Inspector Paul Kenneth Wade v Ken Mathews Haulier Pty Limited t/as Ken Mathews Landscaping Supplies

Industrial Relations Commission (NSW)|2005-02-23|Before: Backman J

Industrial Relations Commission of New South Wales in Court Session

CITATION: Inspector Paul Kenneth Wade v Ken Mathews Haulier Pty Limited t/as Ken Mathews Landscaping Supplies [2005] NSWIRComm 85

Prosecutor Inspector Paul Kenneth Wade

CATCHWORDS: Occupational Health and Safety - sentencing - injuries sustained by employee who was crushed between a loader bucket and concrete block - employee's use of alternative work practice which was unsafe and, of which the employer was aware but took no steps to prevent - employee's youth and inexperience relevant on sentence - lack of training and instruction - risk was obvious and foreseeable - simple, inexpensive measures could have obviated the risk - need to formalise directions and instructions - special significance of general deterrence - relationship between seriousness of breach and result of breach - early plea of guilty - leniency afforded on basis of plea of guilty and absence of prior convictions - co-operation - contrition - implementation of post accident measures - capacity to pay a fine - penalty - orders.

Fines Act 1996 LEGISLATION CITED: Occupational Health and Safety Act 2000

Capral Aluminium Limited v WorkCover Authority (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Ferguson v Nelmac Pty Limited (1999) 92 IR 188 Genner Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Guillarte) (2001) 110 IR 57 Inspector Barbosa v Mc Donald's Australia Limited (2003) 125 IR 270 Inspector Barry Childs v Kirk Group Holdings Pty Limited and Anor (2005) NSWIRComm 1 CASES CITED: Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (1999) 90 IR 464 Morrison v Powercoal Pty Ltd & Anor (No. 3) (2005) NSWIRComm 61 R v Shenton (2003) NSWCCA 346 R v Thompson, R v Houlton 49 NSWLR 383, 115 A Crim R 104 WorkCover Authority of New South Wales (Inspector Benbow v Converquip Pty Limited (2001) 106 IR 258

Prosecutor J. Rodney Solicitor Carroll & O'Dea Lawyers LEGAL REPRESENTATIVES:

Defendant R. Warren, of counsel Solicitor Rankin Nathan Lawyers

12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Inspector Paul Kenneth Wade v Ken Mathews Haulier Pty Limited t/as Ken Mathews Landscaping Supplies (ACN 072 739 658).

