J, Vice-President, where at [62] his Honour also refers to the decisions in O'Sullivan v The Crown in the Right of the State of New South Wales (Department of Education and Training) (2003) 128 IR 158 and Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326. 10 However, the crux of the appellant's complaint is his Honour's application of the totality principle where there are two separate defendants. The appellant seeks to rely, in this resepect, on the decision in WorkCover Authority of New South Wales v McDonald's Australia Limited. 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. The two s 8(2) offences referred to by his Honour were committed by two different defendants; this necessarily precludes the principle of totality. Even if his Honour had purported to apply the principle to the two offences committed by the respondent (that is, under ss 8 (2) and 94) the ingredient of commonality was lacking.

14 The present case is analogous to that in Inspector Sharpin v A Team Concrete where, at [110], Staff J held: [110] I prefer the approach adopted by Walton J Vice-President in McDonald's Australia Limited. In my view, the principle of totality does not require the three defendants to be treated as effectively one entity facing offences under ss 8(1), 8(2), 10(2) and 26(1) of the Act for the purposes of the assessment of penalty and therefore the principle of totality should not be applied in this matter. Rather, there should be a proper weighing of the respective culpabilities of the defendants and, in this regard, attention should be paid in properly measuring the actual culpability of each defendant in relation to the detriment to safety involved in the accident. Where there are overlapping responsibilities, then the Court will ensure that there occurs a proper apportioning of responsibility by the respective defendants. 15 Importantly, his Honour also went on to find: [111] However, a Full Bench of this Court held in Warman at 341 that where defendants (not being co-offenders) are prosecuted under different sections of the Act, the Court should, nonetheless, adopt "an approach to sentencing which shows consistency and not disparity in punishment in the same way as discussed by Mason J in Lowe " where common factual circumstances exist giving rise to the charges. It should be noted that the Court considered parity in Warman in the context of a labour hire company and the defendant who utilised that labour.

[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." [113] I propose to apply the principle of parity or equal justice in the assessment of penalty in these matters particularly in respect of the offences brought against the third defendant. 16 In the present case, it would seem that while totality has no role to play (except to the extent that it should be applied to the two offences with which the second respondent is charged), parity must nevertheless be considered. 17 As Walton J, Vice-President held at [60] in Inspector Barry Childs v Kirk Group Holdings Pty Limited & Anor: [60] In the present matter, the factual circumstances giving rise to the charges against the Company and Mr Kirk are identical. In those circumstances, it is appropriate that I compare the respective sentences imposed on each defendant to ensure the principle of parity is not violated, making due allowance for relevant differences in their levels of culpability. The issue of parity was discussed recently in Inspector Gregory Maddaford v Graham Gerard Coleman & Anor [2004] NSWIRComm 317 where a Full Bench held (at [110] - [111]):

"Of fundamental importance to the administration of justice is a consideration of parity when determining sentence: Griffiths v The Queen (1997) 194 CLR 293 at 326-327; Signato v The Queen (1998) 194 CLR 656 at 670; Capral Aluminium at [62] - [65]; Inspector Ankucic v McDonalds at 434; P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102.

