Inspector Lai v Rexma Pty Ltd and Another

Industrial Relations Commission (NSW)|2008-07-01|Before: Walton J, Schmidt J, Backman J, Gleeson CJ, Hidden JJ

CITATION: Inspector Lai v Rexma Pty Ltd and Another [2008] NSWIRComm 78

APPELLANT: Inspector Desmond Lai PARTIES: RESPONDENTS: Rexma Pty Ltd Chung Byung Man

CORAM: Walton J Vice-President; Schmidt J; Backman J

Crimes (Sentencing Procedure) Act 1999 Criminal Procedure Act 1986 Industrial Relations Act 1996 LEGISLATION CITED: Occupational Health and Safety Act 1983 Occupational Health and Safety Act 2000 Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998

Barbara Robyn Winchester (1992) 58 A Crim R 345 Beacham v Interface Manufacturing Pty Ltd (2005) 141 IR 416 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Dinsdale v The Queen (2000) 202 CLR 321 Donald James Tolmie (1994) 72 A Crim R 416 Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 Erceg v The District Court (NSW) and Another (2003) 143 A Crim R 455 Gotico Industries Pty Ltd v Benbow (2001) 103 IR 78 Ho v Direct of Public Prosecutions and Another (1995) 37 NSWLR 393 Inspector Dubois v Masters Civil Pty Ltd and Anor [2006] NSWIRComm 180 Inspector Green v Camilleri Properties Pty Ltd (2006) 152 IR 156 Inspector Prasad De Silva v Spicer Axle Australia Pty Ltd [2005] NSWIRComm 278 CASES CITED: Llandilo Staircases Pty Ltd v WorkCover Authority of New South Wales (Inspector Parsons) (2001) 104 IR 204 R v Thompson; R v Houlton (2002) 49 NSWLR 383 Regina v Hans John Tangen (Unreported, Supreme Court of New South Wales, Court of Criminal Appeal, Gleeson CJ, Badgery-Parker, Hidden JJ, 21 June 1996) Ridge Consolidated Pty Ltd v WorkCover Authority of New South Wales (Inspector Mauger) (2002) 115 IR 78 Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143 Scevola v WorkCover Authority (NSW) (Inspector Sealey) (No 2) (2006) 151 IR 75 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 WorkCover Authority (NSW) (Inspector Jones) v Challita (2006) 153 IR 409 WorkCover Authority of New South Wales (Inspector Ankucic) v Crown in the Right of the State of New South Wales (Department of Education and Training) (2002) 112 IR 1 WorkCover Authority of New South Wales (Inspector Glass) v Flexible Packaging (Australia) Pty Ltd (2005) 144 IR 385 WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363 WorkCover Authority of New South Wales v Stephensons Cranes Pty Ltd (2005) 139 IR 324 WorkCover Authority of NSW (Inspector Egan) v ATCO Controls Pty Limited (1998) 82 IR 80

HEARING DATES: 20 March 2008 (Written submissions) 4 April 2008 and 15 April 2008

APPELLANT: Mr C Magee of counsel Solicitors: WorkCover Authority of New South Wales (Mr W Steenson) LEGAL REPRESENTATIVES:

RESPONDENTS: Mr C B Man (Self-represented) Ms J Lee (Interpreter)

CORAM: WALTON J, Vice-President SCHMIDT J BACKMAN J

Application by WorkCover Authority of New South Wales for an appeal against a judgment of Industrial Magistrate O'Shane given on 14 May and 12 July 2007 in Matter Nos. 20387599/06/02, 20387548/06/02 and 20387409/06/02

Application by WorkCover Authority of New South Wales for an appeal against a judgment of Industrial Magistrate O'Shane given on 14 May and 12 July 2007 in Matter Nos. 20387601/06/02, 20387610/06/02 and 20387644/06/02

1 Before the Court are two applications for leave to appeal and appeal brought by the prosecutor at first instance under s 197 of the Industrial Relations Act 1996 against two decisions of Industrial Magistrate O'Shane of 14 May 2007 and 12 July 2007. 2 Each respondent pleaded guilty to three charges before the learned Magistrate. The charges alleged breaches of s 8(1) and s 86 of the Occupational Health and Safety Act 2000 (OHS Act 2000) and s 155 of the Workers Compensation Act 1987. 3 At the time of the commission of the offences the corporate respondent operated a plastic recycling business and employed workers at its factory in Revesby New South Wales. The second respondent was the sole director and actively involved in all aspects of the corporate respondent's operations. On 19 May 2006 Jin Woog Kim, a process worker at the corporate respondent's factory, was working alone in the plastic recycling area, feeding plastic material into the feed chute of a single screw extrusion machine. This machine was regularly operated at the facility to recycle plastic waste material into a string form which was then cut into pellets by another machine. At some stage, Mr Kim attempted to cut the plastic with a knife held in his right hand. As he did so his left hand was drawn into the feed chute, the interior of which housed a single screw mechanism, or auger. Mr Kim's left hand came into contact with the auger which amputated all the fingers of that hand. He approached a co-worker who was in the lunchroom at the time. The co-worker arranged a taxi to take Mr Kim to Bankstown Hospital for emergency treatment. 4 Following an investigation into the incident it emerged that the corporate respondent had known since March 2005 that the machine posed a risk of amputation. Despite this the machine had not been subject to a regular planned preventative maintenance programme. Nor had the corporate respondent implemented any systems or procedures to address workplace safety. At the time of the incident it did not have a copy of the operating manual for the machine. No information, instruction or training had been provided to Mr Kim in the safe operation of the machine. Mr Kim apparently had some knowledge of the machine's operations which he had gained in Korea while working for another company. At the time of the incident he had operated the machine for the corporate respondent for about two years. 5 The corporate respondent also failed to notify WorkCover of the incident within the required period of time of seven days after it became aware of the incident, contrary to s 86 of the OHS Act 2000. 6 When the matters came before the Full Bench for hearing on 20 March 2008 we made orders upholding the appeal and quashing the orders made at first instance. We informed the parties that reasons would be provided at a later stage. Further orders were made for the future disposition of penalty, sentence and costs. Because of some difficulties that we perceived on the part of the person acting as interpreter for the second respondent in understanding and translating the proceedings for the benefit of the second respondent we later reduced our orders to writing, together with some remarks which were intended to provide clarification of the Orders.