Prosecution under s8(1) of the Occupational Health and Safety Act 2000

1 Ken Mathews Haulier Pty Limited t/as Ken Mathews Landscaping Supplies, the defendant, conducts a business which supplies materials such as mulch and gravel, for landscaping. The defendant also undertakes the business of earthmoving and tipper truck hire. It operates its business from premises at 13 Nevin Close, Gateshead, New South Wales ("the premises"). 2 The defendant employed Leslie Charles Harvey ("Mr Harvey") as a plant/machine operator/truck driver, and, Nathan James Stephenson ("Mr Stephenson") as a yard hand/labourer. 3 On 17 June, 2003 Mr Stephenson was assisting Mr Harvey to load concrete blocks onto trucks at the premises. The concrete blocks were made by pouring concrete into metal block moulds and inserting a bent piece of reinforcing steel bar into the top of the block for use as a lifting point. The concrete blocks were approximately 800mm high, 540 mm wide, 1000mm in length and weighed approximately 920 kg. They were moved around the site by using a CAT front-end loader ("the loader") with a chain and hook attached to a lifting point in the top of the loader bucket. The bucket of the loader was approximately 3000mm long and 1000mm wide. 4 The procedure employed was that Mr Harvey drove the loader up to a concrete block with the bucket lowered. Mr Stephenson approached the bucket from the side and attached a chain and hook from the top end of the loader bucket to the lifting point in the top of the concrete block. At that point, Mr Harvey lowered the bucket and then turned it back to take up the slack in the chain and lift the block. The bottom edge of the bucket would then come forward against the block to stabilise it and prevent it from swinging while it was being moved. When the block arrived at its destination, Mr Harvey lowered it to the ground and Mr Stevenson moved in to detach the hook and chain. 5 On 17 June 2003, the concrete blocks were being loaded using the method referred to above, onto a float at the premises. Mr Norman McBlane, a truck driver for the company that owned the float, was assisting by unhooking the chain when the blocks were being loaded onto the float. 6 It was intended that a total of twenty two blocks would be loaded onto the float. After loading seven blocks without incident, the eighth block presented a problem to Mr Stephenson when he found that he could not employ the usual procedure of approaching the bucket from the side and attaching the chain and hook to the block. This was because a pile of landscaping material was in the way. Instead, Mr Stephenson climbed on top of the block as the loader approached with the bucket lowered. As the bucket was lowered Mr Stephenson came forward on all fours to grasp the hook. Suddenly a customer drove up to the side of the loader and distracted Mr Harvey who, because of the distraction, kept on lowering the bucket. As a result Mr Stephenson was trapped between the bucket and the concrete block. 7 Mr Stephenson received fractures to his pelvis on each side of his spine, and, damaged nerve endings at the base of his spine, which caused loss of feeling on the left hand side of his body, including his left leg, foot, buttock, testicle and the left side of his penis. 8 At the time of the accident Mr Stephenson had been employed as a casual employee by the defendant for approximately 2.5 months. He was seventeen years of age and had no experience in working around operating machinery. 9 The procedure employed by Mr Stephenson at the time of the incident, namely, climbing on top of the block to grasp the hook as the bucket lowered, was a procedure Mr Stephenson had used on other occasions, when assisting with the lifting of concrete blocks. Both the defendant and Mr Harvey were aware of this procedure. 10 When Mr Stephenson commenced work with the defendant he received verbal instruction from Mr Kenneth Allen Mathews ("Mr Mathews"), the director of the defendant, on the procedure to be adopted when lifting concrete blocks. Part of the instruction was a caution to Mr Stephenson that he should ensure that the loader operator could see him. The agreed statement of facts tendered by the prosecutor on sentence, observes that Mr Stephenson was given limited training and learned on the job. The Charge

11 The defendant has been charged under s8(1) of the Occupational Health and Safety Act 2000 ("the Act") with, being an employer, it failed, on 17 June, 2003 to ensure the health, safety and welfare at work of all its employees, in particular, Mr Stephenson. 12 The charge has been particularised as follows: "The defendant failed to provide and maintain a safe system of work for the loading and unloading of concrete blocks that was safe and without risk to health and in particular it was unsafe in that it allowed employees access underneath the bucket of the CAT Front End Loader during the loading process."

13 On sentence the prosecutor, represented by Mr Rodney, solicitor, tendered a bundle of documents which comprised an agreed statement of facts dated 20 December, 2004, a factual report of the prosecutor dated 8 July, 2003, a statement of the prosecutor dated 24 March, 2004 and 8 photographs, four taken by the prosecutor on 3 July, 2003 and the other four taken on 7 July, 2004. The prosecutor also informed the court that the defendant had no prior convictions. The case for the defendant

14 The defendant read into evidence without objection the affidavit of Mr Mathews, sworn on 8 February, 2005. In the affidavit, Mr Mathews explained his business operations, the circumstances under which Mr Stephenson came to be employed by the defendant, the various safety remedial measures the defendant has implemented since the offence, and, information relating to the defendant's capacity to pay a fine. Prosecutor's submissions

