Inspector Green v Camilleri Properties Pty Limited and Anor

CORAM: Wright J President; Staff J; Backman J

CATCHWORDS: Appeal - Occupational health and safety - Appeals against manifest inadequacy of sentences - Objective features of offences - Reasonable foreseeability of risk to safety - Failure to give appropriate weight to specific deterrence - Approach to maximum penalty - Gravity of offences - Respondents' capacities to pay fines - Subjective matters - Inadequacy of sentence imposed on first respondent considered - Penalty increased - Inadequacy of sentence imposed on second respondent considered - Residual discretion exercised not to interfere with penalty imposed - Current practice of the Court not to award costs in prosecution appeals considered - Leave to appeal granted - Appeal upheld in relation to first respondent - Appeal dismissed in relation to second respondent - No order as to costs.

Fines Act 1996 s 6 LEGISLATION CITED: Industrial Relations Act 1996 s 197 Occupational Health and Safety Act 2000 ss 8, 26

Beacham v Interface Manufacturing Pty Ltd (2005) 141 IR 416 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Dinsdale v The Queen (2000) 202 CLR 321 Inspector De Silva v Spicer Axle Australia Pty Ltd [2005] NSWIRComm 278 Inspector Shaw v Du Pont (Australia) Pty Ltd [2006] NSWIRComm 116 WorkCover Authority (Inspector Yeung) v Wilson (t/as Wilson's Tree Service) (2005) 143 IR 187 McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310 CASES CITED: Morrison v Waratah Engineering Pty Ltd (2005) 139 IR 186 R v Holder [1983] 3 NSWLR 245 R v Thompson; R v Houlton (2000) 49 NSWLR 383; 115 A Crim R 104 Tieman Industries Pty Limited v WorkCover Authority of New South Wales (Inspector Littley) (2005) 142 IR 201 WorkCover Authority of New South Wales v Stephensons Cranes Pty Limited (2005) 139 IR 324 WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 WorkCover Authority of New South Wales (Inspector Glass) v Flexible Packaging (Australia) Pty Ltd (2005) 144 IR 385 WorkCover Authority of New South Wales (Inspector Mansell) v Chen (2004) 137 IR 33 WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21

Appellant: Ms P McDonald of counsel Solicitors: Phillips Fox LEGAL REPRESENTATIVES: Respondents: Mr M Best of counsel Solicitors: Stacks, The Law Firm

INSPECTOR RITCHIE GREEN v CAMILLERI PROPERTIES PTY LIMITED AND ANOTHER

Application by Inspector Ritchie Green for leave to appeal and appeal against the decision of Magistrate Fleming given on 1 August 2005 in Matter No 24061/05/57

Application by Inspector Ritchie Green for leave to appeal and appeal against the decision of Magistrate Fleming given on 1 August 2005 in Matter No. 24070/05/57

1 Before the Court is an application for leave to appeal and appeal and an amended application for leave to appeal and appeal brought under s 197 of the Industrial Relations Act 1996 against the decision of Industrial Magistrate Fleming of 1 August 2005. In the proceedings below Industrial Magistrate Fleming imposed a penalty of $5,000 on the first respondent, Camilleri Properties Pty Limited, and a penalty of $2,500 on the second respondent, Andrew Camilleri, following pleas of guilty to offences under s 8(1) and ss 8(1) and 26(1), respectively, of the Occupational Health and Safety Act 2000. The first application seeks leave to appeal and appeals against the penalty imposed on the first respondent. The amended application seeks leave to appeal and appeals against the penalty imposed on the second respondent. 2 The respondents have opposed leave to appeal contending that the decision at first instance disclosed neither an improper exercise of sentencing discretion nor any basis for raising issues of public interest which might justify appellant intervention. For the reasons which we will state we disagree with the contention. We consider that her Honour's decision contains fundamental errors of law and sentencing principles which should be corrected on appeal. Factual background

