Inspector MacKenzie v Fujifilm Australia Pty Ltd

Industrial Relations Commission (NSW)|2006-03-10|Before: Backman J

CITATION: Inspector MacKenzie v Fujifilm Australia Pty Ltd (ACN 000 064 433) (formerly Hanimex Pty Limited) [2006] NSWIRComm 74

Prosecutor: Inspector Angus Wake Mackenzie PARTIES: Defendant: Fujifilm Australia Pty Ltd (ACN 000 064 433) (formerly Hanimex Pty Limited)

CATCHWORDS: Occupational health and safety - plea of guilty to one offence under s 18(1)(a) of the Occupational Health and Safety Act 1983 - persons at Wyong hospital become ill after exposure to chemical fumes from a product supplied by the defendant for the operation of an x-ray processing machine - whether the product was a hazardous substance under the Occupational Health and Safety (Hazardous Substances) Regulation 1996 - objective seriousness of the offence considered - foreseeable risk to safety - consequences - deterrence - maximum penalty - absence of prior convictions - remedial steps - plea of guilty - remorse and contrition - post accident measures - penalty - orders - costs.

Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Occupational Health and Safety Act 1983 Occupational Health and Safety (Hazardous Substances) Regulation 1996

Anderson v The Queen (1993) 177 CLR 520 Capral Aluminium Limited v WorkCover Authority of NSW (Inspector Mayo-Ramsey) (2000) 49 NSWLR 610 Maddaford v CSR Limited and Mulgoa Quarries [2004] NSWIRComm 337 CASES CITED: Reg v O'Neill (1979) 2 NSWLR 582 R v Thomson; R v Houlton (2000) 49 NSWLR 383; 115 A Crim R 104 Sharma (2002) 130 A Crim R 238 The Queen v Olbrich (1999) 199 CLR 270 Winchester (1992) 50 A Crim R 345

HEARING DATES: 16/05/2005; 17/05/2005; 18/05/2005; 19/05/2005; 24/05/2005; 25/05/2005

Prosecutor: Mr R. Reitano, of counsel Solicitors: Phillips Fox

LEGAL REPRESENTATIVES: Defendant: Mr M. Scott, of counsel Solicitors: Dibbs Barker Gosling

Inspector MacKenzie v Fujifilm Australia Pty Ltd (ACN 000 064 433) (formerly Hanimex Pty Limited)

Prosecution under s 18(1)(a) of the Occupational Health and Safety Act 1983

1 The defendant has pleaded guilty to an offence under s 18(1)(a) of the Occupational Health and Safety Act 1983. The particulars of the offence are set out in a further amended application for order, the relevant portions of which are extracted below:

...on or about 26 July 2001 the defendant, being a supplier of plant or substances for use by persons at work, having supplied substances, namely Fuji Hunt Automatic X-Ray Developer Replenisher Parts A, B and C (Fuji Hunt Product) to the Central Coast Area Health Service (CCAHS) failed to ensure that the Fuji Hunt product was safe and without risk to health when properly used...

1.1 The defendant was at all material times a company incorporated with its registered office located at 114 Old Pittwater Road, Brookvale in the State of New South Wales;

1.2 Between 28 May 2001 and 26 July 2001, the defendant delivered the Fuji Hunt product to the CCAHS premises known as "Gosford Hospital Distribution Centre" at 3 Apollo Close, Gosford in the State of New South Wales and to premises known as Wyong hospital.

1.3 Prior to 28 May 2001, the defendant supplied the CCAHS with Ilford Anitec Developer Replenisher Parts A, B & C (Ilford Product);

1.4 The Fuji Hunt product was a Hazardous Substance pursuant to the Occupational Health and Safety (Hazardous Substances) Regulation 1996 ;

1.5 The defendant supplied CCAHS with Material Safety Data Sheets (MSDS) for the Fuji Hunt product prior to 26 July 2001. The MSDS did not comply with the 1994 National Occupational Health and Safety Commission Code of Practice for the preparation of a MSDS and the Regulations;

1.6 The defendant supplied the Fuji Hunt product without providing a template for the use of Fuji Hunt product by CCAHS;

1.7 The defendant failed to promptly respond to the CCAHS's requests for further information regarding the Fuji Hunt product prior to 10 August 2001;

