Inspector Kent v Duct Master Pty Ltd

LEGISLATION CITED: Occupational Health and Safety Act 2000

Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Limited (1999) 92 IR 8 Dunlop Rubber Australia Limited v Buckley (1952) 87 CLR 313 Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 Inspector Alan Jeffrey Broomham v Radenko Maletic [2007] NSWIRComm 108 Inspector Helen Clothier v Tracy McIntyre trading as Corambie Pastoral Company [2007] NSWIRComm 40 Inspector Barry Sutcliffe v T & F All States Pty Ltd [2009] NSWIRComm 19 Inspector Crispian Jelley v Stephen Norman Dupond [2007] NSWIRComm 316 Inspector Daniel Beavon v Martin Gerald Barratt [2007] NSWIRComm 48 Inspector David Waterhouse v David Burgun [2007] NSWIRComm 178 Inspector David Webster v AGG Concreting Pty Ltd, Darryl Brian Coffey and Steven Stathis [2009] NSWIRComm 55 Inspector Denis Macready v Jae Hoon Chang [2007] NSWIRComm 21 Inspector Dugdale v Sara Lee Australia & NZ Pty Ltd [2009] NSWIRComm 133 Inspector Elizabeth Benbow v Planada Holdings Pty Limited [2001] NSWIRComm 275 Inspector Graeme Aldred v Douglas Charles Crane [2008] NSWIRComm 238 Inspector Hugh Corner v John Avalon Barrie Shevlin [2008] NSWIRComm 63 Inspector Richard Mulder v Mark Joseph Griffith [2008] NSWIRComm 36 Inspector Ian Batty v Brian John Goldsmith [2009] NSWIRComm 72 Inspector Ian Batty v Brian John Goldsmith. Prosecution under s 8(1) by virtue of s 26(1) of the OHS Act 2000 [2009] NSWIRComm 72 Inspector Ian Batty v John Bernard Cross [2009] NSWIRComm 60 Inspector John Forster v Jon Mellor [2009] NSWIRComm 38 Inspector Maree Davidson v Russell Alan Williams [2009] NSWIRComm 64 Inspector Mayell v Borce Ivanovski and Global Crown Constructions Pty Limited [2009] NSWIRComm 49 Inspector Melissa Chaston v Alan Yazbek [2008] NSWIRComm 58 Inspector Peter Beacham v Ji Liang Gao [2009] NSWIRComm 100 CASES CITED: Inspector Richard Mulder v Giuseppe Girotto [2008] NSWIRComm 94 Inspector Robert Wilkie v Allan Murphy [2009] NSWIRComm 7 Inspector Robert Wilkie v YSF Pty Limited & Anor [2009] NSWIRComm 7 Inspector Ross Wolf v Rockdale Beef Pty Limited [2008] NSWIRComm 110 Inspector Wayne James v Chek Ly & Ors [2007] NSWIRComm 315 Inspector Stephen Cooper v Assad Saliba [2007] NSWIRComm 123 Inspector Stephen Jones v Narelle Pamela Davies [2008] NSWIRComm 12 Inspector Stephen Jones v Sergio Rorato [2008] NSWIRComm 13 Workcover Authority of New South Wales (Inspector Vosu) v Ace-Semi Trailer Sales Pty Ltd [2005] NSWIRComm 222; (2005) 145 IR 76 Inspector Wayne James v Sunny Ngai & Ors [2007] NSWIRComm 203 Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 McLean v Tedman and Another [1984] HCA 60; (1984) 155 CLR 306 Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Robert Borkowski [2009] NSWCCA 102 Regina v S Y & Anor [2003] NSWCCA 291 WorkCover Authority (NSW) (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd [2000] NSWIRComm 142; (2000) 49 NSWLR 700 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Anor (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Davidson) v Tony Favro [2007] NSWIRComm 201 WorkCover Authority of New South Wales (Inspector Macready) v Jeffrey Ronald Forsyth [2007] NSWIRComm 132 WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 WorkCover Authority of NSW (Inspector Glass) v ACI Operations Pty Limited [1994] NSWIRC 11 WorkCover Authority of New South Wales (Inspector Farrell) v Morrison (No. 2) [2002] NSWIRComm 27; (2002) 112 IR 312

Mr D B O'Neil of counsel (Prosecutor) WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: Mr A R Moses SC (Defendants) Turner Freeman Lawyers

Prosecution under s 8(1) of the Occupational Health and Safety Act 2000

Prosecution under s 8(1) by virtue of s 26(1) of the Occupational Health and Safety Act 2000

Prosecution under s 8(1) by virtue of s 26(1) of the Occupational Health and Safety Act 2000

Prosecution under s 8(1) by virtue of s 26(1) of the Occupational Health and Safety Act 2000

1 The incident giving rise to these prosecutions occurred on a night shift on 9 September 2006 at the premises of Duct Master Pty Ltd ('corporate defendant'), 18 Eddie Road, Minchinbury. Mr Eteuini Vili was employed by the corporate defendant as a machine operator using a blow moulding machine to manufacture rigid plastic ducts for the air conditioning industry. Whilst he was operating the machine, Mr Vili placed his left hand in the machine and the machine mould closed on his left hand. Mr Vili remained trapped in the machine for about 43 minutes. He received a severe crush injury to his left arm and broken bones in the arm. As a result of the injuries Mr Vili lost the end of his first finger and thumb near the joints. 2 In the amended application for an order it was alleged by the prosecutor, Inspector Michael Kent of the WorkCover Authority of New South Wales, that the corporate defendant failed to: ensure the health, safety and welfare at work of all its employees and in particular, Eteuini Vili, contrary to s8(1) of the Occupational Health and Safety Act 2000.