Decision at first instance 7 In the sentence proceedings at first instance her Honour referred to the fact that Mr Kim was working alone in an, "apparently isolated workshop" at the time of the incident. Her Honour described Mr Kim's injuries as "serious", and observed that the photographs of the area of the factory where Mr Kim had been working at the time of the incident, "looked like a factory situation where third world conditions prevailed." 8 Her Honour then turned to a number of sentencing principles in the context of breaches of the occupational health and safety legislation, and acknowledged the importance of taking into account, on the question of penalty, the objects and purposes of the legislation, namely, the protection of workers, and the necessity to compel attention to safety issues. A number of objective features were then addressed by her Honour by reference to the evidence. Her Honour made findings based on the evidence that the failure to employ safe working systems had the potential for "very serious consequences"; and, that the risk to safety associated with the operation of the machine was foreseeable. Her Honour noted the failure of the corporate respondent to assess the risks associated with the operation of the machine by an employee working in an isolated area. The seriousness of the offences her Honour found was also demonstrated by the simple and straightforward steps available to the corporate respondent which it could have implemented, but did not, prior to the offences, including a proper identification of the risks to safety, the implementation of safe working procedures, a properly documented safety system, regular consultation with employees and effective communication and supervision of the work at the factory. In relation to these matters her Honour, after noting that the corporate respondent employs a small workforce, emphasised that the statutory obligation to ensure workers are properly informed and that safe procedures are in place for their protection, applies to all employers regardless of the size of the workforce. This latter finding appears to have been made in response to a submission put on behalf of the respondents at first instance that the corporate respondent's workforce was too small to effectively implement the number of safety measures necessary to satisfy the requirements of s 8(1) of the OHS Act 2000. 9 The principles of general deterrence and specific deterrence were also addressed by her Honour who acknowledged, in the context of general deterrence, the importance of compelling attention to occupational health and safety issues, and, in the context of specific deterrence, the necessity to have regard to encouraging a sufficient level of diligence in the future, by a particular offender. 10 Her Honour then directed her attention to the subjective features relied upon by the respondents. In relation to the pleas of guilty she acknowledged that they were entered at an early stage. The respondents had asked for a discount on penalty of 25 per cent in recognition of the utilitarian value of their respective pleas of guilty. Her Honour rejected the request in the following passage extracted from the transcript of the sentencing reasons: Part of the consideration in those cases is the defendant's recognition of the inevitability of conviction. However, as this court commented last week when the pleading was argued, the court should be wary of simply allowing such a scale of discount when a plea is entered. There are a number of considerations which come to the mind of this court. First of all, it is a de facto reduction of the maximum penalty which is provided by legislation and I think courts need to be somewhat wary of pursuing that path with vigour as appears to be developing. There is no doubt that such discounts encourage defendants to plead guilty and yes, as I have already commented, that had a very high utilitarian value, no questions of that but the practice of simply awarding a discount at the rate of 25 per cent in terms of the utilitarian value compromises in my view the degree of contrition that is being expressed thereby. Now, of course, that is an issue which the court cannot have regard to in prospective terms. It is difficult to assess contrition of an accused in circumstances where there is a lot of emphasis placed on the utilitarian value of a plea. The level of contrition, of course, is an issue that may be demonstrated by commitment to ensuring a high level of workplace safety from here on in. 11 The subjective features taken into account by her Honour in the respondents' favour included the respondents' co-operation with WorkCover during its investigation into the incident, and the fact that "some steps" were taken by the respondents to implement workplace safety procedures and policies after the incident. Her Honour then advised the parties that she intended to impose one global penalty against each respondent in respect of the charges. The transcript records a brief exchange between the learned Magistrate and the legal representative appearing for the appellant during which her Honour is advised by the appellant's legal representative that each respondent faces two charges. Her Honour then imposed a penalty of $40,000 on the corporate respondent, and a penalty of $31,750 on the second respondent. 12 On 12 July, 2007 a representative for the appellant appeared before her Honour in relation to the matters. There was no appearance on behalf of the respondents. The listing followed correspondence from the appellant, drawing attention to the "global" penalty imposed. Her Honour advised the appellant's representative that she had made an error in relation to the penalties imposed and proceeded to impose separate penalties for each of the three charges against each respondent as follows: Corporate respondent: (i) s 8(1) OHS Act 2000: $10,000 (ii) s 86 OHS Act 2000: $5,500 (iii) s 155 Workers Compensation Act: $ 5,500

Second respondent: (i) s 8(1) and s 26(1) OHS Act 2000: $ 5,000 (ii) s 86 and s 26(1) OHS Act 2000: $3,000 (iii) s 155 Workers Compensation Act and s 244 Workplace Injury Management and Workers Compensation Act 1998: $3,000 13 There then followed a final brief exchange between her Honour and the appellant's representative during which her Honour asked, "[b]efore we close up shop on this matter ... does that sort out everything?" The appellant's representative replied: "[y]our Honour, it does and my understanding is that in fact the previous penalty amounts you've reworked and replaced with these ones." The result of her Honour's approach was that without any explanation the total penalty of $40,000 first imposed on the corporate respondent was reduced to $21,000 in total and the penalty of $31,750 imposed on the second respondent, was reduced to $11,000. Leave to appeal and grounds of appeal 14 We consider that leave to appeal should be granted in this matter. We have concluded that her Honour's sentencing discretion miscarried with the result that the sentences were manifestly inadequate. The sentences were also based on a number of material errors. 15 In submissions, the appellant identified the three principal grounds of appeal upon which he relied. They were, as set out in the written submissions: (i) "The substance of the appeal primarily goes to whether the penalties imposed by the learned Magistrate were manifestly inadequate having regard to the objective seriousness of the offences and the proper application of the sentencing principles under the OHS Act and WC Act. In particular that the sentences do not adequately reflect the objective seriousness of the offences, particularly by reference to the available scale of penalties.