1.8 On 10 and 13 August 2001, certain employees of CCAHS were affected by fumes produced by the Fuji Hunt product and complained of symptoms such as dizziness, nausea, nose bleed, depression, tightening in the chest, headaches, burning eyes and difficulty concentrating;

1.9 As a result of the defendant's breach of section 18(1)(a) of the Occupational Health and Safety Act 1983, certain employees of CCAHS at Wyong hospital were exposed to risk to their health and safety on 10 August 2001 and 13 August 2001. 2 As the facts will disclose the offence concerns incidents at Wyong hospital on 10 and 13 August 2001 during which employees of the Central Coast Area Health Service now known as Northern Sydney and Central Coast Area Health Service (NSCCAHS) became ill after being affected by fumes from chemicals supplied by the defendant for the operation of the hospital's x-ray film processing machine. 3 The Court was informed that the plea of guilty was entered "in the terms of the amended application for order". A document purporting to represent the amended application was duly handed up. This document was in fact the document referred to as the further amended application for order. Later when the sentencing proceedings commenced the defendant through its counsel Mr Scott informed the Court its plea of guilty was confined to particulars 1.5, 1.6 and 1.7 set out in the above extract. The submission was put to the Court in the following way:

...they (particulars 1.5, 1.6 and 1.7) are the three failures pleaded to. The other matters are matters of fact. They are pleading to all of those. They are pleading equally to all of those particulars. 4 In relation to particulars 1.5, 1.6 and 1.7 Mr Scott said:

We are pleading guilty to all those particulars. That is it. The submission that I'm trying to put forward to your Honour is the degree of risk created as the primary charge.

Following a question from me Mr Scott said that the defendant conceded some degree of risk. He then said:

That's really the thrust of our submission. Yes, there is a risk generated, there must be a risk logically generated by failure to provide all the relevant information as regards to a hazardous product, there is no doubt about that. But coming to the particulars of these particular individuals on the day, 10 and 13 August, we say that the risk is minimal and on those days, in fact there may not have been a risk to the health and safety on those days on the evidence put forward by the employees. So it is not that we are recanting on it at all. I'm just saying what we are trying to do is deal with the degree of risk. 5 Based on the foregoing the sentence hearing has proceeded upon the basis that the defendant entered a plea of guilty to one offence which incorporated particulars 1.5, 1.6 and 1.7 as set out in the document entitled further amended application for order. Other particulars relied upon by the prosecutor must be proved by the prosecutor beyond reasonable doubt: Anderson v The Queen (1993) 177 CLR 520 at 536; The Queen v Olbrich (1999) 199 CLR 270 at 293. 6 Observations about the proper approach to be taken to factual matters which are contested in the context of a guilty plea were made by Moffitt ACJ in Reg v O'Neill (1979) 2 NSWLR 582 at 588 and are worth repeating here:

I think three elemental matters can be stated. First a plea of guilty, in itself, carries with it an admission of the essential legal ingredients of the offence admitted by the plea, and no more. Second, beyond that, any facts relied on by the Crown and, in particular, any that aggravate the offence must be established by the Crown by some acceptable procedure. Third, any dispute as to matters beyond the essential ingredients of the offence admitted by the plea must be resolved by ordinary legal principles, including resolving relevant doubt in favour of the accused. 7 Evidence was heard in this matter over a number of days. By way of brief background, on or about 28 May 2001 the defendant commenced supplying NSCCAHS with an x-ray developer known as Fuji Hunt Automatic X-Ray Developer Replenisher Parts A, B and C (the Fuji Hunt product). Each part was contained in a separate bottle. Contents which were printed on the label of the Part C bottle included the substance glutaraldehyde at a concentration of 50-55%. This was a much higher level than had been indicated on the previous x-ray developer used at Wyong hospital by NSCCAHS which had also been supplied by the defendant (the Ilford product). Part A according to the label contained quantities of hydroquinone and potassium hydroxide. Part B contained acetic acid. Clause 7 of the Occupational Health and Safety (Hazardous Substances) Regulation 1996 requires a manufacturer or importer before supplying a substance for use at work to first ascertain whether it is a hazardous substance listed in a document entitled List of Designated Hazardous Substances. This list is prepared by the National Occupational Health and Safety Committee (NOHSC). A report of Dr Maxwell Thomas McEwan which formed part of the evidence during the proceedings examined the content of Material Safety Data Sheets (MSDS) generated in Singapore and supplied by the defendant to NSCCAHS on about 20 July 2001. Several findings in the report are based on a number of chemical ingredients contained in Part A of the Fuji Hunt product. These chemical ingredients include potassium hydroxide, hydroquinone and various sulphites which according to the report are classifiable as hazardous under the Approved Criteria for Classifying Hazardous Substances depending on the level of concentration of the particular chemical in the product. The report also stated that glutaraldehyde (present in Part C) is the most readily recognised hazardous substance associated with the x-ray developing process. The report also refers to the chemicals as "potentially hazardous substances" in the context of a failure to classify their hazardous nature in the Singapore MSDS supplied to the defendant. A second report by Associate Professor Chris Winder which formed part of the evidence proceeds upon the basis that the Fuji Hunt product contained materials which were classifiable as hazardous substances. 8 Clause 8 of the Regulation requires an importer prior to supply of a hazardous substance to prepare an MSDS. The clause also sets out in precise terms the information that must be included in the document. Clause 9 of the Regulation mandates that a supplier of a hazardous substance for use at work must ensure that a current MSDS is supplied on the first occasion the substance is supplied. 9 The MSDS supplied by the defendant on or about 20 July 2001 and which was generated in Singapore did not on the evidence comply with the requirements under the Regulation or in the Code of Practice for the Preparation of Material Safety Data Sheets. I will return to this aspect of the case in more detail shortly. 10 Besides the delivery of the Fuji Hunt product on 28 May 2001 further deliveries to Wyong hospital occurred on 27 June 2001 and 3 August 2001. One delivery of the product was made at Gosford hospital on 26 July 2001. According to the evidence of Robert Martin Broug a technical officer employed by NSCCAHS working in the medical imaging department at Wyong hospital he first became aware of the Fuji Hunt product sometime in early July 2001 when he was contacted by a co-worker, Robyne White. Mr Broug had a number of concerns about the new product. One concern was that templates or mixer plates for the product had not been received from the defendant. The templates used for the outgoing Ilford product did not fit the bottle size of the new product. These templates had a particular purpose which was to prevent the product splashing from the mixers. Another concern was that the glutaraldehyde level (50-55%) printed on the bottles of the Fuji Hunt product was much higher than the level indicated on the Ilford product. Mr Broug advised his supervisors of his concerns. He and other employees of the defendant contacted the defendant attempting to obtain MSDS for the new product. When the MSDS arrived Mr Broug noticed an anomaly between the amount of glutaraldehyde (5-10%) indicated in the MSDS and the amount (50-55%) indicated on the label of the Part C bottle. His attempts to obtain some explanation for the anomaly from the defendant were unsuccessful. Attempts by Mr Broug to obtain the correct templates from the defendant also proved unsuccessful. Mr Broug as a last resort adapted the templates used for the Ilford product to accommodate the Fuji Hunt product bottles. He did this by cutting the Ilford product templates with a jigsaw. 11 The Fuji Hunt product was used at Wyong hospital for the first time on 27 July 2001. Early that day Mr Broug purged the system. He emptied the processor tanks of all the old chemistry, washed and rinsed the processor mixer tanks and the replenishment lines. Water was then poured into tanks followed by the chemistry. By the time Mr Broug had completed those tasks other staff had begun arriving at the hospital. Mr Broug checked that the film quality was all right. At about that time he received complaints about the smell of the chemistry. Soon after his skin began to burn and his eyes became irritated. Mr Broug recorded the incident that day in a Communications Book. Part of his entry in the book read:

Today we started using the new CHEMISTRY (DEV). I cleaned the mixer, purged the lines, cleaned the tanks. Mmmm - strong smell, eyes stinging oh well the MSD says its under 1% and its OK, but thats not what it says on the bottles in the box.... Not Happy! 12 Another employee who suffered some ill effects from the new chemistry on 27 July was Joyce Hayward who was employed at the time at Wyong hospital as a registered nurse. Her work station she said was eighteen inches (about forty five centimetres) from the processor tank. She first noticed a strong smell. By about 9:30am she had a headache, felt nauseous and developed rhinitis and her eyes stung. She also felt faint, and began to lose concentration. She made an entry in the Hazard Register for that day in the following words:

Since the chemicals have been changed this morning I have experienced headaches, rhinitis, burning sensation of the mucosa and generally feeling "ill".

