Inspector James v South Coast Excavators Pty Ltd

Relevant Principles 8In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s 8(1) and s 26(1) of the Occupational Health and Safety Act 2000 with ss 21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The Court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 9Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 10Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; 115 ACrimR 104 , correctly, given the consideration in Markarian , recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. Proper regard is to be had to express legislative provisions and to the relevant statutory regime ( Markarian at [27]). 11The object of the Act is to protect employees from risk to safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the workplace. In Inspector Morgenthal v Houghton [2010] NSWIRComm 192, the Court observed at [9]: In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act ...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.' 12Of relevance particularly is the effect of s 21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the Court is to take into account in any sentencing hearing and states, inter alia : . . . (2) Aggravating factors . . . (d) the offender has a record of previous convictions, ... (g) the injury, emotional harm, loss or damage caused by the offence was substantial, . . . (3) Mitigating factors . . . (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, ... (k) a plea of guilty by the offender (as provided by section 22) (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23) ...

Consideration 13In a consideration as to penalty, the Court assesses the objective seriousness of the offence or, as has been said, "the nature and quality of the offence". The Full Bench commented in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474): ...in our view, it 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"... And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk, In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected... 14The individual defendant, Jai Ram Charan, was an experienced excavator who ran a successful excavation business in Fiji, first for his father and then for himself. When he migrated to Australia in 1994, he obtained the necessary qualification to do work as an excavator in Australia. After working for others he established his own excavation business in 1999 which he now operates under the name Regal Excavators Pty Ltd. In 2007, he established an associated corporation called Online Concrete Sawing Pty Ltd which, in 2009, became known as South Coast Excavation Pty Ltd - the corporate defendant. It operated a water cart for roadworks. 15Mr Charan, as the Director, was also the controlling mind of the corporate defendant and, at present, the sole shareholder of the corporation. He is also a defendant to a charge under the Act in his role as Director. 16The defendant corporation was, on the relevant date, the provider of the water carrier with a driver. It was used to water down dust arising from the roadworks, where a median strip was being taken out to allow for a right hand turning lane, on a busy carriageway. On the relevant date the individual defendant, on behalf of the corporation, sent the employee, Mr Finnemore, to the RTA site to drive the water cart. However, as it had been raining, the services of the water cart were not necessary. The RTA supervisor then required Mr Finnemore to perform general labouring duties on the site. Mr Finnemore, without any training or instruction particular to the task of labouring on site, agreed. 17The defendant corporation had prepared, prior to the incident, a work method statement which outlined the duties of the water truck driver and included the following: If the operator requires reversing the water cart he must ensure that there is a spotter on board with the correct PPE such as high visibility vest, safety enclosed shoes/ boots, glasses, hard hat and radio for communication if required. The work method statement, therefore, only directed itself to the need for a "spotter" if reversing the water cart. No spotter was sent with Mr Finnemore as the driver. The contract with the RTA, as head contractor on site, did not mention any traffic control responsibilities would be held by the corporation. However, the Act requires Mr Charan, through his corporation as the employer, to provide a safe working environment for employees. 18Mr Finnemore was on the site without supervision. He was not instructed to not perform duties apart from driving the water cart. I accept Mr Charan orally instructed Mr Finnemore as to occupational, health and safety standards, although there were no complete safe working modules prior to the incident produced by the defendant company. However, Mr Finnemore, when on site on the relevant date, accepted the authority of the RTA and performed labouring work for the RTA. It was working in this capacity, without supervision by his employer, that he was exposed to the risk from the uncontrolled movement of heavy vehicles on site. The risk became a reality when he suffered fatal injuries when struck by a moving truck with trailer. 