Inspector Michael Dall v D F McCloy Pty Limited. Prosecution under s 16(1) of the Occupational Health and Safety Act 1986 - [2002] NSWIRComm 51 - NSWIRComm 1996 case summary — Zoe

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Inspector Michael Dall v D F McCloy Pty Limited. Prosecution under s 16(1) of the Occupational Health and Safety Act 1986

[2002] NSWIRComm 51

Industrial Relations Commission (NSW)|1996-09-27|Before: Haylen J, Hungerford J, Mr P

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Source facts

Court

Industrial Relations Commission (NSW)

Decision date

1996-09-27

Before

Haylen J, Hungerford J, Mr P

Source

Original judgment source is linked above.

Judgment (88 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

[2]

CITATION : Inspector Michael Dall v D F McCloy Pty Limited. Prosecution under s 16(1) of the Occupational Health and Safety Act 1986 [2002] NSWIRComm 51 PROSECUTOR Inspector Michael Dall PARTIES : DEFENDANT D F McCloy Pty Limited

[3]

FILE NUMBER: IRC 3972 of 2000 CORAM: Haylen J CATCHWORDS : Occupational Health and Safety Act 1983 - s 16(1) - plea of guilty - sentencing of co-offenders - culpability of head contractor - primary responsibility borne by sub-contractor - principle of parity of sentencing applied - financial position of defendant considered - previous good record and reputation established - discount for early plea and other subjective factors - penalty imposed Occupational Health and Safety Act 1983 s 16(1) LEGISLATION CITED : Crimes (Sentencing Procedures) Act s 10 Occupational Health and Safety (Certificate of Competency) Regulations 1996 par 26 Doan (Chau Thi Bao) unreported NSW CCA 27 September 1996 Haynes v CI & D Manufacturing Pty Ltd and anor (1995) 60 IR 455 Inspector Carmody v Consolidated Constructions Pty Ltd (2001) 109 IR 316 Lowe v The Queen (1984) 154 CLR 606 CASES CITED : O'Brien (Edward Paul) unreported NSW CCA 7 April 1997 Postiglione v The Queen (1997) 189 CLR 295 at 303 R v Bibi (1980) 2 CrimApp R (S) 177 at 179 Steele (Robert Ernest) unreported NSW CCA 17 April 1977) WorkCover Authority of NSW (Inspector Benbow) v Converquip Pty Ltd (2001) 106 IR 258 WorkCover Authority of New South Wales (Inspector Dall) v R & D Enterprises (Newcastle) Pty Ltd [2001] Hungerford J NSWIRComm 329 - delivered 11 December 2001 HEARING DATES: 11/22/2001 DATE OF JUDGMENT: 03/22/2002

[46]

The alleged offence under section 16(1) of the Occupational Health & Safety Act, 1983 is that the defendant being an employer failed to ensure that persons not in its employment and in particular, Patrick Lee Sales, were not exposed to risks to their health and safety arising from the conduct of its undertaking while such persons not in the defendant's employment were at its aforesaid place of work in that: (a) The defendant failed to ensure that all works conducted at its aforesaid site, including works conducted on its behalf by subcontractors, and in particular R & D Enterprises (Newcastle) Pty Limited, were carried out safely in that work was carried out from scaffolding that was not suitable and safe in contravention of regulation 73(1) of the Construction Safety Regulations, 1950. (b) The defendant failed to ensure that all works conducted at its aforesaid site, including works conducted on its behalf by subcontractors, and in particular R & D Enterprises (Newcastle) Pty Limited, were not carried out safely in that work was done from a mobile scaffold when there was no proper fencing or other means of securing the safety of non-employees working from the scaffold where they were liable to fall a distance of more than 1.8 metres contrary to regulation 73(3) of the Construction Safety Regulations, 1950. (c) The defendant allowed its subcontractor, R & D Enterprises (Newcastle) Pty Limited to carry out work from a mobile scaffolding which was in excess of 4 metres in height when the non-employee of the defendant doing such work did not hold a recognised qualification in relation to that kind of work contrary to section 8(2) of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996. 4 For the defendant an affidavit of Jeffrey Raymond McCloy was tendered. Mr McCloy was one of the two directors of the defendant, the other director being his father. The company had been incorporated in 1961 and from that time had carried on business as a builder of commercial premises. In 1995, the defendant opened a second office in Sydney, increasing its staff from approximately 30 to over 45. When the injury was suffered by Mr Sales in 1998, the company was still employing approximately 45 people.