Possible control measures: Improve extraction of chemical fumes. What are in those chemicals??? Are they a hazard to health. 13 Ashley Peters, a radiographer in employ by NSCCAHS at Wyong hospital on 27 July 2001 also detected a "very odorous" smell in the medical imaging department. He said the smell made him light headed and "blurry-eyed". He also made an entry in the Hazard Register where he wrote:

Note: Ashley Peters, Bob Broug and other staff in the area experienced various reactions to the new chemicals - smell, stinging eyes + irritated throats were some of the problems. 14 Robyne White, a radiographer employed by NSCCAHS at the time of the offence also said in evidence that she mixed the new chemicals sometime around the end of July 2001. She thought the date may have been 28 July 2001. She recalled that earlier she had had a conversation with Mr Broug during which they discussed the new chemicals. She said that the boxes containing the new chemicals were marked "new" and a notation was made on a whiteboard to the effect that the chemicals were not to be used. Mr Broug she said nevertheless used them on 27 July because the hospital had run out of the old brand. Shortly after that she also used the new chemicals. She experienced runny eyes. She observed that the new chemistry was different in colour from the old brand and that it was foaming, "...like a head of beer". She made an entry in the Hazard Register recording her observations. She also thought she contacted Mr Broug and Mr Horner about the incident. 15 On Friday 10 August 2001 Mr Broug purged and cleaned the chemicals from the x-ray processing machine. The reason he did this was because of the complaints from staff about the smell of the new chemistry and the scum in the tanks. At this stage there had been between eight to twelve mixes of the new chemistry by radiographers. When Mr Broug commenced purging and cleaning he first noticed a scum forming in the tanks which later formed into granules. Mr Broug wore protective clothing at the time including a face mask. He felt a burning sensation on his skin. Other people had gone to casualty complaining of feeling ill. Mr Broug developed a bad headache and went to casualty where he said he was diagnosed with high blood pressure. Shortly after that the department was closed down. Later Mr Broug was asked to return to the department and retrieve a sample. That evening Mr Broug experienced hot burning eyes which he said was akin to conjunctivitis. The next morning he could not open his eyes. His nose was bloodied. He also felt very depressed and developed a rash. 16 Ms White started work at Wyong hospital on 10 August 2001. Upon entering the building she noticed a very strong smell. She saw Mr Broug cleaning the processor. She opened a number of doors in order to let in some fresh air. Later she felt dizzy, nauseous, a burning and tightness in her chest and she developed a severe headache. After spending several hours in accident and emergency she filled out an Incident Report and drove home. 17 Nurse Haywood was also on duty on 10 August. She recalled a strong chemical smell at Wyong hospital that day and developed a number of symptoms including headache, nausea, burning on the skin and an ache in the stomach area. She also spent time in accident and emergency. 18 Mr Peters on 10 August 2001 also experienced adverse effects after smelling what he described as an odorous smell in the medical imaging department at Wyong hospital. He attended the casualty section of Wyong hospital for treatment. 19 Francis Leung the manager of the medical imaging department on 10 August 2001 and one of Mr Broug's supervisors explained that on the day Ms White contacted him and told him that staff at Wyong hospital had been overcome by chemical fumes from the Fuji Hunt product. Mr Leung instructed her to close the department and then seek medical assistance. He then contacted the defendant and spoke to John Gaunt. Mr Gaunt promised to send a technician to Wyong hospital to clean the processor and remove the Fuji Hunt product. Mr Leung then rang the director of medical services of Wyong hospital, Dr Andrew Lancaster and informed him of the incident and of his decision to close the department. He asked Dr Lancaster to increase the ventilation in the department in order to get rid of the fumes. Later that day a technician in the defendant's employ Martin De Rooy arrived at Wyong hospital and after some brief instructions from Mr Broug he proceeded to flush the system through, remove the Fuji Hunt product and replace it with the Ilford product that he had collected from Gosford hospital en route to Wyong hospital. Mr De Rooy did not, contrary to Mr Leung's request to Mr Gaunt, remove the Fuji Hunt product from the premises. Nor did Mr Leung who assumed it would be removed check to ensure that it had been removed. Nor it appears were any weekend staff told of the incident of 10 August 2001 or given any instruction about using the Fuji Hunt product. 20 Mr Broug understood from what he had been told by Mr Leung that after 10 August all Fuji Hunt products had been removed from Wyong hospital. The failure to remove the product or to ensure that it was removed had the predictable result that it was used again on the weekend to top up the developer mixing tank, attached to the x-ray processing machine. 21 On Monday 13 August 2001 staff again complained of an offensive odour. In addition certain staff complained of symptoms similar to those experienced by staff on 10 August 2001. The department remained open for a short period that day and then later was closed. 22 On 10 August Mr De Rooy took samples of the chemistry from the mixer and processor at Wyong hospital. On 22 August Mr Gaunt sent the samples to Chemika Pty Limited. A letter of that date from Mr Gaunt to Dr Doughty then the chief chemist at Chemika Pty Limited requests an analysis of the Fuji Hunt product by Dr Doughty in order to ascertain the identity and contents of the chemistry and the mix by concentration of that chemistry, so that the defendant can,