3 The particulars of the charge were that: a) The defendant failed to adequately guard plant, in particular a Jagmohan Blow Moulding Machine, used by its employees so as to prevent contact by those persons with the dangerous parts of the plant;

b) The defendant failed to ensure that there was a system of work in place for the use of the Jagmohan Blow Moulding Machine that was safe and without risks to health;

c) The defendant failed to provide adequate supervision, training, instruction and information to its employees working on or with the Jagmohan Blow Moulding Machine;

d) The defendant failed to adequately maintain plant, in particular a Jagmohan Blow Moulding Machine, used by its employees;

e) The defendant failed to conduct an adequate risk assessment in respect of the Jagmohan Blow Moulding Machine to identify potential risks. 4 The corporate defendant pleaded guilty to the amended charge. 5 The three personal defendants, Frederick James Baker, Ross Alan Weightman and Maneck Jal Patel, were directors of the corporate defendant who shared responsibility for occupational health and safety and a range of other operational matters associated with the business. It was alleged by the prosecutor that each of the personal defendants, by virtue of s 26(1) of the Occupational Health and Safety Act 2000 ('the Act'), contravened s 8(1) of the Act. The particulars of the amended charges against each of the three personal defendants were relevantly the same as those alleged against the corporate defendant. The three personal defendants pleaded guilty to the amended charges. Evidence

6 An agreed statement of facts and further agreed facts were tendered by the prosecutor. Annexed to the agreed statement was: (a) a Factual Inspection Report of Inspector John Lennon dated 20 September 2006; (b) 18 Photographs taken by Inspector Lennon on 9 September 2006; (c) 5 Photographs taken by Inspector Kent on 12 September 2006; (d) a DVD containing footage of incident (which was viewed by the Court); (e) a report of Gavin Baker of GMB Electrics (NSW) Pty Ltd, who was asked by the corporate defendant to inspect the blow moulding machine on 9 September 2006 following the incident; (f) extract from AS 4024.1 of 1996 - Safeguarding of Machinery; (g) extract from AS 4024.2 of 1998 - Safeguarding of Machinery; and (h) prior convictions certificates relating to the defendants indicating there were no prior convictions in respect of any the defendants. 7 For the defendants, affidavits of the three personal defendants were tendered, as well as an affidavit of John Matthews, the defendant's production supervisor. The personal defendants were required for cross-examination. 8 The moulding machine was described in the agreed facts: It collected recycled plastic pellets and heated them until they were in a molten state. The operator of the machine stood on a platform at the front of the machine to operate it. Located on the machine was a mould. The mould was divided vertically and consisted of two halves. Each half could be moved horizontally by hydraulic rams. To begin the manufacturing process the moulds were moved towards each other. As the moulds closed molten plastic came down into the moulds from above. The molten plastic was fed down into the machine. The molten plastic descended over a blow pin and the two halves of the mould were hydraulically propelled towards each other. The molten plastic descended directly over the blow pin. When the moulds met air was injected into the mould and a rigid duct was formed. Once this process was complete the two halves of the mould would separate and the rigid duct was removed by the operator. 9 It was about 1.55 am when Mr Vili placed his left hand in the machine and the machine mould closed on Mr Vili's left arm. This was all visible on the CCTV footage viewed by the Court. Mr Vili could not reach the emergency button or any other machine controls, to release himself from the machine. He struggled to release himself until about 2:24 am. At this time Mr Vili pulled a water hose, which was located on the machine above him, from the machine and commenced to spray water. The water hose was located above where Mr Vili was trapped by the machine. Following Mr Vili removing the water hose and spraying water an alarm was set off. The machine water chilling unit emitted an audible signal when the machines water hose was disconnected from the clamping unit of the machine. At approximately 2:32 am Mr Jyothish John heard the alarm and went to the moulding machine. Mr John found Mr Vili trapped in the machine. Mr Vili asked Mr John to stop the machine. Mr John did not know how to do this as he was not experienced on this machine. Mr John called for further help from another employee, Mr Lukose Edavadikal. He was able to release Mr Vili from the machine at about 2:38 am. 10 The machine was fitted with two yellow vertical strips on each side of the front of the machine where the machine opened and closed. These two strips formed part of a device described as the 'photo guard' (also referred to as a sensor, detector and safety gate) that produced a screen of infra red beams pitched at suitable distances over the operating area. When an operator enters the danger area, these beams are obstructed. Electronic circuits which continuously scan for obstruction immediately de-energise the output relay and shut off power to the machine. 11 The problem, however, was that at the time Mr Vili became trapped in the machine the key to operate the photo guard's control panel was in the control panel and was in the bypass position. The machine could be worked without the sensor working if it was put in bypass mode. The control panel was located on the machine and it was an agreed fact that the key was left permanently in the control panel. Thus, at any time the key could be switched to bypass mode and the protection afforded by the photo guard would be rendered entirely ineffective. 12 Following the incident Mr Gavin Baker, an electrician and a director of GMB Electrics, inspected the machine to test the photo guard on behalf of the corporate defendant. Mr Baker forwarded a report of his inspection to WorkCover. The report was in evidence. Mr Baker found that the safety gate of the machine was out of alignment which would have prevented the mould from closing. Mr Baker realigned the safety gate and tested the machine and the safety gate was found to be operating correctly, preventing the closing of the mould when the key position was in the on position. It was noted that when the key was in the bypass position the safety gate was bypassed and the mould could open and close regardless of anything passing through the gate way. Mr Baker recommended the safety gate be set to the on position and the key removed from the machine to prevent the machine being set to the bypass position. It is not known whether the safety gate was out of alignment at the time Mr Vili became trapped or it occurred whilst Mr Vili was attempting to free himself, or even later, but prior to Mr Baker's inspection. 13 It follows that it is not known whether because of the misalignment of the safety gate the key was in the bypass position so that work could continue on the shift in question, or whether it was a practice to leave the key in the bypass position or whether the operator turned the key to bypass just prior to him putting his hand in the machine to make the plastic come out straight. The CCTV footage was not clear enough to reveal whether this last action was performed. 14 Other agreed facts were that: · Mr Vili was aware of the machine's sensors and the operation of the sensors. · Employees whose duties required them to operate the machine received hands on training in its operation from other workers who operated the machine. · The training provided was not documented. There was no formalised documented procedure to ensure employees were fully conversant with the machine. · Duct Master did not have a documented safe working procedure for the machine. · No person was responsible for the key.

