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[2005] NSWIRComm 206
defendant. Matter No IRC 5366 of 2003: Defendant found not guilty, application dismissed. Matter No IRC 5370 of 2003: Defendant found guilty, convicted, and fined $8,750 with moiety to prosecutor. Matter No...
Francis James Burn, as sole director of two companies, was prosecuted after a worker died when heavy crates collapsed at a warehouse. The Court found that Burn had completely failed to address safety, assuming his managers would handle it. The Court ruled that directors cannot delegate their safety responsibilities, and even though Burn claimed he had lost control of the business, he remained legally responsible. Two of the three charges were proven, resulting in fines totalling $17,500. The Court emphasised that workplace safety is paramount, and penalties must deter others from similar failures, even if the defendant has limited money to pay.
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Industrial Relations Commission of New South Wales in Court Session
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CITATION: Inspector Ken Kumar v Francis James Burn [2005] NSWIRComm 206
Prosecutor Inspector Ken Kumar PARTIES: Defendant Francis James Burn
CATCHWORDS: Occupational Health and Safety - three prosecutions under s26(1) of the Occupational Health and Safety Act 2000 - pleas of guilty entered to all offences - three offences under s26(1) arise by virtue of defendant's status as sole director of two corporate defendants - defendant not guilty in relation to s8(2) offence against corporate defendant - Application for Order No IRC 5366 of 2003 dismissed - in relation to remaining two offences held defendant directed no attention to any matters concerning safety - whether there was a reasonably foreseeable risk to safety - deterrence - consequences of the breaches - subjective features - early pleas of guilty - capacity to pay a fine - application of totality principle - penalty - orders.
LEGISLATION CITED: Occupational Health and Safety Act 2000
Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610, 99 IR 29 Crown in Right of the State of New South Wales (Dept of Education and Training) v Keenan (2001) 105 IR 181 Ferguson v Nelmac Pty Limited (1999) 92 IR 188 Inspector Paul Kenneth Wade v Ken Mathews Haulier Pty Limited t/as Ken Mathews Landscaping Supplies [2005] NSWIRComm 85 Inspector Ken Kumar v Keralex Pty Limited (In Administration) [2005] NSWIRComm 199 Inspector Ken Kumar v Top Container Transport Pty Ltd (In Liquidation) [2005] NSWIRComm 203 CASES CITED: Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61 R v Shenton (2003) NSWCCA 346 R v Thompson, R v Houlton 49 NSWLR 383, 115 A Crim R 104. WorkCover Authority of New South Wales v Kirk Group Holdings Pty Limited (2004) 135 IR 166 WorkCover Authority of New South Wales (Inspector Benbow) v Converquip Pty Limited (2001) 106 IR 258 WorkCover Authority of New South Wales (Inspector Patton) v Fletcher Constructions Australia Ltd (2003) 123 IR 121
Prosecutor: Mr R. Reitano, of counsel Solicitor: Criminal Law Practice, Legal Group WorkCover Authority of New South Wales LEGAL REPRESENTATIVES:
Defendant: Mr D. Aquilina, of counsel Solicitor: MacGillivrays Solicitors
Prosecutions under s26(1) of the Occupational Health and Safety Act 2000.
1 Francis James Burn ("the defendant") has been charged with three offences under s26(1) of the Occupational Health and Safety Act 2000 ("the 2000 Act"). The defendant has entered pleas of guilty to each of the three offences. 2 Matter No 5366 of 2003 alleges an offence under s26(1) by virtue of the defendant's status as a sole director of Keralex Pty Limited (In Administration) ("Keralex"). The prosecutor had filed an Application for Order (No 5368 of 2003) against Keralex alleging a contravention of s8(2) of the 2000 Act. 3 Matter No 5370 of 2003 alleges an offence under s26(1) again by virtue of the defendant's status as sole director of Keralex. The prosecutor had filed an Application for Order against Keralex (No 5367 of 2003) alleging a contravention of s10(1) of the 2000 Act. 4 Matter No 5364 of 2003 alleges an offence under s26(1) by virtue of the defendant's status as a sole director of Top Container Transport Pty Ltd (In Liquidation) ("Top Container"). The prosecutor in that matter had filed an Application for Order against Top Container alleging a contravention of s8(1) of the 2000 Act. 5 I propose to give separate consideration to each contravention alleged against the corporate defendants. Matter No 5366 of 2003
6 The offence alleged in Matter No 5366 of 2003 concerns the alleged contravention by Keralex of an offence under s8(2) of the 2000 Act, namely, Keralex's failure as an employer at 16 Childs Road, Chipping Norton ("the premises"), on 26 September, 2001 to ensure that people, other than its employees, in particular Maxwell Cook, ("Mr Cook"), were not exposed to risks to their health or safety arising from the conduct of its undertaking while at its place of work. 7 If the corporation is found to have contravened s8(2), the defendant, as director of Keralex is deemed to have contravened s8(2) under s26(1) of the Act (subject to successfully availing himself of either of the two defences set out in s26(1) (a) and (b)). 8 The particulars of the alleged contravention by Keralex and the defendant are respectively set out in the Application for Order as follows:- Particulars of the contravention of the Defendant : 1. At all material times Francis James Burn ("Burn") of 2 Wendt Road, Chambers Flat, Queensland, was a Director of Keralex Pty Ltd (In Administration) [ACN NO: 011 070 170] ("the Company") an incorporated company with its registered office at 2 Wendt Road, Chambers Flat, Queensland. 2. At all material times, Burn was the sole director of the Company and ultimately responsible for all systems of work and work methods employed by the Company.