(ii) The learned Magistrate also erred in failing to give adequate reasons for the sentences imposed.

(iii) The learned Magistrate, misapplied the sentencing principle relating to totality, in circumstances where the offences did not themselves have the requisite degree of common elements." 16 We propose to separately address each of these grounds of appeal. Manifest inadequacy

17 The primary basis upon which the first ground of appeal was advanced in the application for leave to appeal and appeal was that the objective seriousness of the s 8(1) offences, and her Honour's assessment of the objective seriousness of those offences, was not reflected in the quantum of penalties imposed by her Honour on 12 July 2007. We agree. Her Honour finally imposed a penalty for the s 8(1) offence against the corporate defendant in an amount of $10,000. The maximum penalty for the offence was $550,000, although the jurisdictional limit was $55,000. A penalty of $5,000 was imposed on the second respondent for the s 8(1) and s 26(1) offence. The maximum penalty for that offence was $55,000. In our view, the penalties imposed were so below what was appropriate in the circumstances that the inference may be drawn that there has been a failure to properly exercise the sentencing discretion at first instance: see Dinsdale v The Queen (2000) 202 CLR 321 at 340; WorkCover Authority (NSW) (Inspector Jones) v Challita (2006) 153 IR 409 at [57]; WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363. 18 Her Honour found that the offences were objectively serious. Her Honour addressed a number of objective factors which are traditionally taken into account when sentencing for breaches of occupational health and safety laws. In particular, her Honour found that the absence of safe working systems at the factory had the potential for "very serious consequences". Mr Kim's injuries were described as "serious". Her Honour also found that the risk to safety was foreseeable and that the availability of simple remedial steps not taken by the corporate respondent prior to the offences, also demonstrated the seriousness of the offences. The principles of general and specific deterrence were also addressed by her Honour as significant factors to be taken into account on sentence. 19 These findings, in our view, cannot be reconciled with the actual penalties imposed. It may be that her Honour in sentencing did not have in mind the maximum penalty available for the offence under s 8(1) against the corporate respondent, but rather was guided by the jurisdictional limit for that offence. If so, her Honour fell into error. Early in the sentencing remarks, her Honour identified as a relevant consideration, "the maximum penalty for the offence". Later, her Honour referred to a "de facto reduction of the maximum penalty", in the context of considering the scale of discount for the pleas of guilty. There is no mention in the sentencing remarks of a jurisdictional limit which might have indicated that her Honour approached the sentence of the corporate respondent, by reference to the maximum penalty of $550,000 and not by applying the lower statutory maximum applicable to the jurisdictional limit. The penalty imposed in the amount of $10,000 against the corporate respondent for a breach of the s 8(1) offence leads us to conclude that her Honour was in fact guided not by the maximum penalty, but by the jurisdictional limit. This type of error has necessitated correction in the Court's appellate jurisdiction on a number of occasions: see, for example, WorkCover Authority of New South Wales v Stephensons Cranes Pty Ltd (2005) 139 IR 324; WorkCover Authority of New South Wales (Inspector Glass) v Flexible Packaging (Australia) Pty Ltd (2005) 144 IR 385; Beacham v Interface Manufacturing Pty Ltd (2005) 141 IR 416; Inspector Prasad De Silva v Spicer Axle Australia Pty Ltd [2005] NSWIRComm 278; Inspector Green v Camilleri Properties Pty Ltd (2006) 152 IR 156. 20 The appellant also contended in relation to this ground of appeal that her Honour gave little or no consideration to the evidence of prior incidents of injuries of a similar nature arising from the operation of the machine, the subject of the incident. According to the appellant, the risk of amputation posed by the machine was known to the respondents from March 2005, that is, some twelve months before the incident, yet no steps had been taken in the interim period to remove the risk or implement a safe system of work. Her Honour, the appellant said, took none of these matters into account. 21 It is instructive in examining this contention to look at the material that was before her Honour on the particular issue. In the agreed statement of facts before her Honour there is a single reference to the issue, namely that the corporate respondent, "had known since March 2005 of the risk of amputation posed by the machine". No details were provided in relation to how that risk arose, or whether any of the workers at the factory were exposed to the risk and, if so, in what circumstances. In addition to this piece of evidence there was a photograph which was apparently before her Honour, depicting someone's right hand, with the caption underneath stating, "Nature and extent of injury suffered by Mr Jim Woog Kim on 8 March 2005 Right hand middle finger tip amputated". Whether these matters were brought to her Honour's attention is not clear from the material in the appeal book. The appellant's written submissions at first instance have been included in the appeal book. Those submissions repeat the assertion in the statement of facts that the respondents knew since March 2005 of the risk of amputation posed by the machine. The parties also made oral submissions at first instance, but these have not been reproduced in the appeal book. Counsel for the appellant, Mr Magee, however, informed the Full Bench that the learned Magistrate was taken to the photograph depicting Mr Kim's injuries sustained in March 2005, and that the issue of the risk of amputation, having manifested in March 2005, was expanded upon in oral submissions in the context of the objective seriousness of the offences. 22 In our view, the material that was before her Honour on this issue was relevant to the factors of foreseeability of the risk associated with the operation of the machine and the availability of remedial steps prior to the offences. Her Honour took both those factors into account. They formed part of the foundational facts for the finding that the offences were serious. Nevertheless, there is nothing in the sentencing reasons which indicates that her Honour also took into account the material concerning the fact that the risk of amputation had been known for some 12 months prior to the incident of 19 May 2006. This material was brought to her Honour's attention in oral submissions. It clearly was relevant to the assessment of the objective seriousness of the offences. The fact that a defendant has prior knowledge of the existence of a risk to safety, but takes no steps to address the risk when it becomes known, exacerbates the objective seriousness of an offence. The failure to take the material into account also reveals error. 23 The appellant has also submitted that her Honour fell into error by placing too much weight on subjective factors when discounting the penalties. Four matters were relied upon in support of the submission. First, it was said that inadequate consideration was given to the delay between the time when the risk of amputation became known, that is, in March 2005, and the implementation of new systems, sometime in September 2006. Secondly, it was contended that although her Honour indicated in the sentencing remarks that she was not satisfied that there was sufficient evidence placed before her, in relation to the respondents' capacity to pay fines, her Honour was prepared to allow a 15 per cent discount for the plea of guilty. Thirdly, it was contended that in taking into account, in the respondents' favour, the fact that "some steps" had been taken to implement safety procedures in the workplace, her Honour failed to have regard to the fact that those steps were not taken until some few months after the incident, and 18 months after the risk became known. Fourthly, the appellant contended that her Honour failed to have regard to the fact that one of the offences to which the respondents pleaded guilty, was the failure to report the incident and injury suffered by Mr Kim. 24 In relation to the first and third matters the respondents' knowledge of the risk of amputation, gained in March 2005, and the failure to address the risk up to the time of the incident of 19 May, 2006, are factors that were relevant only to her Honour's assessment of the objective seriousness of the offences. The failure of her Honour to take those factors into account we have found, disclosed an error in the sentencing reasons. The issue of the respondents' delay in the implementation of safe systems designed to address the subject risk, focuses on the behaviour of the respondents after the commission of the offences, that is, its relevance is confined to the circumstances which prevailed following the incident of 19 May, 2006. Her Honour found that "some steps" had been taken to implement safety systems after the incident which warranted a reduction in the penalties. We perceive no error in this approach. The respondents were entitled to some reduction of the penalties by reason of the remedial measures undertaken following the incident, which addressed the risk posed by the machine, even though those measures were not undertaken until some three or four months after the incident. 25 The second matter appears to rely upon an erroneous approach taken by her Honour to the percentage of discount awarded for the plea of guilty. The issue was not expanded upon further in submissions. We do not understand the appellant to be suggesting in relation to this issue, that her Honour's findings in relation to the respondents' capacity to pay were based on error. Her Honour did not accept that the respondents' evidence on the issue accurately reflected their financial circumstances. We agree with this finding. 26 As to the discount awarded for the pleas of guilty, her Honour accepted that they were entered at an early stage. The sentencing remarks disclose that the respondents had sought discounts of 25 per cent in recognition of the utilitarian value of the pleas. Her Honour's reasons for not awarding the percentage which the respondents had sought in our view does reveal error, but it is an error which does not assist the appellant's contention that her Honour gave too much weight to subjective matters, when discounting the penalties. 27 In the sentencing reasons her Honour referred to a practice of allowing a 25 per cent discount in recognition of the utilitarian value of the plea and expressed a view that the Court should be "wary" of allowing such a scale of discount. The reasons for this, according to her Honour, were because the practice of awarding a 25 per cent discount based on utilitarian considerations, "compromises the degree of contrition expressed thereby," and, caused difficulty in assessing the factor of contrition when too much emphasis was placed on utilitarian considerations.