· As a result of his injuries Mr Vili was unable to return to his duties with Duct Master and his employment has been terminated.

· Subsequent to the incident the machine was taken out of service and sold overseas. 15 The corporate defendant was established by Mr Baker and Mr Weightman in about 1984. Mr Patel became a director in 1999. In September 2006 the corporate defendant employed over 50 employees. The workforce is now about 30 employees. 16 The blow moulding machine was purchased from the Jagmohan company in India in or about March 2005 and was shipped to Australia. The corporate defendant lost approximately just under $400,000.00 as a result of decommissioning the machine and selling it for $25,000.00 This arose out of a desire of the directors to avoid a repeat of the incident. 17 The directors gave evidence that: (a) The corporate defendant operates on an overdraft facility of $200,000 of which it is has used $160,000; (b) The corporate defendant does not have bank account deposits upon which it could call upon to pay any fine; and (c) Each director defendant is a 1/3 shareholder in the corporate defendant which essentially operates as a partnership. Any fine imposed on the defendant corporation will ultimately be met one way or the other by funds which would have otherwise been for the benefit of the director defendants.

There was also evidence that the corporate defendant has net assets of about $3 million. Consideration

18 Section 26(1) of the Act relevantly provides that if a corporation contravenes any provision of the Act, each director of the corporation is taken to have contravened the same provision unless the director satisfies the court of one of the defences set out in s 26(1)(a) or (b). In this case, the directors do not seek to take advantage of any defence and plead guilty to the same particulars as those in respect of which the corporate defendant pleaded guilty. 19 There may have been some basis for distinguishing between the respective culpabilities of the directors given their operational responsibilities. The prosecutor, albeit only very faintly, suggested there may be grounds for differentiation. However, it was put by Mr Moses of senior counsel for all of the defendants that no distinction should be made and that the directors should be treated as equally culpable. I propose to take that course. In doing so, I note the maximum penalty for the corporate defendant is $550,000 and $55,000 for the personal defendants. The importance of the maximum penalty was explained in Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [31].