15 Mr Rodney, on behalf of the prosecutor, contended that at the time of the incident Mr Stephenson was placed in a vulnerable position since his only means of protection was his reliance on the loader operator to cease operations at an appropriate time. The risk to Mr Stephenson (of being crushed) was made more serious in the circumstances because communication between Mr Stephenson and Mr Harvey was limited. Mr Stephenson could not signal to Mr Harvey to cease operations. This situation was compounded by the fact that the work took place in an area to which customers had access. Customers were also a source of distraction for the loader operator from time to time. 16 The prosecutor submitted that the circumstances of the offence called for significant and appropriate weight to be given to both general and specific deterrence. In relation to specific deterrence the defendant continues to be an employer and to own and operate a substantial business. 17 According to the prosecutor the risk to safety here was both obvious and reasonably foreseeable. The relevant risk was the risk of being crushed. This risk was in fact foreseen as the defendant was aware of the practice in which Mr Stephenson sometimes engaged, in climbing onto a concrete block while the loader was in operation. Mr Stephenson was also given limited instructions. 18 The element of danger involved in the enterprise was heightened by a number of additional factors which included the fact that Mr Stephenson was out of eye contact with Mr Harvey at the time of the incident, the fact that customers had access to the area and distracted Mr Harvey, Mr Stevenson's inexperience with the procedures, and the lack of any formal assessments or procedures in place by the defendant to ensure workers had adequate knowledge of the loading and unloading operations. 19 The prosecutor directed the court's attention to the sentencing principle which dictates that the penalty lies in the nature and quality of the offence not merely the results, although death or serious injuries may manifest the degree of seriousness of the risk to safety. 20 The prosecutor pointed to the availability of simple and straightforward steps which the defendant could have implemented in order to meet its obligations under the Act. These steps included the following: (i) implementation of a revised system of work whereby one person performs the task of loading and unloading concrete blocks; (ii) training all new employees in the revised procedure; (iii) prominently displaying the revised procedure on the wall at the entrance to the main office; (iv) undertaking a risk assessment which included assessing the risks involved in the loading and unloading operations of the concrete blocks.

21 Subjective features which the prosecutor submitted should be taken into account in the defendant's favour included a plea of guilty entered at the earliest possible stage, the absence of prior convictions, and, the defendant's co-operation with WorkCover during the investigation of the incident. The prosecutor also made reference to the defendant's capacity to pay a fine, noting that although the defendant is a small enterprise and the burden of the fine would fall on Mr Mathews, that the Court should not treat the defendant as an individual. Defendant's submissions

22 Mr Warren, of counsel, appearing on behalf of the defendant acknowledged that the accident was foreseeable but not foreseen, conceding that the defendant was aware of the dangers involved of persons working in the vicinity of machinery. Mr Stephenson, the defendant said, had been given instructions to always keep in view of Mr Harvey. Mr Harvey, an experienced loader driver, was nevertheless distracted at the time by a customer. 23 The defendant also conceded that the practice employed by Mr Stephenson at the time of the incident which involved him climbing on top of the concrete block was a practice, "when and as required", although it was not the usual practice. 24 Mr Mathews, the director of the defendant, was present in court and expressed his deep regrets for the incident. Mr Stephenson's father still works for the defendant and is a personal friend of Mr Mathews. Mr Stephenson has obtained employment elsewhere in a blind manufacturing business. 25 The defendant contended that it had acted quickly following the incident. It co-operated fully with WorkCover. It changed the procedure for loading and unloading concrete blocks so that just one person could safely do the job. An occupational health and safety management company was engaged by the defendant and extensive work in the form of conducting training sessions, risk assessments and formulating safe work method statements, has been undertaken. The defendant, since November 2004, has a fully documented occupational health and safety management system. The defendant called a meeting of its employees in order to present and explain the new safety management system. All employees are required to read the document and sign off, acknowledging that they have both read and understood the contents. 26 Attached to the affidavit of Mr Mathews are a number of documents addressing the defendant's financial circumstances for the period 1 July 2001 to 30 June 2004. The financial accounts which are attached show that the year ending 30 June 2004 was the first year in which the defendant sustained an operating profit, being $125,790.00. The documentation also shows that Mr Mathews is paid director's fees by the defendant in the sum of $600.00 per week gross. According to Mr Mathews he also obtained a loan from Domayne Financial Services in the sum of $350,000.00, which was taken out by him in order to satisfy a property settlement following his divorce. Mr Mathews says in his affidavit that he is repaying the loan from monies deposited in his Greater Building Society accounts which leaves him very little money to live on. 27 Mr Warren, on behalf of the defendant, submitted that its business was small and that any fine imposed on the defendant would impact directly upon Mr Mathews, who, as the documentation showed, was drawing a modest salary for director's fees. 28 The defendant also relied on its early plea of guilty, its absence of prior convictions, and its co-operation with WorkCover as matters which the Court was asked to take into account in its favour on sentence. Consideration