28 If, by expressing these reservations, her Honour had in mind that 25 per cent represented the maximum available discount for a guilty plea, after taking into account all relevant factors, including utilitarian considerations and contrition, then her Honour fell into error. If her Honour approached the discount on the basis that the utilitarian value of the plea and the factor of contrition must be jointly considered this was also an error. In R v Thompson; R v Houlton (2002) 49 NSWLR 383 Spigelman CJ (with whom Wood CJ at CL, Foster AJA, Grove and James JJ agreed) set out a number of guidelines to be followed after a plea of guilty has been entered. It was said, in relation to the utilitarian value of the plea, that it should generally be assessed in the range of 10 to 25 per cent discount on sentence, and that it was preferable, although not obligatory, to quantify the actual discount awarded. The case is not however, authority for a proposition that the maximum discount that may be awarded for a plea of guilty is 25 per cent. 29 The application of the utilitarian principle and the factor of contrition are both relevant to the question of whether leniency should be extended for a plea of guilty but they require separate consideration and focus on very different issues. The utilitarian principle focuses on the efficiency and expediency of the criminal justice system and places particular emphasis on the timing of a guilty plea: see WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363. The strength of the prosecution case, for example, has no bearing on the utilitarian value of a guilty plea, but it is relevant to the question of contrition. The proposition was expressed clearly enough in Barbara Robyn Winchester (1992) 58 A Crim R 345 at 350 when Hunt CJ at CL (with whom Smart and Grove JJ agreed) said: A plea of guilty is always a matter which must be taken into account when imposing sentence. The degree of leniency to be afforded will depend upon many different factors. The plea may in some cases be an indication of contrition, or of some other quality or attribute, which is regarded as relevant for sentencing purposes independently of the mere fact that the prisoner has pleaded guilty. The extent to which leniency will be afforded upon this ground will depend to a large degree upon whether or not the plea resulted from a recognition of the inevitable: Shannon (1979) 21 SASR 442 at 452; Ellis (1986) 6 NSWLR 603 at 604. The plea of guilty may also be taken into account as a factor in its own right independently of such contrition, as mitigation for the co-operation in saving the time and cost involved in a trial. Obviously enough, the extent to which leniency will be afforded upon this ground will depend to a large degree upon just when the plea of guilty was entered or indicated (and thus the savings effected): Beavan (unreported, Court of Criminal Appeal, NSW, Hunt, Badgery-Parker and Abadee JJ, 22 August 1991), at p 12.