20 The defendants were charged with multiple failures to ensure the safety of employees, particularly Mr Vili. Given the evidence that the key on the control panel controlling the photo guard was left permanently in position, the risk was that an operator or some other person would turn the key to the bypass position thereby exposing the operator to injury whilst operating the machine. This is what occurred. Having become trapped on a night shift Mr Vili was unable to reach the controls to free himself and spent a distressing, and no doubt painful, 43 minutes waiting to be freed. If he had not hit upon the idea of using water to set off an audible alarm, it is not known how long he may have remained trapped. 21 Leaving the key in position was an overwhelming temptation for employees to take short cuts and thereby place themselves in danger. When this is considered with the fact that Mr Vili worked alone without any means of freeing himself once trapped, or being able to raise the alarm, it created an extraordinarily grave risk. 22 To add to the gravity of it, the risk was plainly foreseeable if not blindingly obvious. That is, through carelessness, inadvertence or haste a person might turn the key to the bypass position and continue operating the machine. Employers have been warned time and time again, through decisions of this Court and its predecessors, that their obligations in respect of ensuring safety extends to the hasty, careless, inadvertent, inattentive, or unreasonable employee: Dunlop Rubber Australia Limited v Buckley (1952) 87 CLR 313 at 320; McLean v Tedman and Another [1984] HCA 60; (1984) 155 CLR 306 at 311 - 312; WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248; WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd [2000] NSWIRComm 142; (2000) 49 NSWLR 700 at 722. Further, that employers should be 'on the offensive to search for, detect and eliminate, so far as reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time at the workplace': WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 at 85. 23 Although the damage or injury caused by the breach does not, of itself, dictate the seriousness of the offence or the penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences. In such a case, the occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk: See Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]. See also Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [94] and [95]; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Anor (2000) 95 IR 383 at 428; and Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]. 24 The injury caused to Mr Vili was not in the most serious category (cf Workcover Authority of New South Wales (Inspector Vosu) v Ace-Semi Trailer Sales Pty Ltd [2005] NSWIRComm 222; (2005) 145 IR 76 at [50]) and it is not clear on the evidence that it could have been more serious, but Mr Vili did receive a severe crush injury to his left arm and broken bones in the arm. As a result of the injuries Mr Vili lost the end of his first finger and thumb near the joints. The consequences of the breach indicate that the risk was serious enough to warrant a penalty at the lower end of the mid range. 25 The existence of simple and straightforward remedial steps which could have been taken by the defendant to avoid the risk to safety are relevant to assessing the seriousness of the offence: See Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Limited (1999) 92 IR 8 at 27; WorkCover Authority of NSW (Inspector Glass) v ACI Operations Pty Limited [1994] NSWIRC 11; Inspector Elizabeth Benbow v Planada Holdings Pty Limited [2001] NSWIRComm 275. In the present case, the available remedial step was one of the simplest imaginable: removal of the key. 26 Failure to ensure safety by the absence, or inadequate guarding, of machinery is a commonplace offence in this jurisdiction. For some recent examples see: Inspector Dugdale v Sara Lee Australia & NZ Pty Ltd [2009] NSWIRComm 133; Inspector Ian Batty v Brian John Goldsmith. Prosecution under s 8(1) by virtue of s 26(1) of the OHS Act 2000 [2009] NSWIRComm 72; Inspector Barry Sutcliffe v T & F All States Pty Ltd [2009] NSWIRComm 19; Inspector Robert Wilkie v YSF Pty Limited & Anor [2009] NSWIRComm 7; Inspector Ross Wolf v Rockdale Beef Pty Limited [2008] NSWIRComm 110; Inspector Wayne James v Chek Ly & Ors [2007] NSWIRComm 315; and Inspector Wayne James v Sunny Ngai & Ors [2007] NSWIRComm 203. 27 The incidence of guarding offences suggests that general deterrence should be a significant element of the penalty in this case. Moreover, the incident in this case demonstrates how easily it is to overlook an obvious danger: on its face, the machine was well guarded by a photo guard. But the guard could be turned on and off at will by any person. This kind of oversight, which is so easily done without sufficient thought for the consequences, needs to be brought to the attention of employers through the imposition of an appropriate penalty: see Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388. 28 As for specific deterrence, the corporate defendant remains in business but it has disposed of the blow moulding machine. Mr Patel and Mr Baker remain active directors of the corporate defendant. Mr Weightman has retired from active employment with the company but he remains a director and attends at the plant from time to time and attends board meetings. The incident, I accept, had a profound effect on the directors and they sold the offending machine to avoid a repeat of what occurred. I do not propose to include in the penalty a significant element for specific deterrence because I do not believe the risk of re-offending is high. 29 Whilst I have been critical of the defendants' failure to ensure safety, and deservedly so, that does not translate into an offence of the most serious kind, attracting a penalty at the highest end of the scale. In considering the objective seriousness of the offence one must have regard to the fact that despite the failures the defendants did not ignore safety. The business had been operating for 22 years before the Vili incident occurred without coming to the notice of WorkCover; the machine had an appropriate photo guard in place; the corporate defendant had engaged a safety consultant in 2004; it had a written safety policy, maintained a hazard register, conducted risk assessments (but not an adequate one on the blow moulding machine) and operated a safety committee. Regrettably, however, in my assessment, the directors did not exercise sufficient due diligence to ensure the corporate defendant's safety policies and procedures were actually put into effect on the shopfloor to the necessary extent. What is more, the failure to conduct an adequate risk assessment of the blow moulding machine and the failure to provide adequate supervision, training, instruction and information to its employees working on or with the machine - measures which by now should be second nature to all employers conducting undertakings in this State - represented serious breakdowns in the management of occupational health and safety at the Minchinbury site. 30 Turing to the subjective factors, there was some disagreement between the parties about the timing of the guilty pleas and the discount that should be allowed in that respect. Mr O'Neil of counsel for the prosecutor noted that a discount of between 10 and 25 per cent was available for the utilitarian value of a guilty: R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; at [52]. Mr O'Neil noted what the Chief Justice said at [131]: [131] Every part of the complex web of interconnected participants which comprises the criminal justice system will be improved if a greater number of early pleas could be achieved. The benefits include: · Reduce congestion in court lists and permit courts to plan the use of limited resources without overlisting and avoiding the waste of trial court time. · Reduce the waste of the limited resources available to the Director of Public Prosecutions, the Public Defender and legal aid, both by the direct saving of time spent on preparing cases that do not proceed and by the indirect saving of reducing the number of cases not reached due to overlisting. · Reduce the waste of time of witnesses, amongst whom police constitute the largest single category, in preparing to give evidence and, in many cases, appearing on the day of trial. · Reduce the waste of time of jurors who are needlessly assembled for trial. 31 Counsel also referred to R v Harmouche [2005] NSWCCA 398; 158 A Crim R 357 at [39] per Hulme J: [39] That said, the 25% discount for the Respondent's plea was unduly generous. In giving it his Honour seems to have made a mistake commonly seen in this Court that because a plea was entered at the earliest opportunity (commonly shortly after the Crown reduces a charge) an offender is entitled to that discount. Such an approach is to misread R v Thompson and Houlton (2000) 49 NSWLR 383 and to ignore the rationale for a discount of that degree. The Chief Justice made it clear, at [154-5], that the rationale for a 25% discount was the extent of the utilitarian benefit and the complexity of evidence gathering and of any trial which was avoided. Certainly his Honour made reference to a plea being entered at the earliest opportunity but that was in the context to which I have referred and where his Honour was obviously contemplating the committal stage of criminal proceedings where the community would be saved the costs associated with prosecution of the case from (the beginning of) that stage. [40] That what I have said correctly reflects what the Chief Justice said derives support from observations of Hodgson JA, with whose remarks Barr J agreed, in R v Dib [2003] NSWCCA 117 where, dealing with a complaint that only 16.7% had been allowed in the case of a plea entered in response to a lesser charge than originally preferred, his Honour said, at [5 - 6]:- If a plea is entered a long time after a person is first charged, but at a time when a lesser charge is substituted for a greater charge, the advantages to the administration of justice are less, even though the plea may have been made at the earliest opportunity. There is in any event no entitlement to a 25% discount; and the fact that in this situation there are less advantages to the administration of justice can justify a smaller discount. This approach may mean that in some cases an offender may obtain a lower discount just because the prosecuting authorities initially brought a greater charge than that ultimately pursued, so that the delay in the plea of guilty was not the offender's fault. But this is consistent with the nature of the discount as being at least in part a recognition of practical advantages, and not merely a recognition of mitigation of culpability. 32 More recently, the Court of Criminal Appeal in R v Robert Borkowski [2009] NSWCCA 102 felt it necessary to again set out the principles to be applied in relation to a discount for the utilitarian value of a guilty plea. At [32] Howie J, with whom McClellan CJ at CL and Simpson J agreed, stated: [32] It should not be necessary to do so, but, because there appears to be discrepancies in the application of the discount for the utilitarian value of the plea, it is apposite to set out in point form the principles laid down by this Court and to be applied by sentencing courts. Of course these are principles of general application and are subject to the scheme set out in Criminal Case Conferencing Trial Act 2008 and regulations made under that Act:

The discount for the utilitarian value of the pleas will be determined largely by the timing of the plea so that the earlier the plea the greater discount: Thomson at [154]; Forbes [2005] NSWCCA 377 at [116].

Some allowance may be made in determining the discount where the trial would be particularly complicated or lengthy: Thomson at [154].

The utilitarian discount does not reflect any other consideration arising from the plea, such as saving witnesses from giving evidence but this is relevant to remorse: Thomson at [119] to [123]; nor is it affected by post-offending conduct: Perry [2006] NSWCCA 351.

The utilitarian discount does not take into account the strength of the prosecution case: Sutton [2004] NSWCCA 225.

There is to be no component in the discount for remorse nor is there to be a separate quantified discount for remorse: MAK and MSK [2006] NSWCCA 381; Kite [2009] NSWCCA 12 or for the "Ellis discount"; Lewins [2007] NSWCCA 189; S [2008] NSWCCA 186.

Where there are multiple offences and pleas at different times, the utilitarian value of the plea should be separately considered for each offence: SY [2003] NSWCCA 291

There may be offences that are so serious that no discount should be given: Thomson at [158]; Kalache [2000] NSWCCA 2; where the protection of the public requires a longer sentence: El-Andouri [2004] NSWCCA 178.

Generally the reason for the delay in the plea is irrelevant because, if it is not forthcoming, the utilitarian value is reduced: Stambolis [2006] NSWCCA 56; Giac [2008] NSWCCA 280.