(ii) in the same Final Statement, Mr Burn said that Top Container employed both himself and Mr Cook on 26 September 2001: Q40 and Q158 respectively;
(iii) in the Final Statement at Q50 to Q53, Mr Burn said he "worked for" the defendant from 1990 to 2001 and ceased employment with the defendant on 17 December 2001;
(iv) Don William Steel ("Mr Steel"), General Manager of Top Container and employed by Top Container from early February 2001 until 17 December 2001 said he worked for the defendant from 17 December, 2001 and, that, to the best of his knowledge, the defendant did not have employees: Manager's Statement, 22 September 2003: Q44, Q45, Q102, Q122, Q123;
(v) according to Mr Steel, the defendant traded as Burnsall Haulage: Manager's Statement: Q58, Q103;
(vi) according to Mr Burn, in answer to the question, "Who was Burnsall Haulage and what is the relationship between Top Container Transport Pty Ltd and Keralex Pty Ltd?", he said, "Keralex Pty Ltd": Final Statement, Q126;
(vii) Trevor McCaw said that on 26 September 2001, he was employed "at Burnsall Haulage": Witness Statement, 28 March 2002, Q10;
(viii) Mr Lomas said his employer was Burnsall Haulage: Witness Statement, 20 November 2001, Q6, Q13;
(ix) Stephen Hayward said that on 26 September 2001, he was employed by Burnsall Haulage: Witness Statement, Q9, Q10;
(x) Lyndsay Crowley ("Mr Crowley") at first said he was employed as a Sydney Manager on 26 September 2001 by "Burnsall Haulage, a division of Keralex Pty Ltd" and that that entity employed at the premises about 27 employees: Manager's Statement, 13 November 2001, Q6, Q7, Q16, Q17. Later, in a Manager's Statement dated 31 July 2003, the following exchanges took place between Mr Crowley and the prosecutor: "Q34: Who employed you on 26 September 2001?
A: Top Container Transport Pty Ltd. I became aware of this after about month or so of joining the company when I received my first pay slip. I applied for a position with Chandler and MacLeod recruitment. When I was interviewed I was told that there a (sic) position with Burnsall Haulage, a division of Keralex Pty Ltd.
Q39: In reply to my question 6 of 13 November 2001, you said that you were employed by Burnsall Haulage, a division of Keralex Pty Ltd. In fact, as indicated in your letter to me on 25 October 2001, Burnsall Haulage is just the trading name. Is this your understanding?
A: My understanding was that Burnsall Haulage was a trading name.
Q44: In your Group Certificate for the year 2001/2002 who is listed as your employer, Keralex Pty Ltd or Top Container Pty Ltd?