3 We turn first to a brief discussion of the factual background to both offences. The first respondent operated a beach resort at Valla beach. It also owned an amenities building located on the resort premises. The second respondent was the first respondent's general manager. The first respondent employed David Frost as a maintenance worker and Shaun Byrne as a maintenance/barman at the premises. On 25 March 2004 the second respondent instructed both employees to demolish the amenities building commencing with the removal of iron roof sheeting and ancillary cladding material including sea grass matting. Mr Frost began removing the sea grass matting from the roof at a height of about 2.7 metres above ground level while Mr Byrne remained on the ground de-nailing timber. When Mr Frost moved his left foot approximately 75mm off the edge of a timber rafter onto the sea grass matting, the matting subsided and he fell off the roof about 1.6 metres onto a washing machine. 4 An investigation into the circumstances of the incident by the appellant revealed that the respondents had not provided any instruction or supervision in relation to the task to be performed. No safe work method had been developed and no risk assessment undertaken. No fall protection measures were made available such as a mobile scaffold. The respondents had not complied with the Australian Standard for the demolition of structures (AS 2601 - 2001) or with relevant clauses of the Occupational Health and Safety Regulation 2001 which dealt with stripping and demolition work, and with the assessment of risks associated with falls from heights. 5 At the time of the offences, Mr Frost had approximately 15 years of experience performing labouring tasks including carpentry and roofing work and had been employed by the first respondent from November 2003. Mr Byrne had general labouring experience which included house removals and renovations. Decision at first instance

6 In the proceedings below, her Honour enquired whether the maximum penalties were $55,000. She was informed by the appellant's legal representative that the maximum penalty for the second respondent was $55,000 and for the first respondent $550,000, although the jurisdictional limit was $55,000. Her Honour indicated that she would take into account the seriousness of the offence adding that the first respondent's business was not that of dismantling, but was the running of a tourist resort. Her Honour found that the "potential danger", because of the respondents' various failures to which they had pleaded was "significant in the circumstances". She commented on the fact that Mr Frost had suffered injuries but that the injuries did not result in an admission to hospital and were not lasting. She noted that a number of Improvement Notices that had been issued by the appellant following the incident had been complied with and that neither respondent had prior convictions. In the context of addressing specific deterrence, her Honour said, "... given the fact that the Improvement Notices have been complied with, to a large extent the issue of specific deterrence has already been addressed by that". General deterrence was considered by her Honour as important because the first respondent was a small country operation and other businesses similar in number, in size and location "... sometimes tend to take a slacker approach, that should not be the case and this message needs to be sent to others in the defendant's situation and also to other defendants". 7 Her Honour also found that the pleas of guilty indicated remorse; that the respondents supplemented Mr Frost's income following the incident and made an offer that he could return to work. Co-operation with the appellant was also taken into account and the early pleas for which her Honour said there should be a "substantial discount". In relation to the maximum penalty, her Honour said that the maximum penalty was $55,000. She then concluded that: "... when one looks at the gravity of the offence and the objective features, I reach a conclusion that it falls within the lower range of seriousness. The subjective features which have been placed before the Court of course will be taken into account, but there is always the overriding public interest in safety at work and general deterrence". 8 Finally, her Honour indicated that in view of the size and nature of the first respondent's operation that "... whilst there is no specific evidence before me as to income I take the general approach as to their capacity to pay a fine". Grounds of appeal

9 The appellants' applications list four principal grounds of appeal which, in summary, contend: (1) her Honour erred in the application of sentencing principles;

(2) her Honour erred in giving insufficient weight to objective factors;

(3) her Honour erred in giving no or insufficient weight to specific criteria of objective seriousness;

(4) the sentences were otherwise manifestly inadequate. 10 The first three grounds overlap so it is appropriate to deal with them together. Grounds 1, 2 and 3