The important point to be made is that leniency is afforded upon the second ground as a result of purely utilitarian considerations, as with the "discount" allowed for assistance given to the authorities: Cartwright (1989) 17 NSWLR 243; Gallagher (1991) 23 NSWLR 220; 53 A Crim R 248. The leniency is afforded in order to encourage early pleas of guilty so that the criminal list is more expeditiously disposed of and so that other cases, in which there is a genuine issue to be determined, will be brought on for hearing without delay.

30 Returning to the present proceedings, whichever approach was adopted by her Honour when considering what discounts on penalty should be awarded, it may reasonably be concluded that because of her Honour's approach to the utilitarian value of the pleas and the question of contrition, the discounts awarded may have been less, not more, than what could have been awarded in the circumstances. If so, it provides no support for the appellant's contention that her Honour's approach to the pleas of guilty was too heavily weighted in favour of the respondents. Rather, it may well have had the opposite effect. 31 The final matter upon which the appellant relies for the contention that her Honour placed too much weight on the subjective factors when discounting the penalties was said to be the failure to have regard to the fact that one of the offences to which the respondents pleaded guilty, was the failure to report the incident and injury suffered by Mr Kim. This contention was, however, unsustainable. The gravamen of the offences under s 86(1) was the failure to report the workplace incident involving Mr Kim. It formed no part of the elements, or the particulars of the offences, under s 8(1). If the appellant's contention were correct, then her Honour would have been required to consider the conduct in the context of withholding leniency to which the respondents were otherwise entitled, in relation to the s 8(1) offences. This in turn would have resulted in conduct, central to the s 86(1) offences, being taken into account twice in the sentencing process. It is impermissible, when sentencing for one offence, to take into account an element of another offence, if to do so would result in the imposition of a more serious penalty than might otherwise have been imposed. The fact that her Honour does not appear to have had regard, at all, in the sentencing reasons, to the circumstances pertaining to the s 86(1) offences (or to the offences under s 155 of the Workers Compensation Act) is another matter which will be considered shortly. 32 A further error relied upon by the appellants in relation to the approach taken to all the offences to which pleas of guilty were entered, was the alleged failure of her Honour to make findings concerning the respective culpabilities of the respondents. It is contended in this regard, that the respondents' level of culpability in the offences was equal. The evidence would appear to support this. The second respondent was the sole director of the corporate respondent. According to the agreed statement of facts, he was actively involved in all aspects of the day-to-day running of the company. The appellant's submissions at first instance asserted that the second respondent had control of the corporate respondent's operations, which included the implementation and maintenance of safety in the workplace. The sentencing reasons were silent on the issue. This failure to give any consideration to the respondents' culpability in relation to the offences, we find constitutes error. Adequacy of reasons 33 The second ground of appeal was advanced on the basis that the sentencing reasons of 14 May, 2007 failed to adequately address matters relevant to the objective seriousness of the s 8(1) offences and, failed to provide reasons for imposing the penalties for the offences under s 86(1) and s 155. It was also contended that her Honour fell into error by failing to provide reasons when re-determining the penalties for the offences in the decision of 12 July, 2007. 34 The contention, in our view, was not borne out in the sentencing reasons in relation to the s 8(1) offences. Her Honour embarked on an analysis of the objective seriousness of the s 8(1) offences and made findings that they were serious. The error which we identified was that the inadequacy of the penalties imposed cannot be reconciled with the findings as to the seriousness of the offences. We have also concluded that the sentencing reasons reveal a number of material errors. This is not to say, however, that her Honour did not address the objective seriousness of the s 8(1) offences. Rather, in addressing the relevant factors and making a finding that the offences were serious, her Honour fell into error, given the manifest inadequacy of the penalties and the errors upon which they were based. 35 The same observation cannot be made in relation to the s 86(1) and s 155 offences. Although the beginning of the sentencing reasons of 14 May 2007 record a reference to the respondents facing charges under the Workers Compensation Act; and, the imposition of the global penalties by her Honour implies, at least, that her Honour was aware that the respondents were being sentenced for more than one offence, there was no analysis undertaken, and no findings made, in relation to the offences under s 86(1) and s 155. Moreover, the brief exchange at the conclusion of the decision of 14 May 2007 suggested that the global penalties were imposed in relation to two, not three of the offences. Nor is it certain which offences her Honour had in mind when imposing the penalties. 36 The giving of reasons for a particular decision, and the making of findings is a, "necessary incident of the judicial process": Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. A sentencing magistrate or judge should explicitly indicate the material upon which he or she has acted: Inspector Green v Camilleri Properties Pty Ltd (2006) 152 IR 156 at [22]. Although the obligation to give reasons does not necessarily extend to a requirement to expose every step in the reasoning process, (as to which see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 459), the failure of a judicial officer to give any reasons at all, constitutes error.