The utilitarian value of a delayed plea is less and consequently the discount is reduced even where there has been a plea bargain: Dib [2003] NSWCCA 117; Ahmad [2006] NSWCCA 177; or where the offender is waiting to see what charges are ultimately brought by the Crown: Sullivan and Skillin [2008] NSWCCA 296; or the offender has delayed the plea to obtain some forensic advantage: Stambolis [2006] NSWCCA 56; Saad [2007] NSWCCA 98, such as having matters put on a Form 1: Chiekh and Hoete [2004] NSWCCA 448.

An offer of a plea that is rejected by the Crown but is consistent with a jury verdict after trial can result in a discount even though there is no utilitarian value: Oinonen [1999] NSWCCA 310; Johnson [2003] NSWCCA 129

The discount can result in a different type of sentence but the resulting sentence should not again be reduced by reason of the discount: Lo [2003] NSWCCA 313.

The amount of the discount does not depend upon the administrative arrangements or any practice in a particular court or by a particular judge for the management of trials or otherwise. The last of these principles is derived from the present judgment and is included for completeness. [33] There also appears to be some looseness in the use of the expression "a discount" that is apparent in the exchange between the prosecutor and the Judge set out above. Since Thomson and Houlton a "sentencing discount" should be taken to mean a reduction in the otherwise appropriate sentence by a quantifiable amount due to a specific policy consideration. Such a discount is applied after the otherwise appropriate sentence has been determined. There are two sentencing discounts that have been identified: a discount for the plea of guilty and a discount for assistance. Where both these discounts apply they should be combined: R v SZ [2007] NSWCCA 19; 168 A Crim R 249 at [11]. The High Court has indicated that there should be limited use of "arithmetical deduction" in determining an appropriate sentence: Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [39]. [34] There are also matters that mitigate the sentence. They are taken into account in the general synthesis to determine what is the appropriate sentence before the application of a discount. The mitigating factors include remorse and what has come to be known as the "Ellis discount", although R v Ellis (1986) 6 NSWLR 603 was decided at a time when separate and discrete discounts in sentencing had not been recognised. 33 In Regina v S Y & Anor [2003] NSWCCA 291 Howie J with whom Ipp JA agreed (Whealy J not disagreeing) stated: [86] It does not always follow that a plea is entered at the first reasonable opportunity simply because the plea occurs after negotiations with the Crown once the offender has been committed for trial. Clearly there will be occasions where the nature of the bargain struck does indicate that the offender could not reasonably have been expected to plead guilty before the opportunity was presented to plead to some less serious charge. But that is not always so and it behoves the sentencing judge to look at the situation realistically in determining the value of the plea on the utilitarian basis. Nor is it the case that the same discount applies to all the offences for which the offender is to be sentenced and a proper exercise of discretion requires the judge to discriminate between the offences if it is necessary to do so in order to properly reflect the value of the pleas by the discount given. 34 In the present proceedings, the prosecutor submitted that pleas were not entered until the third mention of the matters before the Court and even then a number of the particulars were to be contested, leading the Court to set the matters down for a two day hearing. At the outset of the first day of the hearing the Court was advised that, subject to leave being granted to amend the applications for orders, the defendants intended to enter pleas of guilty to the amended charges. Leave was granted and pleas were entered without there being any contest to the amended particulars. The amendment to particulars meant that one particular alleging a failure to provide emergency stopping facilities on the machine was deleted and the particular relating to risk assessment was amended to delete reference to a failure to conduct 'any' risk assessment. Mr O'Neil submitted it was 'open to your Honour to give a discount less than the full 25 per cent but I do not say that it is not open to your Honour to give the full discount.' 35 Mr Moses submitted that the defendants entered pleas of guilty to the charges contained in the amended application for orders at the first available opportunity. Apart from the early plea evidencing remorse and contrition, a time consuming and costly hearing was avoided, it was submitted. It was further submitted that unlike the general criminal jurisdiction, costs were awarded to the prosecutor in sentencing proceedings in the Court's occupational health and safety jurisdiction and this had to be taken into account in considering what Spigelman CJ said in R v Thomson at [131].

36 Based on the authorities, in considering the amount of discount to be given for the utilitarian value of a plea of guilty it is clear the Court must have regard to the contribution that the timing of the plea makes to avoiding the waste of time and resources of the sort referred to in R v Thomson and that some explanation of how the discount was arrived at should be provided. The discount of 25 per cent should, in the majority of cases, be reserved for those cases where the timing of the plea provides the greatest utilitarian value. In assessing that value regard would need to be had to the complexity of the issues about which evidence would have to be gathered and adduced. 37 It is recognised, of course, that the waste of time of jurors who are needlessly assembled for trial would not be a relevant consideration in this jurisdiction. On the other hand, if a defendant spends a long time before entering a plea and the prosecutor has expended resources on preparing for a trial, that will be a relevant consideration. If a defendant is served with a brief of evidence and indicates it will plead guilty subject to negotiations over particulars of the charge and those negotiations proceed to the point where a plea is eventually entered without the prosecutor having to expend time and resources preparing for a trial, that will also be a relevant consideration in assessing the amount of discount. 38 However, simply because a defendant waits until the prosecution amends the charge before entering a plea at the earliest opportunity thereafter, that will not, in my opinion, automatically lead to the sentence being discounted by 25 per cent. Some assessment would need to be made about whether the delay in pleading caused an unnecessary waste of time and resources. 39 In that respect, Mr Moses referred to the fact that costs are a feature of the Court's occupational health and safety jurisdiction whereas that is not the case in the general criminal law. This would be a relevant consideration, but the awarding of costs to the prosecutor in sentencing proceedings does not mean that regardless of the timing of the plea the maximum discount should be allowed on the basis that the prosecutor has been compensated for the resources used in the prosecuting the case. Costs, for instance, do not account for a court's time.