[66]

26 In Haynes v CI & D Manufacturing Pty Ltd and anor (1995) 60 IR 455 the Full Court of the Industrial Court had evidence that the defendant companies had been operating for some 38 years and had never been the subject of charges brought under industrial safety legislation. There had been an expansion of the business but due to the downturn in the building industry the companies had to subsidise the Somersby plant where the fatal accident had occurred: the overall position was that the financial viability of the group was said to be "precarious". A director of the companies had said that he had put a substantial amount of his own money into the enterprise to enable it to survive. In relation to that issue the Court stated: An issue to which the Court was taken obliquely was the manner in which we should deal with pleas of impecuniosity when considering the fine to be levied. The penalty which the legislature has made applicable to breaches of the OHS Act is a fine, and, as was pointed out by Cullen J in Gordon v MIJO (NSW) Pty Ltd (unreported, Cullen J 2 December 1993, Matter No CT 1002 of 1993), the legislature itself introduced a differentiation of penalty by providing that there should be a different penalty for corporate defendants from that for personal defendants. The number of cases decided under the OHS Act where the corporate structure of the defendant has shown to be a little more than the means of distribution of earnings arising from personal exertion, of where, as a matter of corporate structure, the burden of any fine levied would fall on one person or one family ownership, the Court has seen it appropriate to impose a fine substantially less than if the corporation was functioning as a company with assets of a substantial kind (see Gordon v MIJO (NSW) Pty Ltd; Ford v Warrah Reach Pastoral Company Pty Ltd (unreported, Bauer J, 23 September 1994, Matter No CT 1109 of 1993); Robins v C T Plumbing Pty Ltd (unreported, Fisher P, 16 December 1991, Matter No 522 of 1991) and Mauger v Krcmar Engineering Pty Ltd (1993) 47 IR 359). We consider that as precedent has developed there are two strands to the consideration of fines under the OHS Act. The first comes into play when the defendant is an individual and there is no corporate structure. Where the defendant is a company with the structures above considered, the principles and approach adopted in the cases above cited are to be applied. In our opinion, the respondents here are entitled to have the Court take into account, when assessing the fine, the following matters: the company's industries record -

[72]