37 The issue is problematic in relation to the decision of 12 July, 2007. In that decision her Honour, after informing the representative for the appellant (the respondents were not present) that the penalties imposed by her on 14 May 2007 were "wrong", then proceeded to impose separate penalties upon each respondent for each of the three offences. No details were provided by her Honour for her conclusion that the original penalties imposed were "wrong", although her Honour refers to the penalty provision for the offence under s 155 of the Workers Compensation Act which her Honour said she, "should have picked up in the first instance." The effect of imposing the separate penalties for each offence also resulted in a significant reduction in the quantum of penalties imposed globally in the decision of 14 May, 2007. 38 Her Honour was entitled to exercise her discretion to re-open the proceedings in order to correct the penalties (which were clearly wrong). A procedure to do this is provided in s 43 of the Crimes (Sentencing Procedure) Act 1999, (CSPA). The relevant parts of that section provide: 43 Court may reopen proceedings to correct sentencing errors

(1) This section applies to criminal proceedings (including proceedings on appeal) in which a court has:

(b) failed to impose a penalty that is required to be imposed by law,

and so applies whether or not a person has been convicted of an offence in those proceedings. (2) The court may reopen the proceedings (either on its own initiative or on the application of a party to the proceedings) and, after giving the parties an opportunity to be heard: (a) may impose a penalty that is in accordance with the law, and

(b) if necessary, may amend any relevant conviction or order. ... (6) In this section: impose a penalty includes:

(a) impose a sentence of imprisonment or a fine, or ...

39 The section was not brought to our attention during submissions, nevertheless it is clearly relevant to our consideration of this particular aspect of the appeal.

40 It has been said that the section should be construed broadly (Donald James Tolmie (1994) 72 A Crim R 416 at 420) and, given the widest possible operation for the correction of significant matters in sentencing: Ho v Direct of Public Prosecutions and Another (1995) 37 NSWLR 393 at 398 and 403. It has also been said that if necessary the section should be utilised to re-sentence entirely, in order to produce the result which the sentencing judge intended to be achieved by the sentence originally, but invalidly, imposed: Regina v Hans John Tangen (Unreported, Supreme Court of New South Wales, Court of Criminal Appeal, Gleeson CJ, Badgery-Parker, Hidden JJ, 21 June 1996). 41 In Erceg v The District Court (NSW) and Another (2003) 143 A Crim R 455 McColl JA (with whom Palmer J agreed) made the following observations on the ambit of the section: [107] Where a court is satisfied of the existence of either condition precedent and that the court should reopen the proceedings, it has a wide discretion in deciding what if any penalty should be imposed, save that it must be in accordance with the law. The judge in re-sentencing applies the law which existed at the time the original sentence was imposed and takes into account the circumstances of the offence or offences and the position at the time of the imposition of the original penalty. The judge must consider what has happened since that penalty was imposed and the circumstances which then exist. The court is not limited to the position as at the imposition of the original penalty: R v Denning (NSWCCA per Smart J, unreported, 15 May 1992); approved R v Tange n per Badgery-Parker J (with whom Gleeson CJ and Hidden JJ agreed), not following the more restrictive views of s 24 expressed by Kirby P and by Hunt CJ at CL in Ho and Tolmie respectively.

[108] The power has been held to be available to reopen a sentence to make a subsequent term of imprisonment cumulative upon, or partly cumulative upon and partly concurrent with, the original term so that a further non- parole period may be imposed: R v Petrou ; to reopen to correct a penalty which was contrary to law by reason of misinformation given to the judge about the determinate sentences currently being served by the offender: R v Denning (NSWCCA, Carruthers, Smart and Grove JJ, unreported, 15 May 1992, BC9203052) per Smart and Grove JJ although each would have imposed a different sentence to the trial judge; Carruthers J would have quashed the decision to re-sentence for discretionary reasons, principally delay; and to reopen to impose a sentence which extended the period of time the offender would spend in prison and which complied with s 9(3) of the Sentencing Act : R v Tangen .

[109] This discussion of the principles applying to the s 43 power to reopen emphasise the breadth of the material to which the Court can have regard in considering an application to invoke the s 43 power. The Court is clearly not limited to the formal record of the sentence, but may have regard to all the circumstances relevant to the imposition of the penalty. Once it has determined the course it should pursue, then the formal record of the penalty may, if necessary, be amended. (The reference to "either condition precedent" in [107] of the extract is a reference to the two conditions set out in s 43(1) necessary to be satisfied before the proceedings may be re-opened). 42 In Ho v DPP the Court considered s 24 of the Criminal Procedure Act 1986, which was substantially re-enacted by s 43 of the CSPA, Kirby P (as he then was) in commenting on s 24 said (at 403): 5) Differing views have been expressed by judges concerning the breadth of the phrase "contrary to law" in s 24. Certainly, the section is not intended to permit a general rehearing of sentencing proceedings on the merits: see, eg, Shortland v Heath [1977] WAR 61 at 62f; R v Williams; Ex parte Biggs [1989] 1 Qd R 594 at 597. Differences were also expressed by the members of the Court of Criminal Appeal in R v Tolmie (1994) 72 A Crim R 416 at 420, 421. However, whilst avoiding a re-hearing of the merits of the penalty, it is common ground that the purpose of the section is to permit the correction of mistakes where "such correction would have saved the cost, delay and expense involved in having to institute an appeal" (see R v Tolmie (at 420)) or, I would add, in being obliged to seek judicial review. For the correction of arguable mistakes in sentencing, the section should be given the widest possible operation.

43 These observations were approved by the Court of Criminal Appeal (NSW) in R v Tangen where it was said that the power conferred by s 24 extended to the Court having regard to what has transpired in the interim period, where relevant, and, if necessary to entirely re-sentence. It was also said however, that the section did not envisage a re-hearing and reconsideration of the whole sentencing process (at 8 and following).

44 The effect of the above line of authorities, which we endorse for present purposes, is that the Court when re-opening proceedings under s 43 in order to correct sentencing errors, cannot embark on a merits review or a reconsideration of the evidence including the giving of reasons and making findings. In relation to the amendments made to the penalties imposed by the learned Magistrate on 12 July 2007, what her Honour was obliged to do, having invoked the section to amend the penalties, was to give reasons why the amended penalties were significantly less than the global penalties originally imposed. Her Honour's failure to do this constitutes error.