(xi) on 14 November 2001, Brett Maken said he was employed by "Burnsall Haulage" for about eight months;
(xii) an ASIC extract from the Australian Business Register included in the brief of evidence records that Burnsall Haulage is the trading name of the defendant as at 28 September 2001;
(xiii) an internal WorkCover document contained in the brief of evidence headed "WorkCover New South Wales Policy Term and Tariff Industry Report" records that Top Container Transport Pty Ltd had between 18 April 2001 until 18 April 2002 30 employees. There is no such document in the brief of evidence in the defendant's name. [22] The foregoing evidence represents the entirety of the evidence before me as to the defendant's status as an employer. That evidence as it stands is simply not sufficiently conclusive, to the requisite standard, of a finding that the defendant as at 26 September, 2001 was an employer. The brief of evidence contains none of the usual documentation such as group certificates, which might otherwise be determinative of a finding that the defendant was an employer. The Statement of Facts is silent on the issue. [23] Given the state of the evidence in relation to the first element which must be proved by the prosecutor beyond reasonable doubt, I find that the prosecutor has failed to prove the offence alleged under s8(2) of the Act. Accordingly, Application for Order No IRC 5368 of 2003 must be dismissed. 11 It follows since Keralex has been found not guilty of the contravention under s8(2) that in relation to the Application for Order No IRC 5366 of 2003 the plea of guilty can not be accepted and it must also be dismissed. Matter No 5370 of 2003
12 The offence alleged in Matter No 5370 of 2003 under s26(1) of the 2000 Act concerns the alleged contravention by Keralex of an offence under s10(1) of the 2000 Act, namely Keralex as controller of the premises used as a place of work on 26 September, 2001 failed to ensure that the premises were safe and without risks to health. 13 In relation to that alleged contravention by Keralex I found the offence proven, the defendant guilty and recorded a conviction. Keralex was fined $135,000: Inspector Ken Kumar v Keralex at [91]. Matter No 5364 of 2003
14 The offence alleged in Matter No 5364 of 2003 under s26(1) of the 2000 Act concerns the alleged contravention by Top Container of an offence under s8(1) of the 2000 Act, namely, Top Container, being an employer, on 26 September, 2001 at the premises failed to ensure the health, safety and welfare at work of all its employees, in particular Mr Maxwell Cook. 15 In relation to that alleged contravention by Top Container I found the offence proven, and recorded a conviction. Top Container was fined $140,000: Inspector Ken Kumar v Top Container Transport Pty Ltd In Liquidation) [2005] NSWIRComm 203. Factual Background
16 An Agreed Statement of Facts with annexures was tendered against the defendant, in the sentence proceedings. In it the defendant was nominated as the sole director of Keralex and Top Container. According to the document, Keralex occupied the premises and Top Container employed approximately twenty workers, including Mr Cook, to work at the premises on 26 September, 2001. 17 Keralex was responsible for the operation and management of a warehouse facility for the general cartage, storage and distribution of products including cooking oil and products. At the time of the alleged offence, it handled Stemcor steel products. It also operated a Daewoo forklift truck model no. 252-2, serial number 11-00412 at the premises ("the forklift"). 18 On 26 September, 2001, Mr Cook used the forklift to stack steel crates containing stainless steel welded pipes ("the crates"). The crates were approximately 6200mm long, 600mm wide and 750mm high. The weight of a fully laden crate was approximately 1,400 kilogrammes. 19 Mr Cook commenced work at about 10am. He was assisted by another Top Container employee, Mark Lomas ("Mr Lomas") with the unloading and stacking of containers of nuts and bolts using the forklift. 20 On 26 September, 2001, twelve crates were delivered to the premises from R&H Transport at around lunchtime upon instructions from Stemcor (A/SIA) Pty Limited ("Stemcor"). Mr Cook unloaded the crates using an overhead crane and then stacked the crates using the forklift. He stored them by stacking them one on top of the other, six crates high ("the stack").
21 Mr Lomas finished work that day at about 2.30pm. Thereafter, Mr Cook worked alone without supervision stacking the crates using the forklift. At about 3.40pm, while Mr Cook was operating the forklift near the stack, the stack collapsed and one of the crates fell on top of the forklift. The force of the collapse of the stack on the forklift resulted in Mr Cook suffering fatal injuries. 22 A report annexed to the Agreed Statement of Facts dated 26 February 2002 and headed "Burnsall Haulage FLT Accident" produces calculations of the angle of tilt required to cause overturning of crates stacked six high. The report was commissioned by the WorkCover Authority of New South Wales and prepared by Senior Inspector Alan Kerruish. The width and height of the crates tested were identical to the dimensions of the crates which toppled over and fatally injured Mr Cook on 26 September, 2001. An assumption was made for the purposes of the test that each case or crate in the stack is of equal weight and that the weight in each crate is evenly distributed. The report concludes that a six-crate high loose stack, with its centre of gravity at 3,300 mm above ground level, requires a 456' angle of tilt to cause it to overturn. 23 Although the report does not purport to duplicate the exact conditions existing at the time of the fatal accident, some reliance may nevertheless be placed on it as an indication that the six crates stacked in two loose stacks by Mr Cook at the time of the accident (as the evidence suggests) required only a small angle of tilt in order to give rise to a risk of toppling over. 24 According to the Agreed Statement of Facts the defendant was, "ultimately responsible for all systems of work methods employed by Keralex and Top Container". 25 The Agreed Statement of Facts also contains the following material extracted below:- Prior to the accident date Top Container had no system of work in place for the stacking of crates or any other container in the premises, other than leaving it to the discretion of Cook and Lomas. Prior to the accident date Top Container had no written procedures, work method statements or documented systems of work in place for the stacking of crates in the premises. In particular, prior to the accident date Top Container did not undertake a risk assessment to identify the number of crates that could be safely stacked on top of each other or the system of work associated with the stacking of crates on top of each other. Prior to the accident date Top Container did not provide supervision of employees, in particular Cook, during the stacking of the crates to ensure it was done without risks to health and safety. Since the accident date, Top Container implemented the following changes: (a) Implemented a system on 2 October 2001 to: (1) inspect all products when received at the premises; (2) unload the product by overhead crane; (3) place damaged crates to the top of the stack; (4) to not stack crates more than 4 crates high or 2.4 metres whichever is the greater. (b) Subsequent to Top Container engaging a safety consultant, Environment Friendly Logistics, implemented a system after 23 October 2001, to ensure the crates in the premises were made stable and secure and reduced in stacking height to below 4 metres. (c) After 23 October 2001, Top Container set up a safety committee and implemented occupational, health and safety training for its employees, neither of which had previously been in place. 26 Although none of this extracted material makes specific mention of Keralex's role in ensuring safety at the premises, the Agreed Statement of Facts states that Keralex has been charged with offences, "arising out of the same circumstances". The circumstances referred to would appear, from my reading of the Agreed Statement of Facts, to directly relate to the extracted material in relation to Top Container, quoted above.