40 It seems that the position in this case was that the applications for orders were filed on or about 9 September 2008. At a directions hearing in December 2008 directions were made for the provision by the prosecutor of further particulars and that the defendants were to make any representations to the prosecutor by 30 January 2009. The matter was stood over until 23 February 2009 on which occasion it was adjourned for what reasons is not known. The defendant subsequently indicated in March 2009 that a plea of guilty would be entered to a number of the particulars and not others. Negotiations between the parties ensued and on or about 24 April 2009 the prosecutor indicated that two of the particulars objected to by the defendants would not be pressed. On or about 4 August 2009, further amendments were made to the particulars. There were also negotiations concerning an Agreed Statement of Facts that led to the late withdrawal of a serious factual allegation against the defendants on 10 August 2009. 41 The indication by the defendants that they were prepared to enter a plea subject to amendments to the particulars and such amendments were subsequently made, suggests that the defendants should receive the benefit of a substantial discount. However, the defendants' objections to the particulars were not entirely resolved until early August and after the matter had been set down for a two day hearing over contested particulars. One of the particulars to which the defendants objected was that alleging there had been no risk assessment. That was amended to 'no adequate risk assessment'. In my view that was a significant amendment, having the effect of mitigating the objective seriousness of the offences in this case. 42 Having regard to all of the circumstances, I consider that the discount for the utilitarian value of the guilty pleas should be at the high end of the scale. 43 It was accepted by the prosecutor that the defendants cooperated with the WorkCover Authority. The corporate defendant also commissioned a report on the deficiencies concerning the machine and instructed the entity which it retained to provide a copy of the report to the WorkCover Authority. That report formed part of the prosecution brief. The defendants also instructed its lawyers to enter into negotiations with the prosecutor's lawyers to draft an agreed statement of facts for the purpose of the sentencing hearing.

44 It was accepted by the prosecutor that the defendants had expressed genuine contrition for the events that occurred on 9 September 2006 and, in particular, the injury to Mr Vili which remains a matter of profound regret. It is clear the defendants have taken responsibility for their conduct and accept that they failed to ensure Mr Vili's safety. 45 Following the incident, the defendants have continued to be committed to improving the occupational health and safety system of the corporate defendant, as demonstrated as to the steps and procedures it has and is implementing. In his affidavit, Mr Baker deposed as follows: Following the injury to Mr Vili, Ductmaster and the company Directors have clearly recognised that our occupational health and safety systems were not adequate and we did not have personnel within the company who had appropriate detailed occupational health and safety knowledge. To help overcome what was recognised as an important and significant deficiency I researched alternatives and then engaged a company called "The Brief Group". The Brief Group are occupational health and safety systems, compliance and culture specialists who are based in Sydney…. The documentation also refers to policies, procedures, training, record keeping and other occupational health and safety implementation actions, all of which are now being taken at Ductmaster. 46 Further, as I mentioned earlier, the injury to Mr Vili led to the subsequent decision to decommission and sell the machine. I also referred earlier to the fact that the corporate defendant lost approximately just under $400,000 as a result of decommissioning the machine and selling it for $25,000. This arose out of a desire to avoid a repeat of the incident. Other losses were sustained including loss of work as a result of the decommissioning of the machine. The defendants are entitled to have those matters taken into account in relation to their sentencing: see WorkCover Authority of New South Wales (Inspector Farrell) v Morrison (No. 2) [2002] NSWIRComm 27; (2002) 112 IR 312 at [68]. 47 There was no plea of incapacity to pay any fine that might be imposed, but counsel for the defendants submitted that it was appropriate for the Court to take account of the fact that: (a) The Corporate Defendant operates on an overdraft facility of $200,000 of which it is has used $160,000; (b) The Corporate Defendant does not have bank account deposits upon which it could call upon to pay any fine; and (c) Each Director Defendant is a 1/3 shareholder in the Corporate Defendant which essentially operates as a partnership. Any fine imposed on the Defendant Corporation will ultimately be met one way or the other by funds which would have otherwise been for the benefit of the Director Defendants: see for example Inspector Webster v AGG Concreting Pty Ltd [2009] NSWIRComm 55 at [29] - [32]. 48 That any fine imposed on the corporate defendant will have to be paid by the three directors must be accepted and I should have regard to that fact in imposing penalties on both the corporate defendant and the three directors. In the course of making submissions in this respect, Mr Moses expressed a concern on behalf of his clients that whilst WorkCover was prepared to prosecute directors of small companies they did not show the same preparedness to prosecute directors of large companies or publicly listed companies. 49 The submission was not making any point that was relevant to my consideration in this matter and counsel was, I think, merely venting his clients' frustration at what they saw as inequitable treatment by the prosecuting authority. Nevertheless, I do not feel I can simply ignore the submission.