...determine whether or not the chemistry was correctly mixed or was within acceptable health exposure levels. 23 A report dated 20 November 2001 authored by Dr Doughty and sent to the defendant focussed exclusively on the concentration of glutaraldehyde contained in the developer solution. That concentration was found to be 3.6% w/w. In a letter dated 23 November 2001 to the defendant Dr Doughty provided the following comment in relation to the level of concentration saying:

This concentration falls below the range of 5-10% w/w glutaraldehyde indicated on the MSDS for the product. 24 In January 2004 following a request by letter from the defendant for further testing Dr Doughty also tested the pH values in samples from Batches 1030163 and 1020108 of the product. Dr Doughty found a pH value of 1.9 for Part C of Batch 1030163. He noted however that Part C contained glutaraldehyde sodium bisulphate which he said is a component likely to degrade over time to form sulphur dioxide. Sulphur dioxide in turn forms acidic solutions making it more likely that the solution would become more acidic over time. Finally Dr Doughty observed that because his results were based on samples which were tested at least two and a half years after manufacture (January 2004) that no conclusions were possible as to the pH values of the solution at the relevant time (which for present purposes would be August 2001). 25 During the sentence proceedings the defendant relied on an affidavit of Alan Donald Fraser sworn on 23 May 2005. Mr Fraser is the Operations and Logistics Director for the defendant and has been in the defendant's employ since 1977. Mr Fraser explained that the Fuji Hunt product was manufactured in Singapore but before it was introduced by the defendant into the Australian market the defendant arranged for it to be trialled at two sites in Queensland and one site in New South Wales. According to Mr Fraser those trials were successful and in about January 2001 the decision was made by the defendant to import the product for supply to its customers. In about late April to early May 2001, the defendant received the templates for the Fuji Hunt product from Singapore. Mr Fraser says that the templates are an aid in the mixing process and allow for the draining of chemical parts into the mixer without requiring someone to actually hold the product while it drains from the bottles into the mixer. They do not ensure the correct mixing of the chemistry. 26 Mr Fraser recalled that in about late June 2001 Mr Broug spoke to Nicole Gooch (another employee of the defendant) and requested a copy of the MSDS for the Fuji Hunt product. Following that Ms Gooch obtained MSDS from Singapore and in late June or about mid July 2001 Ms Gooch forwarded a copy of the document to Gosford hospital. Mr Fraser also recalled that Wyong hospital sometime in 2001 asked the defendant to clarify the different levels of glutaraldehyde specified in the Fuji Hunt product and the Ilford product. The defendant sought clarification in July 2001 from Fuji Hunt Singapore. 27 According to Mr Fraser on 10 August 2001 Mr Leung from NSCCAHS spoke to Mr Gaunt and reported the incident at Wyong hospital that day when persons became ill after being exposed to fumes from the Fuji Hunt product. Mr De Rooy the service technician was sent to the hospital to assist with the situation. On 13 August 2001 Mr Leung advised Mr Gaunt that the staff at Wyong hospital had again been evacuated from the building because of fumes resulting from the use of the Fuji Hunt product. Mr Gaunt attended the hospital that day following the incident. On 16 August 2001 Mr Fraser asked Philip Goh (from Fuji Hunt Singapore) to fly to Sydney to assist in the investigations into the incidents at Wyong hospital. Mr Goh later informed Mr Fraser that the notation on the Part C bottle, "50% glutaraldehyde" indicated the strength of the substance in a concentrate used to make the product and did not describe the amount of the substance in the Part C bottle. The actual level was approximately 0.75%. Tests were later performed (on 23 August 2001) on the samples taken by Mr De Rooy from Wyong hospital on 10 August 2001. During the tests there was no evidence of frothing, no production of scum, no excessive fumes and no sedimentation of the chemicals. 28 Mr Fraser also advises that no other Australian customers of the defendant have reported any health issues associated with using the product. He also describes the system that the defendant had in place for introducing new x-ray chemicals, explaining that because the defendant rarely changed its supplier when the Fuji Hunt product was introduced its procedures were not updated. He expressed this in the following way:

Whilst there is no excuse, the procedures Hanimex had in place for introducing x-ray chemicals produced by a new supplier like the Fuji Hunt product, had not been used for many years because Hanimex only rarely changed its supplier. As indicated above, Hanimex supplied the Ilford chemistry for approximately 15 years prior to 2001. When the procedures were used to introduce the Fuji Hunt product they were found to be wanting. Whether the Fuji Hunt product was a hazardous substance under the Regulation 29 It is not entirely clear from the evidence outlined above that all the substances identified in the Singapore MSDS for the Fuji Hunt product fit the classification of hazardous substances under the Regulation. One means of determining whether a substance is a hazardous substance is to ascertain under clause 7 of the Regulation whether it is in the List of Designated Hazardous Substances. Another way is to ascertain whether it fits certain criteria set out in the "Approved Criteria for Classifying Hazardous Substances". Associate Professor Winder concluded generally that the Fuji Hunt product contained materials which were "classifiable" as hazardous substances without nominating any particular constituent parts or chemicals that might fit the categories. According to Dr McEwan when a chemical is not on the List it may be classified as hazardous according to the approved criteria. A number of chemicals which made up the Fuji Hunt product however appear on the List. These include potassium hydroxide at a concentration greater than or equal to 5%; hydroquinone at a concentration equal to or more than 25%; and, glutaraldehyde at a concentration equal to or more than 0.5%. In the Singapore MSDS the concentration of potassium hydroxide is said to be 1-5% by weight and hydroquinone 5-10% by weight. The glutaraldehyde content is said to be 5-10% by weight. This means that potassium hydroxide and glutaraldehyde are both hazardous substances under the Regulation, therefore the Fuji Hunt product is a hazardous substance and I so find beyond reasonable doubt. Consideration