27 The Court was also informed by the prosecutor that the defendant had no prior convictions. The defendant's evidence
28 Two affidavits of the defendant were read into evidence, the first sworn on 24 November, 2004 and the second sworn on 6 December, 2004. 29 In those affidavits the defendant provided background into the incorporation of Keralex and Top Container, and, the business operations conducted by both corporations at the premises on 26 September, 2001. 30 According to the defendant, Keralex was incorporated in about 1990. In about June 2000 the defendant caused to be incorporated Top Container. Top Container acquired the business of another company, Top Transport Pty Ltd, and its depot at Enfield, in New South Wales for approximately $1.8 million. The purchase was financed by another company, "Time Plan", which was controlled by a man called Kevin Kirby ("Mr Kirby"). Repayments of the purchase price were met by Keralex at about $40,000 per month, the first repayment commencing in August 2000. 31 After being unable to secure a loan over the Enfield depot, the defendant, in about October 2000, found the premises at Childs Road, Chipping Norton. Mr Kirby, through his company Time Plan lent $600,000 to Keralex towards the purchase price. Keralex received a further $1.3 million from the National Australia Bank ("NAB") towards the purchase price. The repayments on the Time Plan loan were about $18,000 (presumably per month) and, on the NAB loan about $8,000 per month. Total borrowings at that stage amounted to $2.5 million, and total monthly repayments amounted to about $28,000. 32 In about January, 2001 the defendant relocated his business operations to the premises. 33 In about April, 2001 the defendant appointed Mr Steel as general manager. This was done on the advice of Mr Kirby who had suggested that Mr Steel knew how to run a business about the size of the defendant's business. Also, the defendant felt under some pressure to appoint Mr Steel to the position because he did not want to offend a man (Mr Kirby) who had financed the purchase of the business. 34 Mr Steel proceeded to run the, "Sydney depot" until he appointed Lyndsay Crowley ("Mr Crowley") as the manager. The defendant says, in the first affidavit, that the Sydney operation was under Mr Steel's management, and Mr Crowley was employed to manage the business and be responsible for all matters associated with its running, including work safety issues. The defendant also says that once Mr Steel became general manager, "I lost all control of the companies" (that is, Top Container and Keralex). Mr Steel continued to borrow money from Time Plan with Keralex footing the bill. The defendant only occasionally went to the premises, but the day to day running (of the business) was done by Mr Crowley. Everything else was handled by Mr Steel. 35 During the sentence proceedings on 6 December, 2004 Mr Burn, in oral evidence, amended the statement in his first affidavit to read that he lost 75 per cent of control of Keralex and Top Container (as opposed to having lost "all control"). 36 During cross examination of the defendant the following exchange took place:- Q. And you understood that as company director you had various responsibilities in the company? A. Yes Q. And similarly in relation to Top Container? A. Yes. Q. And one of those responsibilities, putting aside anything else, one of those responsibilities that you had was to ensure the safety of employees working for those companies? A. Yes. ..... Q. In order to carry out those responsibilities you had to put in place various things, policy, procedures, systems of work and the like to ensure that these companies complied with their safety obligations? A. Yes. Q. And in your affidavit the paragraph you were taken to earlier and you were asked questions about what sort of control you had of the company you said you had 75%, or you lost 75%? A. Yes. Q. You knew that whatever control you had you were able to say to Mr Kirby, or anyone else, "Listen, these are my companies, I am ultimately responsible for the safety of the employees and these are the things you have to do"? A. It's a bit of a problem where Mr Kirby is the man who was loaning all the money and I didn't feel as though I had to (sic) right to say anything to Mr Kirby like that. Q. And you having the responsibility, the ultimate responsibility for the safety of the employees, you had every right to say those words to Mr Kirby? A. That is what you say, these are circumstances when I am talking to the man. ..... Q. So you knew that at the time, whether you had 25 percent of control or not, that you had the power to say to Mr Kirby, "I am responsible for the safety of the employees and this is what I must do to ensure their safety"? A. If you put it that way, yes. ..... Q. In your affidavit, and I remind you we are talking prior to 17 December, 2001, in your affidavit you say in paragraph 39, "I assumed safety standards were being met". Do you remember saying that? (Shown). Read it to yourself, have you read that? A. Yes. Q. The assumption you made was not accompanied by anything that you did to ensure that that assumption was correct? A. No. Q. You didn't visit the premises in Chipping Norton in order to ascertain whether the safety standards were being met? A. I was at Chipping Norton from time to time, yes. Q. My question was slightly different, you didn't visit Chipping Norton to assess whether or not safety standards were being met? A. No. Q. You just, as you say in your affidavit, made the assumption about that? A. Correct. Q. And specifically in respect of this material that was being delivered by Stemcor on this day, you didn't take any steps in respect of ensuring that there were procedures or systems or anything else in place to make sure whatever was to be done was done safely? A. I didn't know they were being delivered that day. Q. You knew that work was coming? A. That is correct. 