Inspector Jelley v Albright & Wilson

Inspector Jelley v Albright & Wilson - [2007] NSWIRComm 148 - NSWIRComm 2007 case summary — Zoe

[10]

1 Before the Court are two applications for leave to appeal and appeal brought by the prosecutor at first instance under s 197 of the Industrial Relations Act 1996 against the decision of Magistrate Maloney of 27 November 2006. Following pleas of guilty to two offences under s 8(1) and s 8(2) of the Occupational Health and Safety Act 2000 Magistrate Maloney imposed penalties of $8,000 in respect of each offence. 2 The facts giving rise to the offences were set out in a Statement of Facts which was tendered by the prosecutor in the proceedings below. According to that document, on 29 March 2005 Rufino Obleau, an employee of the respondent, was performing maintenance work on a ballestra sulphonation reactor with the assistance of a maintenance contractor, Henry Wynands. The reactor was used to produce a base material for making detergents through a process known as sulphonation. By this process sulphur is burnt in air to produce sulphur dioxide which is then converted into sulphur trioxide. This substance reacts with moisture in the air to produce a by-product, oleum, which is super-saturated sulphuric acid. Oleum builds up in the reactor over time. This build-up is continuously drained away into an oleum drain tank. From time to time some oleum crystallises in the reactor's drain lines causing a blockage which has to be routinely cleaned at least once every three months. 3 On the day in question Messrs Obleau and Wynands were dismantling the reactor in preparation for its cleaning by other workers. Mr Obleau connected a hot water hose to an oleum ring, turned the tap off then walked away to avoid being splashed. After a few minutes he turned the tap on and was squirted in the abdomen, forearms and right thigh with a mixture of oleum and hot water. The oleum penetrated his clothes and began to burn his skin. He suffered serious burns to his body which necessitated skin grafts and wearing a pressure suit for 18 months. At the time of the incident neither Mr Obleau nor Mr Wynands were wearing protective clothing such as a PVC apron or an acid suit. These items were required to be worn by the workers while undertaking the preparation work. This requirement was set out in a Work Order which had been issued by the respondent expressly for the work. Both men were experienced workers who had regularly undertaken the task of cleaning the reactor. The Work Order specified the wearing of an "acid apron", goggles, full face shield, gloves and gum boots for cleaning the reactor, but these instructions were ignored by the two men. According to both men protective clothing was available but it was not a common practice for them to wear PVC aprons or acid suits during the cleaning process. Mr Obleau, a deputy leading hand, had been designated by the respondent as Mr Wynands' supervisor in relation to work on the reactor. Decision at first instance

[19]