29 In my view this is a very serious breach of the Act. Mr Stephenson had no experience in working around operating machines. He was seventeen years of age, and had been employed by the defendant for a short period of time, only 2.5 months. He was given no adequate training, and was provided with only the most rudimentary set of instructions to guide him. He engaged in a practice which was patently unsafe. Not only was the defendant aware that he engaged in that practice, but it took no steps to prevent Mr Stephenson from continuing in the practice. The area in which the work was being performed at the time of the accident was one to which customers had access, and where Mr Harvey, notwithstanding his experience, was so completely distracted by a customer that he forgot about Mr Stephenson who was at the crucial time on top of the concrete block trapped between the concrete block and the descending bucket. According to Mr Mathews he gave Mr Stephenson an instruction which was to ensure that the loader operator could always see him. Such an instruction was not helpful in circumstances where the loader operator, Mr Harvey, was not, in turn, looking out for Mr Stephenson's location having been momentarily distracted by the customer. 30 The engagement of a young and inexperienced worker in a business which operates potentially hazardous machinery and where a risk to safety exists, enhances the objective seriousness of the offence: Inspector Barbosa v Mc Donald's Australia Limited (2003) 125 IR 270, per Walton J, Vice-President at [113]. 31 The risk to safety which arose as a direct result of the unsafe work practice (climbing onto the concrete block), and, of which the defendant was aware, was an obvious risk and a foreseeable risk. Moreover, it arose in circumstances where Mr Stephenson was forced to depart from the usual procedure of approaching the blocks from the side and adopt an unsafe procedure, because a particular block was obstructed by a pile of landscaping material. 32 Once Mr Stephenson climbed onto the concrete block he was entirely dependant for his safety on the loader operator, and entirely reliant on the loader operator to stop the descending bucket at the appropriate time. Failure by the loader operator to do so had the inevitable consequence that Mr Stephenson would be crushed. 33 The prevailing circumstances which gave rise to a foreseeable risk to safety include the following items of evidence, and inferences which may be drawn from the evidence: (i) the defendant gave limited and ineffective instructions to Mr Stephenson about the procedure to be employed while loading and unloading concrete blocks; (ii) Mr Stephenson was young and inexperienced and had little or no experience in working with large operating machinery; (iii) Mr Stephenson was forced to employ the alternative and unsafe work procedure of climbing onto the concrete block when the concrete block became obstructed by landscaping material; (iv) the defendant knew that Mr Stephenson on occasions employed this alternative procedure but took no steps to ensure the procedure was not used; (v) the action of climbing onto the concrete block while the loader was in operation exposed Mr Stephenson to the very obvious risk of being crushed; (vi) the area in which the loading and unloading was being done was also one to which customers had access and therefore the potential existed to distract or otherwise interfere with the operation in some way. 34 The existence of an obvious and foreseeable risk to safety renders the offence serious: Inspector Barry Childs v Kirk Group Holdings Pty Limited and Anor (2005) NSWIRComm 1, per Walton J, Vice-President at [39] citing, with approval Capral Aluminium Limited v WorkCover Authority (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 at [82]. 35 The objective seriousness of this offence is compounded by the simple, inexpensive and obvious measures that could have been implemented by the defendant in order to obviate or eliminate the risk to safety. An instruction issued to Mr Stephenson by the defendant not to, under any circumstances, climb onto the concrete block during the loading and unloading operations could have avoided the risk. The procedure implemented by the defendant following the accident of ensuring that the task was performed by just one person was another simple, inexpensive way of eliminating any risk to safety which might otherwise arise. 36 Given the inherent dangers associated with the loading and unloading operation, which were heightened in my view by the lack of proper instructions to, and the youth and inexperience of, Mr Stephenson, there may well have been a need to formalise a set of directions or instructions for the operation. The need for some formal training becomes even more acute in the circumstances where Mr Stephenson, with the implied sanction of the defendant, adopted an alternative procedure which exposed him to a risk of serious injuries . Such a need for something more than "on the job" training was recognised by the Full Court in Genner Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Guillarte) (2001) 110 IR 57, at 73, where it was said: "Whilst the lack of documented procedures will not always indicate a deficiency in the training provided by an employer it may, in some cases, constitute an indication the training was less comprehensive or systematic than was required. Where a worker may be required to autonomously adopt alternative work procedures in response to changing circumstances and those alterations may present serious risks to that worker or others, it would be prudent, at the very least, to ensure that "on-the-job" training was formalised and documented with a view to ensuring a comprehensive coverage of all facets of the work and full appreciation of any safety risks by the employee concerned."