19The corporation did not prepare a risk assessment of the site, did not warn Mr Finnemore about the necessity to work outside the three metre exclusion zone when working around moving vehicles and did not provide a spotter when an employee was required to work around moving vehicles. However, it is difficult to accept the failure to give such warnings makes this a more serious offence when it was not in the contemplation of the defendant corporation or its director that Mr Finnemore would perform labouring duties. His job was to drive a water cart which generally would have performed its work inside the median strip and away from the trucks - although close to the working excavator. However, the Act requires the employer to ensure safe working for every employee through training and instruction. This employee was required to perform work for which he was not trained. He, therefore, was not aware of the need to work three metres away from moving vehicles on the site. There was a systemic failure by others on site in the failure to provide a spotter to co-ordinate movement of employees on site given there were moving vehicles on site. There was also a failure to provide between the contractors a communication system. These failures led to a failure to alert a driver to Mr Finnemore's whereabouts. The act of both defendants that contributed to the risk, which became a reality, was the failure to supervise Mr Finnemore on site and the failure to instruct him as to the limitation of his duties. 20However, in the circumstance, I see no foreseeable element to this offence. It was not foreseeable that the RTA would require from an employee of a sub-contractor the performance of labouring duties under their direction. 21The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [71]-[77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: ... 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. The corporation still accepts RTA work although has not recently won any tenders. Specific deterrence must be an element in the offence of each defendant. 22As to general deterrence a call must go out to all involved in the construction and maintenance of our roads, an industry where there are often many sub-contractors providing employees to work on the one worksite, that planned safe working modules must be adhered to. In this matter, the failure of others to have on site a spotter and a site related internal communication system and the failure of the defendants to properly supervise and instruct an employee brought about a failure to ensure the safety of a young man. The defendant corporation, through instruction from the RTA, had recognised and identified safe procedures for the risk associated with any site on which there were moving vehicles together with employees on foot. The defendant employer adopted and was trained in RTA safe working methods. Had those methods, designed to meet the associated risks identified, been heeded and the procedures implemented, this serious breach could have been avoided. There is an obligation on sub-contractors to refuse to work until all the recognised safety features are in place at the work sites to which it sends its employees. Each defendant must be active to ensure safe work methods are followed. 23After another incident involving the movement of vehicles on a roadwork site (where the RTA did not face prosecution), the Court commented on the safety procedures needed where there was a multi-disciplinary site with multiple sub-contractors with employees on the worksite in Inspector Andrew Rowe v Eagle Eye Traffic Services Aust Pty Ltd [2010] NSWIRComm 31 at [27] that: ... Co-ordination must be a priority on sites with multi sub-contractors. I accept, in accordance with modern industrial practice, it may be a sensible industrial decision for an authority like the RTA to contract out the upgrade and maintenance of its roads to specialist sub-contractors with specific skills. Hence, on this site, we had the Planner, the Asphalter and the Road Traffic Controller. Such contracting out, however, must ensure there is a rigorous planning instruction and training of all employees brought onto a multi-disciplinary worksite. Job specifications must be clear and each defendant must ensure there is, on the worksite, full compliance with its safety obligations. In this circumstance, while each party could present safe work models and plans and there were site safety meetings, there was a failure to co-ordinate each sub-contractor's operation. ... This incident is but another reminder of the need to co-ordinate activities on such dangerous worksites. 24In this circumstance, the risk to safety became reality. The words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 at (5) I find apposite: The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from the breach and its foreseeability are clearly relevant... 25There was, I accept, a significant contribution to the risk from the RTA given its failure as the head contractor to ensure control of movement of traffic off this worksite and the failure to ensure Mr Finnemore, working under the control of the RTA, was not working within three metres of moving vehicles on the site. I also accept there was contribution from Terra Civil Pty Ltd - the corporation which provided the vehicles, which vehicles, under the work method statement, should not have exited from the site without ensuring persons working on foot on site were not within three metres of the moving vehicle. 26The defendants have accepted that each should have been more vigilant. Mr Charan, on behalf of himself and his company, opines he should have: a) personally carr(ied) out, or ensur(ed) that the RTA carried out, a comprehensive risk assessment at the Epping Road site; and b) ensur(ed) that Finnemore only carried out water cart duties and did not work in the vicinity of moving plant. 27Mr Charan, on behalf of the corporate defendant, has revealed that since the incident: a) it is part of each employee's induction and ongoing training that they are orally advised not to work within 3 metres of moving vehicles; b) a physical risk assessment is carried out at each new work site or a meeting is held with the main contractor to ensure that risks have been assessed; and c) the written procedures of South Coast have been substantially improved. 