The Defendant failed to provide such information, instruction, training and supervision as were necessary to ensure the health and safety of persons not in its employment. 11 Having carefully read the sentencing remarks we do not agree that his Honour's attention was confined primarily to one particular. There are several references in the decision to an unsafe system (described at one point by his Honour as a "poor system") and to deficiencies in supervision and instruction on the respondent's part, particularly in relation to Mr Obleau. Although not apparent from the particulars as framed in both charges, it emerged in the agreed facts that the first particular comprised two allegations of an unsafe system in relation to the dismantling and cleaning of the reactor. The first of these alleged a failure to document a procedure in use at the time of the offences, which involved attaching an off-cut of hose to the oleum drain leg in order to direct the flow of the fluid downwards. This measure allowed diluted oleum and water to flow onto the platform floor to the ground below, and away from workers working nearby. The procedure was in common usage but was not documented. It was not utilised by Messrs Obleau and Wynands at the time of the incident. Significantly, the appellant conceded that this procedure was not unsafe and was in common use at the time of the offences. This aspect of the system alleged to be unsafe was, therefore, confined to a failure to document an otherwise safe system which, nevertheless, was in common usage. A reading of the charges and of the evidence reveals that the primary focus of the first particular was the second of the two allegations, namely, the respondent's alleged failure to ensure that the Work Order system was properly implemented. This was the approach adopted by the Magistrate, and in our view it was the correct approach. 12 It should be borne in mind that the context in which the particulars were drafted was the incident which resulted in Mr Obleau's injuries and the events immediately preceding that incident. Those events concerned the system prevailing at the time of the offence in relation to the preparation and cleaning of the reactor. The system required the issuing, reading and signing of Work Orders, in preparation for the work. The Work Order the subject of the charges, required the workers to wear protective clothing while performing the task, a requirement that was ignored by them. Nevertheless, the Statement of Facts records that Mr Obleau claimed not to have seen the Work Order, although Mr Wynands says he gave the Work Order to Mr Obleau, who signed it. There was no indication, however, on the face of the Work Order that Mr Obleau had signed it. The particular alleging a failure to supervise, instruct and train also directly concerned the lack of necessary supervision and instruction of both workers in relation to their failure to wear the protective clothing. The focus of the charges and the central issue in the sentencing proceedings was, therefore, the alleged failure to ensure that the workers followed the instruction to wear protective clothing. These failures were particularised as a failure of system as well as of necessary instruction, supervision and training. In our opinion, the Magistrate directed his attention to that central issue and, as such, the proceedings at first instance do not disclose error in that respect. 13 The appellant also contends that his Honour did not give adequate weight to the foreseeability of the risk to safety, specifically the risk which arose from exposure to the oleum. We do not agree with the contention. The sentencing remarks in our view reveal that his Honour not only referred to the issue of foreseeability on a number of occasions but also properly applied it as a factor relevant to the objective seriousness of the offences. By way of illustration, his Honour refers to, "the worker" disobeying the requirement to wear protective clothing and to the respondent's concern that it was, "...foreseeable that a careless or disobedient employee might not wear ... protective equipment or follow the correct procedure". Elsewhere in the decision his Honour refers to the ability of Mr Cranke to, "foresee injury" to Mr Obleau. The observation is followed by the comment that non-compliance with the Work Order could result in "catastrophic consequences", and that employees working in the respondent's industry, "have to be protected for their own safety if they cannot see it employers must. In this case they did see it". We take this latter quote to refer to the respondent's knowledge of the risks to safety associated with the task of preparing and cleaning the reactor, and specifically to the risks associated with exposure to the oleum. 14 The appellant also contends that the sentencing proceedings were tainted by the Magistrate's erroneous approach in regarding the respondent's refusal to apply for an order under s 10 of the Crimes (Sentencing Procedure) Act 1999 as a relevant consideration in determining the objective seriousness of the offences. In support of this contention the appellant relies on a particular passage in the transcript of the proceedings which sets out an exchange between his Honour and the appellant concerning the respondent's (referred to as "her" or "she") refusal to ask for the order:

[23]

NGUYEN: That's correct. 15 The above exchange followed an earlier exchange between the Magistrate and the respondent during which his Honour enquired whether the respondent intended to apply for an order under s 10 of the Crimes (Sentencing Procedure) Act. In our view neither of the exchanges provides any indication that the Magistrate took into account the respondent's failure to ask for a s 10 order as a relevant consideration in assessing the objective seriousness of both offences. In these circumstances, we perceive no error in his Honour's approach to the assessment of the objective factors. 16 Finally, in relation to the first ground of appeal, the appellant contends that the Magistrate considered neither the availability of simple remedial steps nor the issue of specific deterrence. Remedial steps available to be taken by the respondent prior to the commission of the offences were set out in the Statement of Facts as a factor relevant to the objective seriousness of the offences. Notwithstanding this material there is nothing in the decision itself which suggests that his Honour took this factor into account. Immediately before the sentencing reasons commence, however, the factor is discussed by his Honour and the appellant during which the appellant specifically directs his Honour's attention to the relevant passages in the Statement of Facts, as well as to an earlier discussion between his Honour and the appellant concerning the relevance of the factor to the objective seriousness of the offences. Nevertheless, it would appear from our reading of the decision (which makes no reference to the factor) that his Honour failed to take it into account. 17 Whether or not his Honour took into account on sentence the principle of specific deterrence is problematic. This issue was also the subject of discussion during the sentence proceedings. The respondent during the proceedings submitted that the circumstances did not give rise to, "...a case in which specific deterrence is necessary", to which his Honour replied, "No, no, no, not at all." Whatever interpretation may be given to this latter comment, it appears that his Honour acknowledged the relevance of the principle to the circumstances of the offences when he observed during the remarks on sentence that because both Mr Obleau and Mr Wynands had performed the work of cleaning the reactor without incident over a period of years, "One cannot then assume that nothing has gone wrong in the past and nothing will go wrong in the future and in an industry such as this accidents do happen." What is not clear, however, is that having acknowledged the relevance of the principle, whether his Honour then took it into account when imposing penalties. A number of appellate decisions in this jurisdiction have emphasised the importance of the principle's application in relation to occupational health and safety offences. A recent statement to this effect is found in the Full Bench judgment of Inspector Green v Camilleri Properties Pty Ltd (2006) 152 IR 156 which held (at [16] and [17]):