30 The evidence has established that the MSDS were supplied to NSCCAHS by the defendant on or about 20 July 2001, that is one week before the first incident of 27 July when persons working at Wyong hospital suffered ill effects following exposure to the Fuji Hunt product. The offence as set out in the further amended application for order alleges that the defendant supplied the product on 26 July 2001. I find that the product supplied was a risk to the safety of persons at Wyong hospital. This became starkly evident the following day, on 27 July. The evidence however does not suggest that the defendant was aware of the incident of 27 July 2001. It was certainly made aware of the incident of 10 August 2001. The MSDS which were generated in Singapore clearly did not comply with Australian requirements, either under the Regulation or under the Code of Practice for the Preparation of Material Safety Data Sheets. Nevertheless the information contained in the MSDS identified a number of hazards associated with the product, as well as first aid and emergency measures in the event of exposure to the chemicals and toxicological information. All these matters would have instantly alerted a user of the chemicals that they presented a serious risk to safety. 31 There is no doubt on the evidence that the defendant failed to supply NSCCAHS with the templates for the Fuji Hunt product. This is despite the fact that the defendant had obtained the templates from Singapore in late April to early May 2001, and despite repeated attempts by staff at Wyong hospital to obtain them from the defendant. The templates were necessary to facilitate a snug fit of the Fuji Hunt bottles containing the product into the mixer to avoid the risk of splashing. The Fuji Hunt product was supplied in different shaped bottles from the earlier used product, the Ilford product. Templates made for the Ilford product did not fit the Fuji Hunt product. Mr Broug observed in relation to the larger sized Part A bottle for the Fuji Hunt product that it "does not fit across opening, even at maximum cutout." 32 The failure to supply appropriate templates resulted in a risk that without the proper templates the wrong chemicals could be added to the mixer. The absence of any templates would obviously give rise to an increased risk of splashing from the chemicals. According to Associate Professor Winder such an occurrence using the Ilford templates could contribute to the production of irritating vapours but it could not account for the production of scum, froth and vapours sufficient to produce symptoms of irritation and toxicity. 33 By 10 August 2001 NSCCAHS had received no Fuji Hunt templates from the defendant and had been supplied with the Singapore MSDS which contained information as to glutaraldehyde levels in Part C bottles inconsistent with the information on the box and bottle-labels on the product. Persistent attempts up until that date for further information and clarification by various employees of NSCCAHS to the defendant were unsuccessful. Following the incident on 10 August 2001 the defendant was specifically requested by NSCCAHS to remove the chemicals from its premises. This for reasons unknown was not done with the unfortunate result that staff at Wyong hospital were again exposed to the Fuji Hunt product on 13 August 2001.

34 It must be remembered that the Fuji Hunt product was a new product. It was therefore of critical importance that appropriate measures were taken by the defendant to ensure it was safe to supply to NSCCAHS. No such measures appear even to have been contemplated by the defendant. Mr Fraser in his affidavit for example indicated that the defendant had in place procedures for the introduction of new chemicals but the procedures had not been used for many years, "because Hanimex rarely changed its supplier". I infer from this evidence that the defendant did not turn its mind at all to developing any measures that may have facilitated the safe introduction of the Fuji Hunt product to NSCCAHS. 35 All of the foregoing considerations in my view are indicative of a serious breach of s 18(1)(a) of the 1983 Act, and I approach the sentencing of the defendant on that basis. Foreseeable risk to safety

36 In my view the risk to safety was reasonably foreseeable bearing in mind that the product was a new chemistry, it was delivered without templates and with foreign generated MSDS which did not conform to Australian requirements. In addition up to 10 August 2001 the defendant had been put on notice by NSCCAHS that it had a number of serious concerns about the safety of the product. None of these concerns were addressed by the defendant. Although the evidence discloses that the defendant was not informed of the incident on 27 July 2001 it was contacted and advised of the incident of 10 August 2001. It was also requested by NSCCAHS to take specific measures including the removal of the product from Wyong hospital. The fact that this was not done and the fact that the defendant after the incident of 10 August 2001 knew that the product posed a risk to safety exacerbates the objective seriousness of the offence: see Capral Aluminium Limited v WorkCover Authority of NSW (Inspector Mayo-Ramsey) (2000) 49 NSWLR 610 at [87] - [92]. Consequences

37 A number of staff at Wyong hospital were adversely affected, some seriously, as result of the incidents of 27 July, 10 August and 13 August 2001. Given the contents of the product which were potentially hazardous and toxic and given that the product was new and untested the injuries sustained were serious and could have been more serious. These matters serve to emphasise the objective seriousness of the offence: Maddaford v CSR Limited and Mulgoa Quarries [2004] NSWIRComm 337 at [23]. Deterrence

38 The circumstances of the offence also indicate a clear need for the application of the principle of deterrence, both general and specific. General deterrence is of particular significance because of the obvious need to direct attention to suppliers of substances which are hazardous, toxic or otherwise potentially dangerous that they have obligations under the occupation health and safety legislation. It is also relevant that these suppliers be made aware of the importance of testing new products before releasing them onto the market for use. Equally, the circumstances of the offence highlight the importance of providing adequate information and instruction about hazardous substances being supplied to persons or organisations for use for the first time. 39 Specific deterrence is also relevant because the defendant continues to supply persons and organisations with potentially hazardous and toxic substances. This principle has been recognised as being of particular importance in the area of occupational health and safety legislation: see for example Capral Aluminium Limited at [77]. Maximum penalty