The principle of parity was described in the joint judgment of Dawson and Gaudron JJ in Postiglione v The Queen (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 their 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." 18 We do not consider that on the facts this matter may be distinguished from those applying in McDonald's or A Team Concrete. It was not open on the facts of this case for his Honour to sentence as if he had one defendant before him. 19 However, we consider the error is more profound. We consider that it is inconsistent with the principle of totality to effectively treat two corporate defendants, even when facing similar charges arising out of the same sub-stratum of facts as a common entity, for the purposes of sentencing, no matter how close their corporate relationship (in terms of government, operations or employment). 20 In coming to this view we adopt the opinions expressed by Walton J in McDonald's noting that his Honour then discusses and applies the judgment of McHugh J in Postiglione v The Queen at 307 - 308. 21 We note that his Honour in McDonald's referred to the judgment of the Full Bench in Haynes v C I & D Manufacturing Pty Limited (1995) 60 IR 149. In this respect his Honour considered the circumstances of this case as unusual, and proceeded to distinguish it. However, we were invited by the appellant to conclude that the judgment in Haynes v C I & D Manufacturing Pty Limited was wrong on the issue of totality and we propose to do so in order to ensure that the law in this area is clear. 22 It is not permissible, under the principle of totality, and for the reasons we have discussed, to treat two corporate respondents (distinguished by their separate incorporation) as a single entity for the purpose of sentencing and to the extent that the Full Bench in C I & D Manufacturing adopted a different approach as a matter of law and principle we consider that it is wrong. Plainly, any first instance judgments which have approached the principle of sentencing in like manner would involve error. 23 Secondly, we consider that the failure of his Honour to refer to and deal with the issues of specific deterrence was an error. We agree with the appellant that this represents an error as contemplated in House v King (1936) 55 CLR 499. We refer, in this respect, to judgment of the Full Bench in Capral Aluminium v Workcover Authority of New South Wales (2000) 49 NSWLR 610 at [74], as follows: [74] We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Ltd accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both 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.

See also Inspector Jones v Challita and Anor [2006] NSWIRComm 207. 24 It is, therefore, an error not to identify the particular facts which are said to warrant a departure from the principle that specific deterrence should be taken into account in sentencing. The mere good corporate record of a defendant does not constitute a sufficient basis for such a departure. 25 It is well accepted that the fact that a defendant was a safety conscious employer and took steps both before and after the incident to ensure the safety of its employees will be considered as factors in favour of the defendant in sentencing. But this does not displace the obligation falling upon the Court to consider the question of specific deterrence. In WorkCover Authority of New South Wales (Insp Robert Stobo) v State Rail Authority of New South Wales (2002) 115 IR 130, Walton J, Vice-President, considered the issue of deterrence and cited the Full Bench's comments in Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) at [73] - [79]. His Honour then applied the principle of deterrence in the following way at [56] - [61]: [56] It should be firstly recognised that the Court in Capral Aluminium (at [55] and [74]) rejected a contention by the then appellant that considerably less weight should have been given to deterrence due to its attempts, both before and after the incident, to ensure the safety of workers (including the provision of safety equipment) and the fact that the employer was a safety conscious employer. The Court found that both general and personal or specific deterrence were matters which should normally play a role in sentencing under the Act and that, although there are exceptional cases requiring a departure from that approach, they are rare (at [74]). [57] Further, the Court considered that it was unlikely that the weight to be attached to specific deterrence could be reduced to zero in cases of offences under the Act. The primary feature that controlled the weight to be given to specific deterrence was the "propensity to re-offend", noting that the objective of specific deterrence is to deter the particular offender from repeating the offence (at [76] - [77]). The Court considered that for specific deterrence to be disregarded in the sentencing process, the offender would need to demonstrate the risk of re-offending was low or non-existent; be that because of demonstrated rehabilitation or because the offender would not have the opportunity to commit a similar offence in the future (at [77]). [58] Where the offender continued to be an employer, the risk to safety of its employees or contractors may exist or be possible. Thus, the Court came to the view that in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future by specific deterrence. [59] It follows, in my view, that notwithstanding the somewhat strident steps taken by the defendant to ensure the occupational health and safety of its employees (to which I will return in relation to the subjective features of this matter), the penalty in this matter should reflect the need for specific deterrence. I note, in this respect, that the defendant continues to operate and maintain rail vehicles, albeit of a different type to those operated prior to the restructuring of its operations. Further, the evidence of both Mr May and Mr Henry make it clear that, whilst the defendant has in place comprehensive inspection systems on its passenger trains and has in place substantial training regimes for its employees, the defendant continues to operate as an employer of a significant number of people within this State, some of which are engaged in maintenance work on rail vehicles. The Court is not satisfied that there is no potential for the defendant to re-offend: Capral Aluminium at [77], R v MacDonnell (unreported, Court of Criminal Appeal, 8 December 1995). The matter does not fall within the class of exceptional cases identified in Capral Aluminium where specific deterrence is inappropriate. [60] However, I consider, in accordance with the decision in Capral Aluminium (at [76]), any aspect of penalty providing for specific deterrence in this matter should feature less prominently than would otherwise have been the case, due to the significant re-evaluation of health and safety systems that have now been adopted by the defendant and, more broadly, the extensive restructuring of the defendant's operations. I am satisfied that the changes have resulted in a significantly lower risk of the defendant re-offending. 26 We accept that as the proper approach to this question, adopting as it does the principle established in Capral Aluminium. 27 Thirdly, we also agree that his Honour failed to give sufficient weight to the foreseeability of the risk in assessing the objective seriousness of the offence. 28 More generally, we are of the view that the sentences imposed were manifestly inadequate.