11 The sentencing remarks in our view fail to identify with the necessary precision the objective factors which her Honour said she had taken into account. A statement globally that such features are taken into account is not sufficient without specifying which objective criteria have influenced the sentencing process, and in what way. These criteria are long established and well recognised in the jurisprudence of occupational health and safety sentencing law. They include identification of the relevant risk to safety and whether that risk to safety was reasonably foreseeable. There is no mention of this latter factor in the sentencing remarks. The conclusion we draw from this is that her Honour failed to take it into account. Given the facts in evidence before her Honour, the finding was properly available that the risk to safety, which was the risk of falling from heights, was both obvious and reasonably foreseeable. Mr Frost had no relevant experience in demolition work. He had received no instructions, no safe work method was formulated beforehand, no risk assessment was undertaken and he had no fall protection. He was also unsupervised. 12 Demolition work is a highly specialised and dangerous undertaking. This is reflected in the Regulation and in the Australian Standard, all of which set out comprehensive planning and implementation of a regime for the carrying out of demolition work so that risks are minimised. Both the Standard and the Regulation shed light on what measures and procedures should have been implemented by the respondents and the obvious importance of ensuring safety. Clause 247 of the Regulation requires that an employer must ensure that demolition work is carried out in accordance with the Standard. The Standard contains a definition of demolition in the following terms: ... the complete or partial dismantling of a building or structure by pre-planned and controlled methods or procedures. 13 This definition would appear to fit the activity being performed by the two employees, although without the added aspects of pre-planning and controlled methods or procedures. The detailed and comprehensive requirements set out in the Standard underscore the importance and necessity of ensuring the safety of workers performing demolition work. The failure of the respondents to have in place any substantial systems of work created an obvious risk to safety. 14 Her Honour also had before her material which suggested that following the incident, a revised and safer method for stripping the sea grass matting was implemented. This method could readily have been devised and implemented before Mr Frost commenced stripping the matting while on the roof of the building. 15 These factors all lead to the conclusion that the offences were serious. Her Honour had before her in evidence for her consideration, both the Regulation and the Standard. There is no indication in the sentencing remarks that her Honour took these into account. This leads us to conclude that her Honour did not have regard to them. The failure to have regard to objective criteria such as whether the risk to safety was reasonably foreseeable, as well as whether the risk was obvious, may well have facilitated her Honour falling into error when she concluded that the offences were in the lower range of seriousness. As was observed in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [81] to [82], foreseeability is relevant to the assessment of the seriousness of an offence and the existence of a foreseeable risk to safety will necessarily result in the offence being more serious. 16 Her Honour's finding on specific deterrence, in our view, also demonstrates error. Her Honour appeared to give little or no weight to this particular factor when she found that the issue had been addressed by compliance with various Improvement Notices sent by the appellant following the incident. This principle is, however, of much broader application than the immediate circumstances surrounding an offence and it has particular significance in occupational health and safety prosecutions. The principle has been acknowledged in many leading authorities in this jurisdiction, most notably in Capral Aluminium Ltd where the Full Bench said (at [77]): In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The court may form such a view as a result of the rehabilitation of the offender: R v Corner (Court of Criminal Appeal, 19 December 1997, unreported) or because the offender will not have the opportunity to commit a similar offence in the future: R v Macdonell (Court of Criminal Appeal, 8 December 1995, unreported). However, we think it unlikely that the weight to be attached to specific deterrence could be reduced to zero in case of offences under the Act. At least where the offender continues to be an employer, risks to the safety of its employees or contractors may exist or be possible. Breaches of the duties imposed by the Act may occur both by commission and omission. Employers are required to maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. They must adopt an approach to safety which is pro-active and not merely reactive: WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 at 85. In view of the scope of these obligations, 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. This is particularly so where the offender conducts a large enterprise which involves inherent risks to safety: see WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Aust) Pty Ltd [2000] NSWIRComm 53 at [46]. 17 Her Honour did not, in the sentencing remarks, take into account the fact that the first respondent continues to be an employer and operate its business, and that the second respondent continues as its general manager. This evidence suggests that specific deterrence was relevant to her Honour's consideration and should have been taken into account. 18 A further error which we have identified in the sentencing remarks concerns her Honour's treatment of the maximum penalty available against the first respondent. Her Honour was informed by the appellant at the commencement of the proceedings that the maximum penalty against the first respondent was $550,000, but that the jurisdictional limit was $55,000. Nevertheless, in our view, her Honour approached the sentence of the first respondent as if the maximum penalty was $55,000. This is an error common to a number of decisions of Industrial Magistrates which has necessitated correction in this Court's appellate jurisdiction: see, for example, WorkCover Authority of New South Wales v Stephensons Cranes Pty Ltd (2005) 139 IR 324; WorkCover Authority of New South Wales (Inspector Glass) v Flexible Packaging (Australia) Pty Ltd (2005) 144 IR 385; Beacham v Interface Manufacturing Pty Ltd (2005) 141 IR 416; Inspector De Silva v Spicer Axle Australia Pty Ltd [2005] NSWIRComm 278. 19 Her Honour's somewhat cryptic comment that, "[i]n relation to this jurisdiction, the maximum penalty in each case is $55,000", without further elucidation or mention of the jurisdictional limit leads us to conclude that she erroneously approached the sentence of the first respondent by applying the lower statutory maximum. 20 A further error which we perceive in the sentencing remarks concerns her Honour's treatment of the gravity of the offence. Her Honour appears to have placed reliance on what she considered were minor injuries suffered by Mr Frost and his speedy recovery. Although her Honour adds in this context, that, "the potential danger because of the lack of those measures (a reference to the respondent's failures to which pleas of guilty had been entered) was significant in the circumstances", she later nominates the gravity of the offence, together with unspecified objective features to explain her conclusion that the offences fell within the lower range of seriousness. As has been emphasised many times in this jurisdiction, it is not the actual injuries sustained as a result of a breach of the legislation that are determinative of the seriousness or gravity of an offence, or of the level of penalty, but the likely consequences of such a breach. A breach which may be assessed as having the potential to cause serious injury or injuries may therefore be assessed as more serious than a breach where the potential for serious injury is less likely: see, for example, WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21. 21 Her Honour also appeared to take into account the respondents' capacities to pay fines, notwithstanding that there was no evidence placed before her to enable any assessment of their respective financial means. Section 6 of the Fines Act requires a court, in the exercise of its discretion to fix the amount of any fine, to give consideration to the defendant's means to pay the fine. In doing so, the section requires the court to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and