37 In around September, 2001 the defendant, in his first affidavit, said he arranged with Stemcor to store Stemcor crates at the premises. He said he informed Mr Steel and Mr Crowley of the arrangement and left it up to both men to negotiate the terms of the contract. The defendant also said that Mr Crowley discussed "the details" with Stemcor. The defendant was unaware that the Stemcor crates were being stored at the premises until the time of Mr Cook's fatal accident when he was informed by Mr Steel. 38 In relation to matters of safety at the premises the defendant in his first affidavit said the following:- I relied heavily on the experienced managers and staff in control of the NSW depot. At no time did I ask them to change the methods of work used at the previous depot. I assumed safety standards were being met from the many years experience collectively within the staff plus the fact that I had experienced administrative and managerial staff in place. Although I relied heavily on the experienced managers and staff in control of the NSW depot, I accept that I am ultimately responsible for the operation of that depot. I initially began as a truck driver and sole trader when I incorporated and expanded and purchased the businesses being run and started to run a substantial entity, I relied exclusively on the management and control and advice offered to me by Don Steel and the advice and experience of the Manager of the Sydney depot. 39 During the sentence proceedings in re examination, the defendant said he did not consider himself an astute businessman, and, he had not done any courses in business management. He left school after completing "sixth grade primary". Prosecutor's submissions on sentence.
40 In written submissions the prosecutor advised the Court that the maximum penalty for the offence was $55,000. 41 The prosecutor submitted that the risk was reasonably foreseeable, and that very simple remedial steps were available to the defendant to eliminate the risk. Several factors were relied upon in support of the submission that the risk was foreseeable. These factors included: (i) the use of forklifts in a warehousing environment raised concerns about safety; (ii) given the weight being lifted (1400kg) by a forklift, commonsense would dictate the necessity for assessing the risk to safety. In this regard, following Mr Cook's fatal accident, forklifts were no longer used; (iii) the complete lack of any supervision and training must have rendered the work dangerous. 42 The simple remedial steps available to the defendant prior to the fatal accident, upon which the prosecutor relies are detailed in the following Agreed Statement of Facts and reproduced in this judgment at [25]. 43 The prosecutor also contended that the likely consequences of the breach given the shear weight and dimensions of the crates, was the tragic death of Mr Cook. 44 Issues of both general and specific deterrence were also of some importance according to the prosecutor. In this respect the defendant's reliance on the fact that he had limited control over the work, and/or, he was away from the premises at the time of the accident, does not assist him, since, according to the prosecutor, he was a director of both corporate defendants and therefore, subject to the statutory offence, obliged to ensure the companies performed their obligations. 45 In oral submissions, the prosecutor expanded upon some of the written submissions. In particular, the importance of specific deterrence was again emphasised, on the basis that it was not the case that there was no likelihood that Mr Burns, 53 years of age, would ever again be a director or manager of a company. In relation to general deterrence, the prosecutor advanced an argument concerning the degree of control the defendant was said to have had over both corporate defendants at the time of the offences. According to the prosecutor, the fact that the defendant was in Brisbane does not shield him from personal responsibility under the Act. Nor does instructing Mr Crowley to look after safety matters discharge the defendant from his responsibilities. In addition, and in relation to the role of Mr Kirby as described by the defendant, the safety of employees at work cannot be compromised in order to keep the business afloat, which is precisely what happened here. 46 The relevance of the financial situation of the defendant to the sentencing proceedings was also dealt with by the prosecutor in oral submissions. Essentially, the prosecutor submitted that the Court had not been sufficiently informed of the defendant's financial position, which was required in order to properly assess the defendant's financial capacity to pay a fine. The limited explanation that was given contained unsatisfactory elements about which the Court was entitled to be sceptical, for example, Mr Burn's departure from Jachsoan Pty Ltd and the position of the family home. 47 In written and oral submissions, the prosecutor conceded that the defendant was entitled to a discount for having pleaded guilty at a "relatively early stage" of the proceedings, although not at the earliest opportunity. The prosecutor also conceded that the defendant had co-operated with the WorkCover Authority of New South Wales in relation to the investigation into the offences. 48 Finally, the prosecutor submitted that the offence was serious and should fall within the "high range of seriousness" of matters coming before the Court.