37 In this matter both general and specific deterrence are relevant. The defendant, on the evidence, runs a small landscaping business which operates large and heavy pieces of equipment and machinery in an inherently dangerous environment. The need for adequate training, supervision and instruction cannot be emphasised enough in the circumstances. Here, attention to occupational health and safety matters prior to the accident was practically non-existent. In too many instances involving small to medium sized businesses utilising potentially dangerous items of equipment and machinery it takes a serious accident to occur before a particular business is jolted into a realisation of the necessity of taking its occupational health and safety obligations seriously. 38 A recent statement of the special significance of general deterrence, for example, in the context of occupational health and safety appears in Kirk Group Holdings Pty Limited at [44], "The need for general deterrence looms large in this matter. The Court in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 emphasised the need to impose suitable penalties which will deter others from breaching their health and safety obligations. The Court held at [69] - [70]: The purpose of the Act is well known and often referred to in judgments of this Court. In my view, it is important, when considering notions of general deterrence, that the Court be cognisant of the fact that the Act is for the benefit of the public generally and particularly employees at work. The goal is the prevention, deterrence and punishment of breaches of health and safety requirements. The notion of general deterrence is well understood. However, in my view, and in accordance with what was stated by the Full Court in Capral Aluminium (at [72] - [74]), in cases such as this, it should be reiterated that "one of the main purposes of punishment, ... is to protect the public from the commission of such crimes by making it clear to the offender and to other persons with similar impulses that, if they yield to them, they will meet with severe punishment" (emphasis added): R v Rushby [1977] 1 NSWLR 594 at 597 per Street CJ citing R. v Radich [1954] NZLR 86 at 87 (adopted by this Court in Capral Aluminium at [72]).

Further, I would note that it has been described as "the fundamental duty of this Court" to ensure that any penalty imposed is severe enough to "compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace": Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 adopted in Capral Aluminium (at [74])." 39 Another factor which serves to emphasis the seriousness of the breach is that the consequences of the breach, clearly, could only be serious injuries, even death. The principle, which has been repeated many times, has most recently been referred to by the Full Court in Morrison v Powercoal Pty Ltd & Anor (No. 3) (2005) NSWIRComm 61, at [93], [94] and [95]. Early Plea of Guilty