[24]

[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 (No 2) (2000) 101 IR 261 at [46].

[25]

[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. (See also WorkCover Authority (NSW) (Inspector Jones) v Challita (2006) 153 IR 409 at [33] -[35]) 18 The facts before his Honour in the present matter reveals that the respondent is a large enterprise that continues to operate as an employer in its field. Neither of these issues were specifically adverted to by his Honour in the sentencing remarks. In concluding his remarks the Magistrate states that he has applied the principles set out in the judgment of Hungerford J in WorkCover Authority of NSW South Wales (Inspector Martin) v Byrne Civil Engineering Constructions Pty Limited (No 2) (2001) 109 IR 347. That judgment at [19] had been brought to his Honour's attention during the sentencing proceedings. In that part of the judgment, Hungerford J summarised the proper approach to sentencing for occupational health and safety offences. The passage, however, purports to be only a summary without specific reference to the objective and subjective factors relevant to the sentencing of offenders for occupational health and safety offences. In the absence, therefore, of any express findings in the present matter as to the relevance of specific deterrence (which, on the facts before his Honour, should have been taken into account) and as to the availability of simple remedial measures prior to the commission of the offences, we are of the view that his Honour fell into error. 19 For reasons which we will discuss shortly, we do not consider that we should intervene in order to re-sentence the respondent. This is because in our view the penalties imposed were not so manifestly inadequate as to warrant appellate intervention, particularly having regard to the principle of double jeopardy which is relevant to prosecution appeals. We adopt the approach of the Full Bench in WorkCover Authority (NSW) (Inspector Jones) v Challita in this regard at [35] and [36]:

[31]