50 I do not know what WorkCover's attitude or policy is towards the prosecution of directors and managers of large companies. However, I do know that when one looks at the matters where directors have been prosecuted by WorkCover in this jurisdiction over the past three years or so, they have all been directors of relatively small companies. A few examples include the following: Inspector Ian Batty v John Bernard Cross [2009] NSWIRComm 60; Inspector Peter Beacham v Ji Liang Gao [2009] NSWIRComm 100; Inspector Maree Davidson v Russell Alan Williams [2009] NSWIRComm 64; Inspector Ian Batty v Brian John Goldsmith [2009] NSWIRComm 72; Inspector John Forster v Jon Mellor [2009] NSWIRComm 38; Inspector Mayell v Borce Ivanovski and Global Crown Constructions Pty Limited [2009] NSWIRComm 49; Inspector Robert Wilkie v Allan Murphy [2009] NSWIRComm 7; Inspector David Webster v AGG Concreting Pty Ltd, Darryl Brian Coffey and Steven Stathis [2009] NSWIRComm 55; Inspector Stephen Jones v Narelle Pamela Davies [2008] NSWIRComm 12; Inspector Stephen Jones v Sergio Rorato [2008] NSWIRComm 13; Inspector Richard Mulder v Giuseppe Girotto [2008] NSWIRComm 94; Inspector Melissa Chaston v Alan Yazbek [2008] NSWIRComm 58; Inspector Graeme Aldred v Douglas Charles Crane [2008] NSWIRComm 238; Inspector Hugh Corner v John Avalon Barrie Shevlin [2008] NSWIRComm 63; Inspector Richard Mulder v Mark Joseph Griffith [2008] NSWIRComm 36; Inspector Alan Jeffrey Broomham v Radenko Maletic [2007] NSWIRComm 108; Inspector Helen Clothier v Tracy McIntyre trading as Corambie Pastoral Company [2007] NSWIRComm 40; Inspector Daniel Beavon v Martin Gerald Barratt [2007] NSWIRComm 48; Inspector David Waterhouse v David Burgun [2007] NSWIRComm 178; Inspector Denis Macready v Jae Hoon Chang [2007] NSWIRComm 21; Inspector Crispian Jelley v Stephen Norman Dupond [2007] NSWIRComm 316; Inspector Stephen Cooper v Assad Saliba [2007] NSWIRComm 123; WorkCover Authority of New South Wales (Inspector Davidson) v Tony Favro [2007] NSWIRComm 201; WorkCover Authority of New South Wales (Inspector Macready) v Jeffrey Ronald Forsyth [2007] NSWIRComm 132. 51 There may be a quite reasonable explanation as to why prosecutions in this jurisdiction are weighted so heavily against directors of small companies, but it is not immediately apparent to the Court. I have directed the Registrar to provide a copy of this judgment to the prosecuting authority. 52 Having regard to the objective and subjective considerations in these matters I have decided that the appropriate level of penalty to be applied to the corporate defendant is $180,000. This amount is to be discounted by 20 per cent for the utilitarian value of the guilty plea. Each of the directors is to be fined $18,000 with the same amount of discount in each case. 53 There was an issue relating to costs. Mr Moses submitted that the prosecutor should only have 70 per cent of his costs on the basis that there had been a serious allegation put against the defendants in the proposed agreed statement of facts that was subsequently withdrawn on 10 August 2009. Mr Moses contended that a lot of 'time and energy' had been applied by the defendants in making inquiries and taking steps to have the prosecutor amend the agreed facts to withdraw the allegation. 54 I propose to reserve the question of costs and make directions for the filing and serving of evidence and submissions. Orders

55 The Court makes the following orders: (1) The defendants are found guilty and convicted of each offence. (2) In Matter No IRC 1505 of 2008 the defendant is fined an amount of $144,000. (3) In Matter No IRC 1506 of 2008 the defendant is fined an amount of $14,400. (4) In Matter No IRC 1507 of 2008 the defendant is fined an amount of $14,400. (5) In Matter No IRC 1508 of 2008 the defendant is fined an amount of $14,400. (6) In each case, one half of the fine is to be paid as a moiety to the prosecutor. (7) Costs are reserved. (8) If the parties are unable to reach an agreement on costs then: (a) the defendants are granted liberty to file and serve written submissions and affidavit material within 21 days on any order for costs; (b) the prosecutor is to file and serve written submissions and affidavit material within 14 days of being served with the defendants' material referred to in order (8)(a); and (c) the defendants are to file and serve any submissions and affidavit material in reply within 7 days of being served with the prosecutor's material referred to in order (8)(b). (9) The matter will be adjourned to a date to be fixed to hear oral submissions on the question of costs. _______________________

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