49 The defendant, in written submissions, conceded that the circumstances disclosed a need for general deterrence, but submitted that the need for specific deterrence should be "very small". The basis of this latter submission appears to be that the defendant said he no longer has any interest in either Top Container or Keralex, and, is currently unemployed. 50 The defendant also, at first, conceded that the risk of injury was obvious and foreseeable by him. Later, in written submissions, the defendant withdrew the concession and asserted that the risk was, "... neither obvious, nor readily foreseeable on his own part". 51 The above assertion according to the defendant was sustainable when considering the following points (based on the evidence): (i) the defendant had lost "considerable control" of the business. He was "virtually powerless"; (ii) the defendant did not know when the Stemcor crates were to be delivered to the premises; (iii) Mr Crowley and Mr Steel had the responsibility of addressing Stemcor's storage requirements; (v) the defendant was not at the premises on the day the Stemcor crates were delivered and therefore did not know the dimensions, shape and weight of the crates. Guilty Plea
52 In relation to the guilty plea, the defendant contended that he pleaded guilty to the Applications for Order on 18 May 2004. This ought be regarded as a relatively early plea justifying a discount of between 20 percent to 25 percent. Post accident measures
53 In addition to the remedial action (referred to above) by the defendant following the fatal accident on 26 September 2001, Top Container implemented a number of other occupational, health and safety changes which included the following: (i) engaging a safety consultant on 23 October 2001 to provide a system to ensure that the crates in the premises were, "made stable and secure and reduced in stacking height to below four metres"; (ii) set up a safety committee. Contrition
54 The defendant also expressed his remorse in relation to the fatal incident. In his first affidavit at [41], the defendant said: "I knew the deceased, Mr Cook as I had worked with him 20 years previously and we had remained workmates ever since. He was a very experienced driver. I was extremely upset and shattered to hear of his death. I was never aware that he had any family, as I always knew that he lived in hotels by himself. I attended the funeral and met his sister for the first time and there discovered that he did have two children whose whereabouts were unknown. The company and myself were unable to offer any financial support to the sister given that the company was now in financial difficulties." No prior convictions
55 The defendant also relied on the fact that he had no prior convictions. Financial capacity to pay a fine
56 In relation to the defendant's financial capacity to pay a fine, the defendant conceded that his "financial situation should not cloud the central issue, namely, to impose a fine commensurate with the seriousness of the offence". Nevertheless, the defendant asked the Court to take into account the fact that he has lost his business, he has very small cash holdings and owns no property. He is also unemployed. Consideration
57 The evidence against the defendant reveals that he was the sole director of both Keralex and Top Container on 26 September 2001. He also negotiated substantial loans on behalf of Keralex and Top Container with Time Plan and other financial institutions in order to finance the relocation of his business operations to the premises. The defendant also actively sought contracts in order to enlarge the business operations of Keralex and Top Container including the contract with Stemcor to store Stemcor products at the premises. 58 These activities suggest that the defendant was substantially involved in the Sydney operations of the two corporate defendants at the premises. The defendant submitted in the sentence proceedings that following Mr Steel's appointment as general manager (of Top Container) he "lost all control of the companies". In oral evidence, this statement was amended to having "lost 75 percent of control". In support of this particular submission, the defendant said that once he successfully obtained the contract for the storage of the Stemcor products he left Mr Steel and Mr Crowley in charge of the further arrangements. 59 Two observations may be made about this particular submission. First, the final details to be sorted out between Mr Steel and Mr Crowley on the one hand, and Stemcor on the other, does not negate in any way the evidence that suggests that the defendant played an active and substantial role in the business activities of the two corporate defendants at the premises up to and at the time of the offence. 60 Secondly, even if the evidence disclosed that the defendant had effectively withdrawn from all business activities associated with the premises this would have little, if any, impact on his culpability in relation to the offence. This is because of the now well-entrenched principle in occupational health and safety law, that an employer cannot delegate his responsibilities or obligations under the legislation to a supervisor or manager, no matter how well qualified or experienced that manager may be: WorkCover Authority of New South Wales (Inspector Patton) v Fletcher Constructions Australia Ltd (2003) 123 IR 121 at 136. 61 Nor can there be any doubt on the evidence that the defendant, as sole director and therefore the alter ego of both Keralex and Top Container, was effectively the employer of both Mr Steel and Mr Crowley. 62 The evidence reveals that the defendant directed no attention at all to any matters concerning safety. In his first affidavit the defendant said he relied heavily on "experienced managers and staff in control of the NSW depot". He assumed that safety standards were being met at the premises. This assumption was based on, "the many years experience collectively within the staff plus the fact that I had experienced administrative and managerial staff in place". 63 In the first affidavit the defendant added, "although I relied heavily upon the experienced managers and staff in control of the NSW depot, I accept that I am ultimately responsible for the operation in that depot". 64 I intend to approach these sentencing proceedings with the above considerations in mind. Maximum penalty
65 The defendant faces a maximum penalty of $55,000. Reasonably foreseeable risk to safety