While there is no requirement that any sum ordered by justices to be paid to a prosecutor by way of costs should stand in any arithmetical relationship to any fine imposed, the costs ordered to be paid should not in the ordinary way be grossly disproportionate to the fine. Justices should ordinarily begin by deciding on the appropriate fine to reflect the criminality of the defendant's offence, always bearing in mind his means and his ability to pay, and then consider what, if any, costs he should be ordered to pay to the prosecutor. If, when the costs sought by the prosecutor are added to the proposed fine, the total exceeds the sum which in the light of the defendant's means and all other relevant circumstances the defendant can reasonably be ordered to pay, it is preferable to achieve an acceptable total by reducing the sum of costs which the defendant is ordered to pay rather than by reducing the fine. (See also Inspector Childs v Stimson (No 4) [2006] NSWIRComm 158 at [19] - [23]). 23 In Environment Protection Authority v Phillip Gregory Barnes [2006] NSWCCA 246, Kirby J (with whom Mason P and Hoeben J agreed) said that the costs order imposed at first instance, following the imposition of fines was an, "important aspect of the punishment of the respondent", (at [78]) and, that, although the fines imposed (which were for environmental offences) were lenient they were only part of the penalty, the respondent having been obliged to pay substantial costs (at [88]). 24 In Environment Protection Authority v Hardt [2007] NSWLEC 284, Preston CJ held, that although the defendant had a capacity to pay a fine under s 6 of the Fines Act 1996 he also owned property subject to significant mortgages, a fact which was relevant to the quantum of penalty which would be imposed. His Honour, following EPA v Barnes, when fixing the penalty and costs orders, said "...the total penalty that is imposed upon an offender should also take into account any order against the defendant for the payment of the prosecutor's legal costs" (at [66]). 25 It would be readily apparent from this brief analysis that the above three judgments differ significantly from the present matter in at least one respect and the latter two judgments in at least two respects. First the three judgments involved individual defendants all of whom, the courts found, had limited capacities to pay a fine. The respondent, being a corporation, is in a somewhat different situation, not only because of its corporate status simpliciter, but also because no submission was advanced at first instance on its behalf that it had a limited capacity to pay a fine. In relation to the respondent's corporate status it faces a different statutory maximum penalty under s 12 of the 2000 Act from that which may be imposed on an individual offender. 26 The second respect in which the latter two judgments of EPA v Barnes and EPA v Hardt differ significantly from the present matter is that the interrelationship between the penalties imposed and cost orders by reference to the offenders' respective financial means, was acknowledged in the context of agreement between the parties that costs in a specified amount would be paid. There was no such agreement in the present matter. 27 Two additional matters should be mentioned in relation to the respondent's submission that any costs awarded to the appellant should be taken into account when imposing a monetary penalty. First, the sentencing discretion and the discretion as to costs, although separate discretions, may involve overlapping considerations. The requirement to have recourse to the provisions of the Fines Act when the means of an offender is raised as an issue, is one such overlapping consideration. Under s 4 of that Act a fine is defined to include any costs order payable under a Court order in criminal proceedings brought by a law enforcement officer. The discretion to award costs is unfettered although any such award must be "just and reasonable" in the circumstances. It should also be borne in mind that costs orders are compensatory in nature. By contrast the imposition of a monetary penalty is punitive in nature. This important distinction was adverted to in Latoudis v Casey (1990) 170 CLR 534 at 543 (per Mason CJ):

[32]

If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings: Cilli v Abbott (1981) 53 FLR 108. Most of the arguments which seek to counter an award of costs against an informant fail to recognize this principle and treat an order for costs against an informant as if it amounted to the imposition of a penalty or punishment. But these arguments only have force if costs are awarded by reason of misconduct or default on the part of the prosecutor. Once the principle is established that costs are generally awarded by way of indemnity to a successful defendant, the making of an order for costs against a prosecutor is no more a mark of disapproval of the prosecution than the dismissal of the proceedings. 28 Secondly, in the context of occupational health and safety offences the primary purpose of the statute, including the sentencing process under it, is the protection of persons at work or in the workplace. This purpose is reflected in the objects set out in the 2000 Act which include the securing and promotion of safe working environments, and the protection of people at work or in the workplace against risks to health and safety arising out of work-related activities. The principle of deterrence (both general and specific) has as its objective the need to discourage offenders from committing workplace-related offences. As a principle of punishment it requires the imposition of a fine of sufficient severity to deter future offenders. It is important that the significance of the principle in the sentencing process under the occupational health and safety legislation is not eroded by competing factors such as an offender's capacity to pay which, as a subjective factor, is a secondary consideration. 29 It remains to comment briefly on one further submission made orally by the respondent that involved reliance on a number of Local Court decisions in which monetary penalties were imposed for breaches of occupational health and safety offences. The decisions were relied upon by way of comparison between penalties in order to suggest that the penalties imposed in the present matter were not manifestly inadequate. Courts, however, should be reluctant to place reliance on comparative sentencing material in the sentencing process: Nelmac Pty Ltd v Franke (Inspector) (2006) 151 IR 163 at [24]-[27]. The respondent conceded that each case must be determined by reference to its own particular facts and circumstances. This concession is not surprising since the proposition is both obvious and well established. In any event, it is unnecessary for us to take this matter any further given the outcome of this appeal. 30 Although the appellant has been successful in demonstrating error in respect of a number of aspects of the decision at first instance he has not been successful in having the appeal upheld. In the circumstances it would be expected that costs would follow the event. We will therefore make an order to that effect, the operation of which will be deferred for 14 days to permit either party to make an application as to the costs issue. Orders

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