28Each defendant is entitled to the benefit of subjective factors that tend to mitigate the objective seriousness of the offence. It is also necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A(1) of the Crimes (Sentencing Procedure) Act 1999 relevant to the defendant. As was said in R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168 at [56]: ... it 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). Ultimately, all of the above factors must be considered as part of "a complex of inter-related considerations" ( R v Gallagher (1991) 23 NSWLR 220 at (228)). 29In Alcatel Australia Limited v WorkCover Authority (Inspector Clyant) (1996) 70 IR 99, the Full Bench (Hungerford, Marks and Schmidt JJ) observed at (106): We accept that there are good policy reasons for the encouragement of early pleas of guilty and the giving of assistance to the WorkCover Authority in its investigation of suspected breaches of the OH&S Act. ... I accept that both defendants entered early pleas. In accordance with the principles of R v Thomson; R v Houlton, I accept there is a utilitarian value to each defendant's early plea of guilty. I allow in the circumstances a 25 per cent discount for the utilitarian value of each plea. 30The principle of parity is relevant in this consideration in the circumstances. The Court must weigh up the seriousness of the risk and the different circumstance of each defendant. I have given consideration to the defendants' contribution to the risk. There must also be equal justice between the parties. The parity principle was stated by Dawson and Gaudron JJ in Postiglione v R (1997) 189 CLR 295 (at 301-303) 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 me [12]. 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 [13]. 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 [14], 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" [15]. 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. ... 31In this matter, four defendants have been prosecuted for offences under the Act arising from the same incident. It is appropriate, therefore, for the Court to adopt the approach taken by the Full Bench in Warman International Ltd v WorkCover Authority of New South Wales (Inspector Ankucic) (1998) 80 IR 326 (at 341), where the Full Bench referred to the principles stated by Mason J in Lowe v R (1984) 154 CLR 606 (at 610) 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. 32Given the circumstance where the corporate defendant's employee was not performing work for which he was trained and where the RTA had assumed authority to direct him, I find each defendant's liability less than that of the RTA and Terra Civil Pty Ltd. 33Of relevance particularly is the effect of s 21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing. 34There is lay evidence in affidavit form assuring the Court of the fine community work performed by the individual defendant for his Hindu community. 35He expends time and the endeavours of the defendant corporation doing building and renovation work for a local temple. The corporate defendant therefore has demonstrated a good community involvement. 36I accept the corporation is a good industrial citizen. It has been operating for three years with no prior convictions. The maximum penalty for a breach of the Act by a corporation is $550,000. 37The maximum penalty for an individual defendant is $55,000. Mr Charan has revealed he could not identify any family members of Mr Finnemore in order to personally convey to them his contrition and to ensure that his remorse was expressed in a practical way. However, he relies upon his activities in the Hindu community to reveal he is, personally and corporately, a good industrial citizen and a person of good character. References, I accept, give proof to that assertion. 38I accept each defendant's expression of remorse and contrition. However, this was a serious offence where an employee, unsupervised on site, lost his life because of the risk to which he was exposed and the failure of the defendants to properly supervise and instruct Mr Finnemore. 39The Court, however, has some difficulty with a number of applications made for consideration effecting penalty for these serious offences. The first application is for consideration of the assertion each is of limited means. That is, each defendant pleads impecuniosity. 40Section 6 of the Fines Act 1996 provides: In the exercise by a court of a discretion to fix the amount of any fine, the court is required 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. 41Such a consideration was addressed in WorkCover Authority of NSW (Inspector Farrell) v David Carl Schrader [2002] NSWIRComm 25; (2002) 112 IR 284 by Walton J, Vice-President at [83]-[84]: [83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at [50]): It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200 - 201. [84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at [81] - [82]): ... 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, Warman International (80 IR at p339); WorkCover Authority of New South Wales (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at p333; and Profab Industries (49 NSWLR at p714, 100 IR at p76). 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 pp209 - 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 s 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. ... 42The defendant corporation, South Coast Excavators, has provided information relating to its annual turnover between 2007 and 2009. The corporation reports net losses of $367 and $21,892 in 2007 and 2008 respectively, and net profits of $8,391 and $11,959 in 2009 and 2010 respectively. Its highest annual corporate income in that period was in the 2009 financial year and amounted to $122,394. The defendant corporation's financial returns also reveal there were shareholder loans in 2008 of $30,034.23; in 2009 of $17,572 and in 2010 of $59,696. The profits and losses were, from an examination of the returns, struck after the allocation of shareholder loans. 