Totality 45 The appellant relied in the third ground of appeal, on what was submitted was a misapplication of the principle of totality, in circumstances where the offences did not themselves have the requisite degree of common elements. 46 Given our earlier findings in relation to her Honour's approach to the fixing of penalties in the decision of 14 May 2007 and her Honour's correction of those penalties in the decision of 12 July, 2007, this ground of appeal seems to have fallen away. Her Honour in imposing the penalties on 12 July 2007, which we have found were manifestly inadequate, did not invoke the principle of totality. It therefore becomes unnecessary for us to consider it.

Re-sentencing of respondents 47 The inadequacy of the penalties imposed and the errors upon which they were based, lead us to conclude that we should set aside the penalties imposed on 12 July 2007 and assess the appropriate sentences to be imposed in both matters. 48 In doing so, we take into account the objective seriousness of the offences under s 8(1), as set out in some detail by her Honour in the reasons of 14 May, 2007. We also take into account the fact that the respondents were aware of the risk of amputation posed by the machine some 14 months before the incident of 19 May, 2006, and we are guided on penalty, as against the corporate respondent, by the statutory maximum which is $550,000. We note that the maximum penalty available against the second respondent for the offence is $55,000. We also regard the respondents' conduct in relation to the offences as equally culpable. The evidence before the learned Magistrate suggests that the second respondent had daily control and responsibility for the corporate respondent's affairs including its general operations and matters of safety in the workplace. According to the agreed statement of facts the second respondent was both sole director and the person concerned in the management of the corporate respondent's business operations. 49 The need for the application of the principle of deterrence in the sentencing process cannot be underestimated here. The offences reveal yet another serious incident involving unguarded machinery where the risk to safety, although obvious, was ignored. We adopt the observations of Walton J, Vice-President, in WorkCover Authority of New South Wales (Inspector Ankucic) v Crown in the Right of the State of New South Wales (Department of Education and Training) (2002) 112 IR 1 concerning the importance of the principle when considering the objective seriousness of offences involving unguarded machinery: [41] . . . It scarcely needs to be said that the presence of unguarded machinery constitutes one of the most pernicious and infamous dangers to the health and safety of persons in the workplace. It is this very type of danger that prompted persistent and ongoing legislative attempts by governments to compel the correction of such obvious and serious faults in the systems and plant employed in the operations of employers: see WorkCover Authority (NSW) v Waugh (1995) 59 IR 89 at 100 and Department of Mineral Resources (NSW) (Chief Inspector Terry) v A M Hoipo & Sons Pty Ltd (1999) 99 IR 137 at par 53. [42] The dangers presented by an unguarded saw are well known and management at all levels should be vigilant to ensure that unguarded machinery is not used . . . 50 Specific deterrence must also be taken into account. The respondents continue to operate within the industry. The corporate respondent employs a small workforce at the factory. This principle has particular significance when sentencing for offences under the occupational health and safety legislation: see for example Inspector Green v Camilleri Properties at [16]; WorkCover v Challita at [33] and [34]. 51 After the conclusion of these proceedings the second respondent in accordance with the Orders made on 20 March 2008 forwarded written submissions. The submissions contain an explanation that when the second respondent installed the machines at the factory he was under the impression they had been designed with relevant safety devices. He said he followed procedures for checking and reporting electrical safety and fire fighting equipment and, that he was not advised by anyone of any particular requirements concerning safety devices in relation to the machines. He submitted that "neither negligence nor laziness" prevented him from "doing what I should have done" but that it is of "great consequence" that no-one informed him and he, "therefore did not know". He directed attention to the need to have in place a system that benefits both employers and employees, rather than, "a system concentrated on assigning blame to an employer after the event." 52 We would make two observations in relation to these matters. First the evidence and the submissions before the learned Magistrate do not support the second respondent's contention that he was unaware of the need to install safety devices in relation to the machines utilised at the factory. The evidence reveals that the respondents were aware of the risk of amputation posed by the machine, the subject of the accident to Mr. Kim, as early as March 2005, but took no measures to address the risk prior to 19 May 2006. The failure to address a known risk to safety we have found, exacerbates the objective seriousness of the offence. Secondly, it is a well-established principle relevant to an inquiry into the liability of employers and self-employed persons under s 8 and s 9 of the OHS Act 2000 that employers and those who are self-employed, must be "proactive" in searching out risks to the safety of persons at work or in the workplace with a view to eliminating or, where that is not possible, minimising those risks to safety thereby ensuring the health, safety and welfare of those persons: see for example WorkCover Authority of NSW (Inspector Egan) v ATCO Controls Pty Limited (1998) 82 IR 80 at 85; Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143; Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [77]; Ridge Consolidated Pty Ltd v WorkCover Authority of New South Wales (Inspector Mauger) (2002) 115 IR 78 at [33]. 53 In relation to the subjective factors we take into account that the pleas of guilty were entered at an early stage. So much was conceded by the appellant in the written submissions at first instance. In our view an appropriate discount for the utilitarian value of the pleas is 20 per cent. We also take into account the respondents' co-operation in the investigation of the incident, their contrition expressed by reason of the pleas of guilty (although tempered somewhat by what appears on the evidence to be strong prosecution cases), as well as the fact that some steps were taken to address the risk of amputation posed by the machine, even though the steps were not taken until about four months after the incident. We also take into account the absence of prior convictions in relation to both respondents. We agree with the learned Magistrate's approach to the issue of the respondents' respective capacities to pay a fine and accordingly we do not take this issue into account. 