29 We also accept his Honour was in error in his view of the maximum penalty facing both respondents - in both cases the maximum penalty is $550,000. His Honour found that the total penalty that should be imposed was $28,000. His Honour reduced by a discount of 35 per cent this amount, leaving a total fine of $18,200. Each defendant was ordered to pay a fine of $9,100.

30 We, therefore, consider it necessary to grant leave to appeal and uphold the appeal.

31 Before re-sentencing the respondents we note that an issue was raised as to the application of the decision of the High Court in Markarian v The Queen (2005) 215 ALR 213. The appellant submitted that his Honour had adopted a two stage approach by reducing the penalty by 10 per cent to reflect subjective factors. In taking this approach, it was contended that his Honour did not follow the approach described by the joint judgment in Markarian or adopted by Boland J in Inspector Yeung v Howie Herring & Forsyth Pty Limited & Anor [2005] NSWIRComm 266. We do not consider this appeal is a suitable vehicle to consider this question as even if the appellant's contentions are correct as a matter of law, it would make no material difference to the outcome of the appeal. 32 In sentencing the respondents we have had regard to the principle of double jeopardy and applied the now well-established approach to re-sentencing on appeal: see, for example, WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Limited (2003) 127 IR 60. 33 We also note there is no challenge to the level of discount allowed the respondents at first instance, for subjective factors, including the discount for the plea of guilty. We will proceed upon that basis. 34 In these circumstances, after taking into account the objective factors and taking into account the principle of double jeopardy, the appropriate penalty for the offence is $20,000 in each case (we have thereby fixed the same penalty for each respondent). 35 In the event that the appeal was successful, Mr A Britt, counsel for the respondents, submitted that the respondents should not be the subject of an adverse costs order for the following reasons: "(a) The Respondents did not lead his Honour into error; (b) The Respondents have co-operated with the WorkCover authority both at first instance and on appeal; (c) The nature of the appeal both in respect to the application of the High Court judgment in Makarian v R and whether the Court may consider the corporate structure of the Respondents has utility beyond the immediate parties and is in the nature of a test case; and (d) The Court has a discretion to award costs in such appeals and in a number of such cases costs have not been awarded (see Inspector Downie v Menzies Property Services Pty Limited [2004] NSWIRComm 259; WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 100 IR 64 and Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31) or made a discounted order for costs (see Barber v Gundagai Shire Council (or alternatively Gundagai Council) [2002] NSWIRComm 243)." 36 We do not consider that any of these factors, in view of our reasons for decision, represent a proper basis not to award costs to the appellant and we do so. ORDERS 37 We therefore grant leave to appeal and uphold the appeal, set aside the penalty imposed at first instance, and order the respondents each to pay a penalty of $20,000, with a moiety to the appellant. The respondents are also ordered to pay the appellant's costs of the appeal, as agreed or assessed.

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