66 The risk to safety arose from the risk of the crates toppling over. The risk of crates toppling over arose from the unsafe method employed to stack crates. The unsafe method utilised to stack the crates was the direct result of the non-provision by the defendant as sole director, and, acting through Keralex and Top Container to Mr Cook and other employees, of any practices, procedures, training, instruction or information in relation to the safe undertaking of the task. 67 There were inherent dangers associated with the operation. Mr Cook at the time of his fatal accident was working alone. He was working with heavy and cumbersome items of plant, namely the crates and contents; and using a forklift to transport and stack the items. 68 In all these circumstances no other conclusion is available other than that the risk to safety was both obvious and foreseeable. 69 This conclusion renders the offence objectively serious: WorkCover Authority of New South Wales v Kirk Group Holdings Pty Limited (2004) 135 IR 166 at 216 per Walton J, Vice-President. 70 In addition, many simple, effective and available measures could have been implemented by the defendant prior to the 26 September, 2001, and would have substantially obviated the risk. The objective seriousness of the offence is compounded by these additional matters: Inspector Paul Kenneth Wade v Ken Mathews Haulier Pty Limited t/as Ken Mathews Landscaping Supplies [2005] NSWIRComm 85 at [35]. Deterrence
71 In this matter general deterrence is relevant. The circumstances of this tragic accident reveal yet again the paramount importance of workers' safety in the workplace and the need to seek out and identify risks to safety, and, implement measures to obviate and eliminate those risks. Workers at the very least are entitled to work in an environment in which they are secure in the knowledge that such measures have been taken so that they may work without fear of injury to themselves and others. 72 Special deterrence must also assume some significance. The defendant on the evidence, is unemployed, however there is nothing in the evidence to indicate that the defendant would not, or could not, in the future, be a company director, or act in a managerial capacity in the transport, storage and packaging industry. In these circumstances I propose to include as a component of the penalty or small amount for specific deterrence: Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; 99 IR 29 at 61. Consequences of the breaches
73 Here, the death of Mr Cook manifests the degree of seriousness of the risk to safety to which Mr Cook and others at the premises were subjected. This is because of the complete lack of any training, instruction or supervision or procedures in an environment in which heavy items of plant were transported and stored and heavy machinery utilised such as a forklift, at the time of the offence. This factor contributes to the seriousness of the offence: Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61, at [93], [94] and [95]. Subjective factors
74 The prosecutor has conceded that the defendant entered a plea of guilty at a relatively early stage of the proceedings, although not at the earliest opportunity. The defendant contended that he pleaded guilty to the Application for Order on 18 May, 2004, and, that this should be regarded as a relatively early plea justifying a discount between 20 and 25 percent. 75 The Court file confirms that the pleas of guilty were entered on 18 May, 2004. The pleas appear to have been entered shortly after the co-defendant, Mr Steel, was served with the brief of evidence. 76 The pleas of guilty entitle the defendant to a discount of his sentence in accordance with the principle outlined in R v Thompson; R v Houlton 49 NSWLR 383; 115 A Crim R 104. 77 Although there is no requirement to quantify the discount, sentencing judges are encouraged to do so: R v Thompson; R v Houlton. This was emphasised by the Court of Criminal Appeal, New South Wales, in R v Shenton (2003) NSWCCA 346, 17 November, 2003 at [5], [11] and 12. 78 I consider that in the circumstances here, an appropriate discount for the utilitarian value of the plea is 25 percent. Other subjective factors
79 The defendant is also entitled to a measure of leniency on the basis that he has no prior convictions. In addition, the prosecutor has conceded that the defendant co-operated with the WorkCover Authority in relation to its investigation into the offences. The defendant, through Top Container also implemented a number of post-accident safety measures for which credit must be given. The defendant has also expressed his remorse in relation to Mr Cook's tragic accident. The defendant also accepted fully his responsibilities in relation to the operations at the premises. Capacity to pay a fine
80 One further matter that requires attention is the capacity of the defendant to pay a fine. According to the defendant he is unemployed, has very small cash holdings, and owns no property. He has lost his business. Details of the defendant's current bank accounts, and his assets were provided to the Court in his second affidavit sworn 6 December, 2004. Those details tend to confirm that the defendant has little in the way of assets. The defendant also annexed a copy of his 2003 Income Tax Return to his first affidavit. The return shows a taxable income for that year in the amount of $18,290. 81 The inference that the Court is no doubt asked to draw from this evidence is that the imposition of a large penalty in the circumstances would be futile. Such a proposition may however be overridden by the demand in the public interest for a substantial penalty as a reflection of the overall seriousness of the offences. 82 In Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209, Wright J, the President, dealt with the significance of the defendant's capacity to pay in the sentencing process as follows:- The financial position and more particularly the means of the defendant should be taken into account in relation to the question of penalty. Otherwise it is inappropriate to consider the fact or amount of legal costs, consulting and other fees. In any event, it was not submitted that I should. I should, as submitted by counsel for the informant, consider not only the financial information included in the correspondence from the accountants, but also the defendant's asset position. 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. The penalty imposed will reflect the consideration given to this aspect as discussed above. I have also had regard to the submissions filed by the informant in respect of the additional affidavit and issues arising from it. Further, I have considered and applied the authorities referred to therein, particularly Haynes v C I & D Manufacturing (at 457-458); R v Sgroi (1989) 40 A Crim R 197 and Rahme v The Queen (1989) 43 A Crim R 81. Finally on this aspect, I indicate that I do not consider that the penalties imposed are beyond the means of the defendant.