27 More recently, the President, Wright J has given consideration to the financial status of a corporation in the sentencing process. In WorkCover Authority of New South Wales (Inspector Benbow) v Converquip Pty Ltd (2001) 106 IR 258 there was evidence of changes in the financial position and operating circumstances of the defendant company after the accident, the subject of the charge under the Act. A variety of corporate changes were explained and there was evidence before his Honour that at the time of the accident the defendant company and the business operated by it was not profitable for the group of companies with which it was associated. The evidence did however demonstrate that the defendant was not a small operation and during the last financial year it had total wages of over $337,000 and was associated with companies of some significance and its overall financial and other circumstances were to be considered in the context that they referred to continuing fixed and floating charges to major banking corporations. In submissions, the defendant in that case related its capacity to pay to a submission made as to s 10 of the Crimes (Sentencing Procedures) Act. There was a real risk, it was submitted, that any order that the Court would make would have no practical effect. It was submitted that such an order would have a potential to be "vacuous" and that it would be inappropriate in such circumstances for the Court to impose a penalty. In regard to these matters the President, Wright J, stated: 53. Section 6 of the Fines Act 1996 makes plain that, in the exercise by this Court of its discretion to fix the amount of any fine, it is required to consider, inter alia, 'such information regarding the means of the accused as is reasonably and practically available to the Court for consideration'. Such matters were considered in Ferguson v Nelmac Pty Ltd and also in Walco Hoist. This was said in the second of those cases (again without setting out the authorities relied upon), at par 27: 'As to the financial position of the defendants, it is to be accepted in terms of general sentencing policy that the means of a defendant are relevant. This consideration may, in appropriate cases, involve a careful examination of the means of the defendant, and consideration of the means of the defendant in fixing the amount of any penalty or fine; … this is, in any event, required by s 6 of the Fines Act … it is to be observed, however, that a consideration of the means of the defendant with the conclusion that a heavy fine may be a burden on the defendant and its financial resources does not necessarily preclude the imposition of a heavy penalty' 54 I accept that the financial situation of the defendant, at least when compared to many cases which come before the Court, is quite unusual. I accept that it has occurred independently of these proceedings or the defendant's culpability under the Act. That is, I accept that the situation of the defendant has arisen from commercial decisions taken bona fide by those controlling it on the basis that the steps were considered to be in the defendant's interests. Nevertheless, to impose a penalty entirely out of step with the objective circumstances of the offence, by having regard as the crucial consideration to the evidence before the Court as to the defendant's financial circumstances, would, I consider, be inconsistent with the role of the Court and would, in particular, represent a failure to impose a sentence with appropriate regard to the importance of deterrence in the sentencing process. In this case general deterrence have a particular relevance. 55 It is clear from what has been said that I consider it inappropriate to provide the benefit of s 10 of the Crimes (Sentencing Procedure) Act and indeed to do so in this matter will be contrary to recent authorities which bind me on that issue; … an important feature of those judgments was the reference to the important public purposes which sentencing under this statute serves. However, to ensure a just outcome in the proceedings before the Court I have taken into account all of the circumstances as to the current operating situation of the defendant and its financial situation. Notwithstanding the submission of the prosecution, I accept those from counsel for the defendant that the defendant at present has no assets, which represents a change in its circumstances. Although it has been essentially a service company it would have been able to pay any fine imposed. 56 The Court would obviously hesitate before it would impose a fine which could be described, as counsel for the defendant did, as "vacuous". However, what the Court must do is take all relevant circumstances into account. In that regard, as well as giving weight to the finding earlier made as to the bona fide commercial decisions which led to the present situation, I should also have regard to the acknowledgement by the defendant that the existence of these proceedings was not the only factor which lead to the defendant being kept in existence. Other considerations include that it had "a place in the market" and that situation is to be seen as having commercial benefit to its associated companies and those controlling them. 57 Taking all those considerations into account, I consider it is appropriate for the Court to impose a fine of significance to reflect the objective circumstances of the offence as found but with regard to all the objective and subjective circumstances to which I shall now return briefly. His Honour went on to impose a fine of $50,000.

[84]

39 It is now clear that parity in sentencing is a matter to be determined by having regard to the circumstances of the co-offenders and their respective degrees of culpability. Different criminal histories and custodial patterns may justify a real difference in the time each will serve in prison and like must be compared with like when applying the parity principle (Postiglione v The Queen (1997) 189 CLR 295 (at 303). This approach does not involve apportioning a total penalty as between persons said to be responsible for the occurrence of the accident. In Inspector Carmody v Consolidated Constructions Pty Ltd (2001 109 IR 316), Hungerford J, speaking of the error of that approach, stated: 48. I am of the view that that principle does not require a sharing or apportionment of culpability (and hence of sentence) but rather is designed to ensure that there should not be a marked disparity between sentences given to co - offenders for the offence for which they have been respectively found guilty. As Mason J, as his Honour then was, commented in Lowe v R (1984) 154 CLR 606 at pp 610 - 611): Just as consistency in punishment - a reflection of the notion of equal justice - is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice. It is for this reason that the avoidance and elimination of unjustifiable discrepancy in sentencing is a matter of abiding importance to the administration of justice and to the community. 49. Brennan J added in that same case (154 CLR at p 617): The sentencing of co-offenders always requires a comparison of their conduct and antecedents. The imposition of comparable sentences upon co-offenders whose respective conduct and antecedents warrant disparate sentences is unjust. Similarly, the imposition of disparate sentences upon co-offenders whose conduct and antecedents are comparable is unjust. A justified sense of unfair treatment is produced in either case. 50. In Postiglione v R (1997) 189 CLR 295 at 301, Dawson and Gaudron JJ cited the above comments from Lowe with approval and emphasised that the parity principle was concerned with treating like with like to do equal justice, but 'in the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances'. I see no support in the parity principle, or in sentencing principles generally, which would support the notion suggested here that a sentence should be fixed at a level larger than what it otherwise would have been for the offence because other persons may also have committed an offence in relation to the particular incident. 40 Earlier, at paragraph 43 of the judgment, his Honour had emphasised that what flowed from settled principles as to the sentencing process was that the penalties were to be determined by reference to the offence. It is these principles as discussed in the preceding paragraphs which I intend to apply in dealing with the present plea.