43Mr Charan affirmed his taxable income was $17,349 and $16,761 for 2008 and 2009 respectively, and his wife's taxable income was $7,534 and $16,705 for 2008 and 2009 respectively. Mr Charan in his affidavit swore he was the sole shareholder of the defendant corporation. 44However, it was also revealed (through an examination of both defendants' financial returns) that the individual defendant operated not only a water cart business with the RTA but also a related excavation business conducted under the name of Regal Excavators Pty Ltd. Documentation from the associated corporation, Regal Excavators, was required. 45It is submitted by both defendants, based on the documentation provided, that: Regal had average sales in the years 2006 to 2010 of approximately $488,615; had an average profit in the years 2006 to 2010 of approximately $71,764. As at 30 June 2010, Regal had net assets of $276,631. The average annual combined income of Mr J R Charan and Sushi Lata Ram (his wife) would be in the vicinity of $32,000. Mr J R Charan and Sushi Lata Ram have no assets. The effect of the above circumstances, it was submitted, is that the corporate defendant can still be characterised as a small business with a limited capacity to pay any fine. Therefore, the fine that otherwise would be imposed on the corporate defendant should be reduced to take into account its financial position. 46It is further submitted, given the individual defendant has no assets at all, that the Court should give consideration under s 10A of the Crimes (Sentencing Procedure) Act 1999 and determine that the individual defendant should be required, notwithstanding the plea of guilty, to pay no fine. Section 10A provides: 10A Conviction with no other penalty (1) A court that convicts an offender may dispose of the proceedings without imposing any other penalty. ... This provision was inserted into the Act in 2006. In R v Wilhelm [2010] NSWSC 378 at [36], Howie J in the Supreme Court of New South Wales described s 10A as being: a section that has recently been added to the armoury of the sentencing court in such a case where the Court indicates that the charge was deserving of a conviction but one where it is deserving of no other punishment in the circumstances of the particular case. In considering such a submission regard must be had to factors in s 10(3): (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. Reliance is placed on the reasoning in Inspector Cooper v Kwik Seal P/L [2006] NSWIRComm 48 at [43], [45] and [51] and Inspector Mulder v Girotto Precast Pty Ltd [2008] NSWIRComm 94 where a s 10 order was given in the case of a fatality. 47In Inspector Jennifer Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138, Boland J considered the application of s 10A of the CSP Act. This case concerned the Redfern Riots in which 42 police officers sustained injuries. In considering its application, Boland J stated at [47]: Where the risk to health and safety was known, where the breach had potentially very serious consequences for the health and safety of employees, where the risk was easily preventable, where the main factor to be considered in determining an appropriate penalty to be imposed is the objective seriousness of the offence, and where the subjective factors do not outweigh the objective considerations, there is no scope, in my opinion, to apply s 10. It has also been held that the s 10 discretion is to be reserved for extraordinary and highly exceptional circumstances: Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31. 48However, the Court, on an examination of the new documentation produced, assesses the financial circumstances of the defendants differently. Rather than "averaging" the income of Regal, it has been revealed in 2009 Regal had an income before deductions of $1,143,855 and in 2010 $651,217. The corporate records further reveal Mr Charan is now the sole shareholder and director of Regal. Prior to that date, he asserts his wife was the sole director. Mr Charan contends his wife was at some time the sole shareholder. When the circumstances changed is unclear from the ASIC records produced. What is clear is Mr Charan is now the sole director and he has always been listed as the company secretary. He holds all three shares in the company. He registered the company. 49The financial records of Regal also reveal in 2007 there was a shareholder loan of $73,986.75. In 2008, when Regal had a turnover of $363,789.52, there was a loan to the shareholder of $92,259.00. In 2009, when Regal had an income of $1,143,855.98, there was a loan to the shareholder of $88,914.15. In 2010, Regal had an income of $669,293 and there was a shareholder loan of $42,202. All these loans were deducted before profit. 50Some prior decisions of the Court listing penalties under $5,000 have also been placed before the Court as a comparative. No reasoning has been advanced as to why such penalties would be apposite comparatives in the circumstances. It was also contended by the defendants, even if the Court takes into account the income and resources available to the personal defendant, the personal defendant remains a person of modest assets and financial resources with a limited capacity to pay any fine and the fine that otherwise would have been imposed on the personal defendant should be significantly reduced to take into account his financial position. 