40 The Court was informed during the sentencing proceedings that the defendant had no prior convictions under the 1983 Act. The maximum penalty that may be imposed upon the defendant being a corporate defendant therefore is $550,000. Absence of prior convictions

41 I also take into account on sentence the fact that the defendant has no prior convictions. This entitles it to leniency normally extended to an offender who is not otherwise adversely reported. Remedial steps

42 The number of simple measures were available to the defendant that could have made the risk to safety easily avoidable. Reviewing and updating the procedures to be utilised for new chemistry was one such measure. Other measures which spring to mind include ensuring the MSDS complied with the Regulation and contained updated Australian information about hazardous substances. The Fuji Hunt templates which were available in late May 2001 could and should have been provided. 43 The existence of these measures and the ease with which they could have been invoked to obviate the risk to safety serves to emphasise the objective serious of the offence. Plea of guilty

44 The defendant has submitted that it entered its plea of guilty at the earliest reasonable opportunity because the plea which was entered was entered to significantly different particulars from those contained in the original application for order. The plea of guilty was also entered on the fourth day of a contested hearing and was being heard at the same time as proceedings against NSCCAHS for an offence under s 15(1) of the 1983 Act. In such circumstances the defendant submits that no unnecessary Court time has been wasted since the Court would still have been required to hear the proceedings against NSCCAHS and the majority of the hearing time was taken up with the NSCCAHS matter. 45 The entitlement to a discount on penalty by reason of a guilty plea is governed in this State by s 22 of the Crimes (Sentencing Procedure) Act 1999: Sharma (2002) 130 A Crim R 238 at [67] [68]. Section 22 (1) is expressed in the following terms:

(1) In passing sentence for an offence on an offender who has pleaded guilty to the offence, a court must take into account: (a) the fact that the offender has pleaded guilty, and (b) when the offender pleaded guilty or indicated an intention to plead guilty, and may accordingly impose a lesser penalty than it would otherwise have imposed. 46 The binding authority in this State on the subject is R v Thomson; R v Houlton (2000) 49 NSWLR 383; 115 A Crim R 104. That authority suggests a range of between 10 - 25% discount for a plea of guilty. 47 The plea was entered to the offence shortly after substantial amendments to the amended application for order had been made and agreed between the parties. In these circumstances I am prepared to accept that the plea was entered at a reasonably early opportunity. I therefore award a discount of 20%. Remorse and contrition

48 The defendant is also entitled to a measure of leniency as a result of the plea of guilty and in addition to the discount of 20% granted in reduction of the penalty to be imposed by reason of utilitarian considerations: Winchester (1992) 50 A Crim R 345 at 350. Post accident measures

49 The defendant is also entitled to have taken into account in its favour a number of post offence remedial measures which have been implemented. These measures are set out by Mr Fraser in his affidavit. They include new and extensively updated procedures in relation to the introduction of new products to be supplied by the defendant. The defendant also now ensures that it supplies MSDS to all customers both in hard copy and on its website. Safety training seminars have also been implemented in relation to the safe handling of chemistry and a system entitled "Complaints and Incidents and Opportunities for Improvements" (CIAO) has also been developed to improve quality assurance. 50 These measures all serve to mitigate the otherwise objective seriousness of the offence. Penalty

51 In determining penalty against the defendant I have taken into account the objective seriousness of the offence, the subjective features described above and the absence of prior convictions. All of these factors have been considered by reference to the Crimes (Sentencing Procedure) Act 1999 in particular s 21A. Orders

52 In Matter No IRC 4109 of 2003 I make the following orders:

The defendant Fujifilm Australia Pty Ltd (ACN 000 064 433) (formerly Hanimex Pty Limited) is convicted of the offence.

The defendant Fujifilm Australia Pty Ltd (ACN 000 064 433) (formerly Hanimex Pty Limited) is fined $100,000 with a moiety to the prosecutor.

The defendant Fujifilm Australia Pty Ltd (ACN 000 064 433) (formerly Hanimex Pty Limited) is to pay the costs of the prosecutor as agreed, or in the absence of agreement as assessed.

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At a glance

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Judgment (51 paragraphs)

Parties

Cases Cited (6)