83 Similarly, in WorkCover Authority of New South Wales (Inspector Benbow) v Converquip Pty Limited (2001) 106 IR 258 at 271-272, his Honour, the President observed:- I accept that the financial situation of the defendant, at least when compared to many cases which come before the Court, is quite unusual. I accept that it has occurred independently of these proceedings or the defendant's culpability under the Act. That is, I accept that the situation of the defendant has arisen from commercial decisions taken bona fide by those controlling it on the basis that the steps were considered to be in the defendant's interests. Nevertheless, to impose a penalty entirely out of step with the objective circumstances of the offence, by having regard as the crucial consideration to the evidence before the Court as to the defendant's financial circumstances, would, I consider, be inconsistent with the role of the Court and would, in particular, represent a failure to impose a sentence with appropriate regard to the importance of deterrence in the sentencing process. In this case general deterrence has particular relevance. 84 In other words, even if it be proved that a defendant has limited financial means, the objective circumstances of the offence may nevertheless dictate a heavy penalty. Principle of Totality
85 The principle of totality arises in this case. The principle and its application has been analysed in Crown in Right of the State of New South Wales (Dept of Education and Training) v Keenan (2001) 105 IR 181 at [36]-[38]: [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 [ The Queen (1988) 166 CLR 59]. 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. In accordance with Pearce , we must first consider the appropriate penalty for each offence, assessed separately.
86 In the circumstances of this case the defendant has been charged and pleaded guilty to two offences under different provisions of the 2000 Act. Each offence, however, alleges almost identical failures to ensure the safety of workers, in particular, Mr Cook, and the factual background pertaining to each offence is identical. I propose to approach the application of the principle of totality accordingly. 87 I consider an appropriate penalty in each case, allowing a discount in relation to each offence to reflect the subjective factors in mitigation, to be $17,500. The penalties should be apportioned equally for each offence as follows: 1. In Application of Order No IRC 5370 of 2003 the defendant is fined $8,750. 2. In Application for Order No IRC 5364 of 2003 the defendant is fined $8,750. Penalty and Orders
88 Taking into account the maximum penalty, the objective seriousness of the offences, the role of the defendant as sole director of the two corporate defendants, the discount for the subjective mitigating factors, including the early pleas of guilty, the defendant's capacity to pay a fine, and the principle of totality, I make the following orders: 1. In Application for Order No IRC 5366 of 2003 the defendant is found not guilty, and, the Application for Order is dismissed. 2. In Application for Order No IRC 5370 of 2003 the defendant is found guilty, convicted, and fined $8,750 with a moiety thereof to the prosecutor. 3. In Application for Order No IRC 5364 of 2003 the defendant is found guilty, convicted, and fined $8,750 with a moiety thereof to the prosecutor. 4. The defendant is to pay the prosecutor's costs as agreed, or, in the absence of agreement, as determined by the Court. ooo000ooo
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.
Inspector Ken Kumar
Francis James Burn
(2000) 49 NSWLR 610
(2001) 105 IR 181
(1999) 92 IR 188
(2004) 135 IR 166
(2001) 106 IR 258
(2003) 123 IR 121
(1998) 194 CLR 610
(1988) 166 CLR 59
Matter No IRC 5366 of 2003: Defendant found not guilty, application dismissed. Matter No IRC 5370 of 2003: Defendant found guilty, convicted, and fined $8,750 with moiety to prosecutor. Matter No IRC 5364 of 2003: Defendant found guilty, convicted, and fined $8,750 with moiety to prosecutor. Defendant to pay prosecutor's costs.