51It is now clear as a shareholder of each corporation, Mr Charan has received large loans from both the defendant corporation, and its associated corporation Regal, with no record of repayment for any of the loans over many years. I do not accept in the circumstances, and especially when the above financial details were not at first put properly before the Court, that either the corporate defendant or the individual defendant is in a pecuniary circumstance. The corporate defendant is owed a considerable sum given the loans it has given Mr Charan. Mr Charan has had, over the years, the benefit of these loans as well as loans from Regal. I therefore reject the submission either defendant is impecunious and therefore reject the application of s 6 of the Fines Act 1996 to my consideration of penalty. 52For all the above reasons, I reject any application of ss 10 and 10A of the Crimes (Sentencing Procedure) Act 1999 to the prosecution brought against Mr Charan. As I understand the submissions which I reject is, if there is to be penalty, the corporate defendant should be convicted and penalised but Mr Charan should be convicted with no penalty. However, s 10 nor s 10A I find are applicable in these circumstances. This was not a minor offence. 53I find each defendant guilty. 54As to costs, the defendants also rely upon the provision of s 4 of the Fines Act 1996 which provides relevantly: (1) For the purposes of this Act, a fine is: ... (f) any costs (including expenses or disbursements) payable by a person under an order made by a court in proceedings for an offence that were brought by a law enforcement officer, or ... 55Reliance is placed upon the reasoning in Inspector Yeung v Donald Edwin Wilson t/as Wilson's Tree Service [2005] NSWIRComm 158 where the Full Court stated: [123] The issue before us relates to a costs order for the prosecution. In WorkCover Authority of NSW (Insp Dawson) v Plastachem Pty Ltd & Ors (2001) 110 IR 351, costs were considered in proceedings before the Court Session for breaches of the occupational health and safety legislation. That prosecution was dismissed The court made clear at [48]: In summary criminal proceedings in this Court, it will ordinarily be appropriate to award costs to a defendant against whom a prosecution has failed. Once the legislature abolished the traditional common law rule that the Crown and those who institute summary proceedings neither pay nor receive costs, as it has done by enacting s14 of the Supreme Court (Summary Jurisdiction) Act , the Court must exercise its discretion as to costs in accordance with what is just and reasonable. Where a defendant has secured the dismissal of a criminal charge, it will not generally be just and reasonable to deprive the defendant of an order for costs. 56It was submitted that the costs for both defendants should be reduced to take into account each defendant's limited financial capacity and resources, although a concession was made that the corporate defendant could be eligible for penalty. However, the corporate defendant carries a significant profit margin over a number of years once loans to Mr Charan, the shareholder, are repaid. 57In considering the issue of costs as against the personal defendant, it was submitted that particular matters should be taken into account: it is possible the costs for the prosecutor as apportioned to the personal defendant would be substantially greater than the fine that would be imposed against him; the costs to be borne by the personal defendant would be in addition to the costs to be borne by the corporate defendant; if the usual approach to costs is taken, it would result in the personal defendant having to pay a disproportionately high amount in costs and in total. 58It was further submitted the appropriate approach to take in relation to the costs order against the personal defendant is: to set the appropriate penalty; determine the costs order; then determine whether the total fine and costs order are "an acceptable total" or "just and reasonable". In the consideration as to whether the total is appropriate, the Court, it is submitted, would not only bear in mind the financial position of the personal defendant but also the fact that the maximum penalty for the personal defendant is $55,000. 59In these two prosecutions, I reject the submissions of the personal defendant. I do not accept he has no access to funds. 60I find there should be no allowance allowed for a deduction in the penalties I set for each defendant and I reject the submission that each has a limited capacity to pay. The financial records reveal Mr Charan has been a significant beneficiary through loans from all of the family corporations and he was the Director and controlling mind of the defendant corporation. There will, therefore, also be no deduction of penalty because of the costs order. I find both defendants have a capacity to pay an order for costs. 61There should, however, be one order as to costs of the prosecutor in these two prosecutions heard together. The costs shall be borne equally between the corporate defendant and the personal defendant.

Orders 62The Court makes the following orders:

1. In Matter No IRC330 of 2010, I find the corporate defendant guilty of the offence as charged.
2. The defendant is fined in the sum of $45,000 with a moiety to WorkCover Authority of New South Wales.
3. In Matter No IRC331 of 2010, I find the individual defendant guilty of the offence as charged.
4. The defendant is fined in the sum of $15,000 with a moiety to WorkCover Authority of New South Wales.
5. There shall be one order as to the costs of the Prosecutor. Each defendant is liable for half the costs of the Prosecutor. There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. 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: 31 March 2011