54 In relation to the offences under s 86(1), the respondents have acknowledged them by virtue of their pleas of guilty, again entered at an early stage. Section 86(1)(b), which requires an occupier of a place of work to notify WorkCover of an incident in accordance with Regulation 341 of the Occupational Health and Safety Regulations 2001, provides for a maximum penalty for a corporate offender with no prior convictions of $55,000 and a maximum penalty for an individual offender of $27,500. Regulation 341(a) requires all injuries to persons which result in an incapacity for work for a period of at least seven days to be notified to WorkCover. According to the agreed statement of facts, the incident was brought to WorkCover's attention on 29 May, 2006 not by the respondents but by medical staff treating Mr Kim at Bankstown Hospital. 55 Section 86(1)(b) fulfils an important purpose in facilitating the ability of WorkCover to properly and promptly investigate workplace incidents. In Gotico Industries Pty Ltd v Benbow (2001) 103 IR 78, a Full Bench made the following observations on s 27 of the Occupational Health and Safety Act 1983, the predecessor section to s 86(1)(b), which we endorse: [6] We wish to emphasise the significance of s 27 of the Occupational Health and Safety Act 1983 (NSW). The provision does not merely impose formal requirements for the notification of accidents in the nature of the registration of an incident, but rather requires a notification of accidents so that the WorkCover Authority of New South Wales may carry out necessary investigations to identify and remedy hazards to safety: see WorkCover Authority (NSW) (Inspector McMartin) v Broken Hill Proprietary Co Ltd (1999) 90 IR 277 at 290 and 295. The section is an important provision ensuring the proper investigation of breaches of the Occupational Health and Safety Act and the adoption of appropriate remedial measures to prevent further such occurrences. 56 For the reasons set out in Gotico Industries, general deterrence is an important component in the assessment of the penalties. The importance of the principle in the present circumstances arises from the necessity of WorkCover, as an investigative body, to attend and investigate the workplace where a possible breach of the occupational health and safety legislation has occurred. WorkCover must also be in a timely position to advise, where necessary, on relevant safety issues (see Inspector Dubois v Masters Civil Pty Ltd and Anor [2006] NSWIRComm 180 at [34]). Employers, for these reasons, must be made aware of the importance of notifying WorkCover, within the required period of time, of all workplace incidents falling within the purview of the section. 57 Specific deterrence is also relevant to both respondents. Notification of the incident came from a third party some 10 days later. The corporate respondent continues to operate in the industry, as does the second respondent as sole director. In written submissions, and in oral submissions before us with the aid of the person interpreting for the second respondent, we were informed by the second respondent, that he was unaware of the obligation to report the incident, nor was he aware that WorkCover was the relevant body to which workplace incidents of the type falling within s 86(1)(b) should be reported. We accept this explanation and will take it into consideration in the respondents' favour when assessing the penalties. 58 We also consider that the respondents were equally culpable in relation to the conduct giving rise to the offences. We also take into account the subjective factors earlier mentioned as mitigating the penalties. 59 Turning to the Workers Compensation Act offences, we note that the maximum penalty for the offences against both respondents is $55,000. The jurisdictional limit is $22,000: Scevola v WorkCover Authority (NSW) (Inspector Sealey) (No 2) (2006) 151 IR 75. According to the appellant's written submissions at first instance, the corporate respondent, in 2004, made enquiries with an insurance broker regarding a quote for workers' compensation insurance. Apparently, the corporate respondent received a quote, but the policy was never paid and therefore it had no valid policy at the time of the offence. 60 The section is concerned with workplace safety and the compensable protection of injured workers. According to the second reading speech, legislative council, Hansard, 28 May 1987, the main purpose or object of the Workers Compensation Act is, "to provide an efficient, equitable and affordable workers compensation system to promote the rehabilitation of injured workers and to reinforce measures to improve safety and minimise accidents in the workplace". Given these important purposes, general deterrence assumes particular significance in the sentencing process. It is imperative that employers contribute to the workers compensation insurance scheme, so that costs to the community are minimised (as to which, see generally the decision in Llandilo Staircases Pty Ltd v WorkCover Authority of New South Wales (Inspector Parsons) (2001) 104 IR 204 at [17]). The principle also has undoubted relevance based on the necessity to regulate industrial conditions in terms of workplace safety: Llandilo Staircases at [28]. Specific deterrence is also important to ensure that the corporate respondent, still in operation as an employer, maintains its contributions to the scheme. 61 In oral submissions before us, the second respondent expressed remorse for his failure to participate in the scheme, but he maintained that he was unaware of the statutory obligations of the corporate respondent under the section. In written submissions the second respondent reiterated that he did not know that workers compensation insurance was compulsory. We find this explanation somewhat unconvincing, given the material that emerged at first instance concerning the corporate respondent's enquiries in 2004 to the insurance broker, the receipt of a quote and its subsequent failure to pay for a policy of insurance. 62 We also take into account as mitigating the offences that the pleas of guilty were entered at an early stage, and the respondents co-operated with WorkCover in the investigation of the offences. In our view, an appropriate discount for the utilitarian value of the pleas is 20 per cent. We also take into account the contrition expressed by both respondents by reason of the pleas of guilty. 63 In accordance with the conventional approach and the relevance of the principle of double jeopardy to prosecution appeals, we adopt a conservative approach in imposing penalties at the lower end of the range of available sentences. Orders

To the extent required, leave to appeal is granted.

The corporate respondent, Rexma Pty Ltd, is fined the following amounts (with a moiety of the fines to be paid to the appellant):

(iii) s 155 Workers Compensation Act : $8,000. 5. The second respondent, Chung Byung Man, is fined the following amounts (with a moiety of the fines to be paid to the appellant): (i) s 8(1) and s 26(1) OHS Act 2000: $8,800;

(iii) s 155 Workers Compensation Act and s 244 Workplace Injury Management and Workers Compensation Act : $8,000.

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Occupational Health and Safety Act 1983(NSW)

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