40 The prosecutor has submitted that the defendant entered a plea of guilty at the earliest possible opportunity. A plea of guilty was formally entered on behalf of the defendant on 16 November, 2004. The application for order was filed on 23 July, 2004. In the meantime it appears that the defendant changed solicitors, and, at one directions hearing on 13 October, 2004 it seems that no one attended Court to represent the defendant. This resulted in a further adjournment of the proceedings until 16 November, 2004 at which time the plea was entered. 41 The file contains a rather brief and incomplete chronology of events which is not sufficient to indicate that the plea was or was not entered at the first reasonable opportunity. In the circumstances I accept the prosecutor's submission that it was entered at the first reasonable opportunity. In any event the plea of guilty entitles the defendant to a discount of its sentence in accordance with the principles outlined in R v Thompson; R v Houlton 49 NSWLR 383; 115 A Crim R 104. 42 Although there is no requirement to quantify the discount, sentencing judges are encouraged to do so: R v Thompson; R v Houlton. This was emphasised by the Court of Criminal Appeal, New South Wales, in R v Shenton (2003) NSWCCA 346, 17 November, 2003 at [5], [11] and [12]. 43 I consider that in the circumstances here, an appropriate discount for the utilitarian value of the plea is 25 percent. Other Personal Factors

44 The defendant is also entitled to a measure of leniency on the basis of its plea of guilty and also because it has no prior convictions. The defendant has fully cooperated with WorkCover authorities throughout the investigation and has expressed deep regret for the accident to Mr Stephenson. In addition, and as part of its cooperation, the defendant implemented some comprehensive measures to ensure the safety of its workers. The procedure employed for the loading and unloading of its concrete blocks, for example, was immediately altered following the accident to prevent a repetition of the accident. Also, the defendant commissioned an occupational health and safety management company to put in place measures aimed at improving and ensuring safety. 45 All these personal features operate to mitigate the objective seriousness of the offence although it must be kept in mind that such features must play a secondary role in the sentencing process to the more significant objective criteria: Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474. Defendant's Capacity to Pay a Fine

46 The defendant submitted that it had limited resources to pay a heavy fine. The financial year ending 2004 was the first year in which the defendant had made a profit. The defendant's director, Mr Mathews, drew a modest salary of $600.00 per week. Its business was small and any fine imposed would directly impact upon Mr Mathews, the director. 47 In Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209, Wright J, the President, dealt with the significance of the defendant's capacity to pay in the sentencing process as follows:- "The financial position and more particularly the means of the defendant should be taken into account in relation to the question of penalty. Otherwise it is inappropriate to consider the fact or amount of legal costs, consulting and other fees. In any event, it was not submitted that I should. I should, as submitted by counsel for the informant, consider not only the financial information included in the correspondence from the accountants, but also the defendant's asset position. Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. The penalty imposed will reflect the consideration given to this aspect as discussed above. I have also had regard to the submissions filed by the informant in respect of the additional affidavit and issues arising from it. Further, I have considered and applied the authorities referred to therein, particularly Haynes v C I & D Manufacturing (at 457-458); R v Sgroi (1989) 40 A Crim R 197 and Rahme v The Queen (1989) 43 A Crim R 81. Finally on this aspect, I indicate that I do not consider that the penalties imposed are beyond the means of the defendant." 48 Similarly, in WorkCover Authority of New South Wales (Inspector Benbow v Converquip Pty Limited (2001) 106 IR 258 at 271-272, his Honour, the President observed:- "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 has particular relevance." 49 In other words, even if it be proved that a defendant has limited financial means, the objective circumstances of the offence may nevertheless dictate a heavy penalty. 50 Under s6 of the Fines Act 1996 the court, in the exercise of its discretion to fix the amount of a fine is required to consider a number of matters including a defendant's means. I have considered all the matters before me as to the defendant's capacity to pay a fine. I find that the circumstances of the breach are of such seriousness that to impose a notional fine, for example, would not be paying appropriate regard to the importance of general deterrence.

51 The maximum penalty here is $550,000.00. Taking into account the objective seriousness of the offence, the discount for personal factors in mitigation, including the early plea of guilty, and, the defendant's capacity to pay a fine, I impose a fine of $130,000.00. Orders

52 I make the following orders: 1. Ken Mathews Haulier Pty Limited, trading as Ken Mathews Landscaping Supplies, the defendant, is convicted.

The defendant, is to pay a fine of $130,000.00, with a moiety thereof to the prosecutor.

The defendant, is to pay the prosecutor's costs as agreed, or in default, as assessed.

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