(b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount. Plainly, s 6 provides the court with an obligation to consider the defendant's means in a practical and commonsense way. Nevertheless, the consideration must not be, in proceedings under the Occupational Health and Safety Act , ritualistic or token, so that where a defendant relies on the provisions of s 6 of the Fines Act in such proceedings to temper the amount of any fine to be imposed, the defendant bears the onus of placing appropriate evidence before the court to enable it to give proper consideration to the exercise of its sentencing discretion.

22 The defendant must also satisfy the court, on the balance of probabilities, of the cogency of the evidence and its relevance to the fixing of the fine: WorkCover Authority of New South Wales (Inspector Mansell) v Chen (2004) 137 IR 33 at 56 (para [51]); McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310 at 314 - 315 and WorkCover Authority (Inspector Yeung) v Wilson (t/as Wilson's Tree Service) (2005) 143 IR 187 at 215 (para [108]). It follows that the sentencing magistrate, or judge, in occupational health and safety matters, should also explicitly indicate the material upon which she or he has acted.

23 Her Honour, while acknowledging that there was no specific evidence before her as to the respondents' financial means said that she took a "... general approach as to their capacity to pay a fine". Although it is not entirely clear what her Honour meant by that remark, to the extent that her Honour purported to take into account the respondents' respective financial circumstances, we consider that in the absence of any evidence on that issue, her Honour fell into error. 24 The appellant submitted that the sentencing remarks disclosed error because her Honour accorded too much importance to the subjective factors raised by the respondents. We are unable to agree with this submission. Her Honour clearly stated that considerations such as the public interest in safety at work and the need for general deterrence overrode the subjective features placed before the Court. Ground 4

25 The fourth ground of appeal relied upon by the appellant does not depend upon the identification of any specific error in the sentencing process to warrant the conclusion that the sentences were inadequate: Dinsdale v The Queen (2000) 202 CLR 321 at 325; WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 at 457; Tieman Industries Pty Ltd v WorkCover Authority (NSW) (Inspector Littley) (2005) 142 IR 201 at 202. 26 As we have found, however, her Honour's sentencing remarks disclose a number of errors of law and principle which would and should have increased the assessment of the objective seriousness of the offences and thus resulted in the imposition of higher penalties. 27 In conclusion, given the manifest inadequacy of the penalties at first instance and the errors upon which they were based, we have determined to set aside the sentence of the first respondent and assess the appropriate penalty to be imposed taking into account the objective seriousness of the offence and the subjective features. In doing so, we intend to adopt a conservative approach in keeping with the principle of double jeopardy in relation to prosecution appeals, recently discussed in Morrison v Waratah Engineering Pty Ltd (2005) 139 IR 186 at [16]. 28 In relation to the plea of guilty which was entered at an early stage of the proceedings by the first respondent, we consider it appropriate to award a discount of 25 per cent in accordance with the practice recommended in R v Thompson; R v Houlton (2000) 49 NSWLR 383; 115 A Crim R 104. 29 In relation to the second respondent, we have decided, in the exercise of our residual discretion, not to interfere with the penalty imposed at first instance: R v Holder [1983] 3 NSWLR 245 at 255. Costs 30 As to the issue of costs, we note that recently, in Inspector Shaw v Du Pont (Australia) Pty Ltd [2006] NSWIRComm 116 at [22] to [23], the Full Bench referred to the current practice of the Court on appeal not to award costs in prosecution appeals where the prosecution has been successful in contending, for example, that the decision at first instance was in error because of inadequacy of penalty but added that: "[B]ecause of the extensive jurisprudence that now exists in the area as to such prosecution appeals, the time has come to consider whether this situation as to costs should continue. The Full Bench thus gives notice that the approach as to costs may need to be reconsidered in future proceedings although there will be no costs order in these proceedings".

31 We agree with those observations. There will therefore be no costs order in these proceedings, although in similar proceedings in the future an unsuccessful respondent is likely to be required to pay the appellant's costs of the appeal.

(3) the penalty at first instance is set aside and the respondent is fined $16,500 with a moiety thereof to be paid to the appellant;

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