Inspector Kumar v Steel [2006] NSWIRComm 95 | Case summary

1 This appeal arises out of tragic circumstances when a forklift driver sustained fatal injuries whilst stacking steel crates containing stainless steel welded pipes. The accident occurred on 26 September 2001 the premises in Chipping Norton, New South Wales. 2 The premises were occupied by Kerelax Pty Ltd ("Kerelax") which operated and managed them as a warehouse facility. Persons who performed work at the facility, including the forklift driver were employed by an associated company, Top Container Transport Pty Ltd ("Top Container"). 3 The accident happened when crates containing stainless steel welded pipes fell. They had been stacked six crates high and this had created a dangerous situation which brought about the driver's death. It was uncontested that Top Container was guilty of a breach of the Occupational Health and Safety Act 2000 ("the Act"), such breach being a serious one in that it had no system of work in place for stacking crates. It had not undertaken a risk assessment, it had not provided sufficient supervision of employees, nor had it provided training. 4 The appellant in these proceedings, Inspector Ken Kumar of the WorkCover Authority of New South Wales, charged Top Container and Kerelax with breaches of the Act. Both pleaded guilty. A fine of $140,000 was imposed by her Honour, Backman J on Top Container and $135,000 on Kerelax. The appellant also charged Francis James Burn and the respondent in these proceedings, Donald William Steel, with a breach of s 8 of the Act pursuant to s 26 (1) of the Act. 5 Section 26(1) of the Act is in the following terms: s 26 Offences by corporations; liability of directors and managers. (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b)he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 6 Mr Burn was the sole director of both Kerelax and Top Container. He was ultimately responsible for all systems of work and work methods employed by Kerelax. Mr Burn was charged with two breaches, one by reference to his involvement in Kerelax and the other by reference to his involvement in Top Container. He pleaded guilty to both breaches. After applying the principle of totality, Backman J fined him a total of $17,500 for both offences. 7 Mr Steel was the General Manager of Top Container. He was charged with one offence. He also entered a plea of guilty and was fined by her Honour the sum of $5,000 and ordered to pay the costs of the appellant as prosecutor. 8 The appellant has appealed her Honour's judgment on the basis that the penalty of $5,000 was manifestly inadequate. The judgment of Backman J, delivered on 23 June 2005, contains a number of observations concerning the role performed by Mr Steel in connection with the Top Container business. These facts do not appear to be in dispute. 9 As has previously been observed, overall responsibility for all systems of work and work methods employed by both Kerelax and Top Container resided in Mr Burn. Mr Steel became employed by Kerelax in February 2001 as a debtors clerk and worked out of its Brisbane office. He identified a number of financial and operational problems including the financial viability of Kerelax by reason of the operations of its Sydney branch. 10 In about March 2001 Mr Steel was appointed the financial controller of Kerelax and a month later began attending the Sydney branch two days a week to manage debtor problems, and other problems involving the company's financial records. He was then appointed general manager of Kerelax for a two year fixed term and attended the Sydney branch two and a half days a week. 11 In July 2001 Mr Steel became employed by Top Container which is an associated service company of Kerelax. In about August 2001 a Mr Lyndsay Crowley was appointed Manager of the Sydney branch of the business and commenced work there on 3 September 2001. Mr Steel spent a few days with him handing over his financial responsibilities and thereafter did not attend the Sydney branch until some time after 26 September 2001. 12 Mr Steel said that, although he did not have overall responsibility for occupational health and safety matters involving Top Container, he took an active role in those matters at the Sydney branch because matters of this kind were brought to his attention by suppliers and by employees who wished to purchase safety equipment, and because of safety matters being brought to his attention whilst he worked with Keralex. He said that personally he had a high commitment to occupational health and safety matters throughout his professional life. 13 It was also generally accepted that Mr Steel was one of several persons associated with the Chipping Norton premises who had responsibility for occupational health and safety matters although he had primary responsibility for financial matters. 14 In the course of delivering judgment, her Honour referred to the overall role played by Mr Burn in the activities of Keralex and Top Container, the more limited role undertaken by Mr Steel at the Chipping Norton premises, being concerned with financial rather than operational matters, and the more managerial role at the Sydney branch undertaken by Mr Crowley. 15 The maximum penalty which could be imposed by her Honour was $55,000. In determining the appropriate penalty, her Honour focussed on the culpability of Mr Steel. In doing so, her Honour followed observations made by the Full Bench of this Court in Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61 (see in particular paragraphs [133] to [143]). 16 Her Honour concluded that Mr Steel's culpability fell "well below" that of Mr Burn. Although he played a role in connection with occupational health and safety matters, the principal focus of his attention was financial matters and there were others, particularly Mr Burn and later Mr Crowley, who had more responsibility in the area of occupational health and safety. Furthermore, Mr Steel was only involved for a very short time in any managerial role at the Chipping Norton site. 17 Her Honour also took into account subjective matters, including the early plea of guilty, the fact that Mr Steel was aged 72 and on the brink of retirement (which obviously can be taken into account in terms of deterrence) and that Mr Steel was suffering from deteriorating health as a result of stress caused by the proceedings and caused by the death of the employee concerned. 18 Furthermore, Mr Steel had no prior convictions, had co-operated fully with the WorkCover Authority of New South Wales in connection with its investigations and he had "a long and distinguished professional career with strong commitment to occupational, health and safety matters in the workplace". 19 The circumstances which attend a consideration of a prosecutorial appeal on the basis that a sentence imposed was manifestly inadequate are set out in a number of Full Bench decisions of this Court. We refer by way of example to WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Ltd (2003) 127 IR 60. 20 We acknowledge that her Honour dealt with five prosecutions, one against each of the corporations, two against Mr Burn and one against the respondent. There was no appeal lodged against any of the other four penalties imposed. Her Honour was required to carefully assess the respective culpability of each of the defendants and in doing so to fix an appropriate fine against each defendant. In particular, her Honour would have had regard to the fact Mr Burn was charged with two offences in assessing the single offence with which the respondent is charged. 21 In these circumstances we can detect no error in the approach adopted by her Honour to the sentencing process or to her Honour's reasoning. Whether and to what extent the penalty imposed was manifestly inadequate is a matter of judgment. Whilst we may have imposed a penalty of a higher amount than fixed by her Honour, we are unable to conclude that in fixing a penalty of this amount her Honour's exercise of discretion miscarried so as to warrant interference on appeal. We conclude therefore that the appeal should be dismissed. 22 The respondent did not appear at the hearing of the appeal and did not seek an order for costs. We make no order as to the costs of the appeal. 23 The Court therefore makes the following orders in this appeal: (1) Appeal dismissed. (2) There shall be no order as to the costs of the appeal.

Inspector Kumar v Steel

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Judgment (14 paragraphs)

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Cases Cited (2)