Inspector Scott Rand v Toffy Pty Ltd t/as ABC Tyrepower and Mechanical

Relevant Principles 8In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s 8(1) of the Occupational Health and Safety Act 2000 with ss 21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The Court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 9Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 10Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR 104, correctly, given the consideration in Markarian, recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. Proper regard is to be had to express legislative provisions and to the relevant statutory regime (Markarian at [27]).

Consideration 11In a consideration as to penalty, the Court assesses the objective seriousness of the offence or, as has been said, "the nature and quality of the offence". The Full Bench commented in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474): ... in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence"... And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk, In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected... 12Toffy Pty Limited was a vehicle car tyre business which commenced in August 2002. Christopher Tofalakis is both the director and registered proprietor of the company. He has provided an affidavit and given evidence before this Court. ABC Tyrepower is a co-operative of several independent businesses coming together to achieve lower prices for services and supplies. When he purchased the business, Mr Tofalakis was given a number of documents regarding the operation of the business. He was not provided with any information regarding the appropriate plant, machinery or other equipment or the maintenance of any such equipment. 13Mr Tofalakis's business was quite successful and in early 2005 he determined he needed more storage space. He decided to use the mezzanine floor of his premises in Rosebery and to do that discussed his intention with a client of his in the tyre business, Mr James Corcoran, who was identified as a metal fabricator. 14He commissioned Mr Corcoran to design, manufacture and install the machinery needed for his access to the mezzanine level and also for Mr Corcoran to underpin the mezzanine to ensure that it could carry the appropriate weight for the storage of tyres. 15However, it became a practice in the workshop for staff to use the lift to access the storage on the mezzanine level. 16Mr Corcoran designed a lift (cage) whose purpose was to move stock from the ground floor to the mezzanine level. There were some fundamental errors in the design of the lift. The cage was to operate with a hoist. A large metal hook connected the cage to the hoist. The hook was soldered to the steel hoist. I accept, as the prosecutor has submitted, there was no proper risk assessment undertaken by either Mr Tofalakis or Mr Corcoran as to the appropriateness of the lift "hoist" being used or being suitable to carry personnel. 17An Hitachi electrical chain hoist was chosen to lift the lift cage. The instructions for such Hitachi chain hoist revealed, "This hoist is intended for industrial use only and should not be used to lift, support or otherwise transport human cargo." Further, the hoist was never approved nor certified nor registered to carry personnel in accordance with the Australian Standards. 18Had the hoist been compliant for lifting persons it would have had emergency braking measures, load rating, back-up devices and interlocking access gate. It is contended that Mr Tofalakis, in instructing Mr Corcoran to design the hoist and cage mechanism, was in breach of his occupational health and safety obligation in accepting Mr Corcoran's system of work. 19At issue between the parties was, further, whether there was a proper maintenance program in place for the operation of the lift. Mr Tofalakis stated, that while there was not a formal and documented program in place, he had been advised by Mr Corcoran to grease the wheels, which he regularly did, and further that Mr Corcoran, when he attended upon the business premises as a client through November 2005, August 2006, September 2006, September 2007, May 2008, May 2009 and June 2009, also inspected the lift and the hoist and was satisfied with how they were working. He contends there was therefore a maintenance system in place. 20However, when those inspections are viewed in the context that the equipment was not appropriate and that it was being inspected by the "designer", it is difficult to accept that this was a thorough and professional maintenance programme. 21Further, the defendant has pleaded guilty to a particular asserting he did not have in place a regular system of inspection, testing and maintenance on the equipment. The Court must reiterate that the failure to seek proper professional assistance in the design of the equipment was at the core of this serious breach of the Act. There was an unsafe system of work in place. 22The defendant conceded in submissions that there is a foreseeable element to the offence. A foreseeable element to the offence makes the breach more serious. 23The availability of simple and straightforward steps to remedy the defects in the system is also relevant to the consideration of the objective seriousness of the offence (WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Ltd, unreported decision of Schmidt J dated 25 February 1994). There were known steps that could have been taken which either singly or in combination would have eliminated or reduced the risk. These steps have now been implemented by the defendant. Such activity after the incident is indicative of the fact that each amendment to the system of work was readily available and practicable. 24The principles of general and specific deterrence are also relevant in consideration. The approach to be taken has been considered in some detail in Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [71] to [77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: ... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. 25Mr Tofalakis continues working in his business. The question as to the possibility of re-offending has been addressed by him given the new system of work now in place. The lift has been removed. New plant and equipment have been installed at a further cost to the employer. Now there is a large metal staircase leading to the mezzanine storage level with large handgrips to facilitate human access. Stock is now ferried separately from the ground floor to the mezzanine level by way of a stock belt which carries only stock. The belt lifts up the tyres. When stock is removed, they are placed in a chute that carries the tyres down to the ground level by force of gravity. 26The Court has been assured that in the system for raising and lowering of the tyres, there has been an inspection by WorkCover. I am satisfied, given the movement of tyres is contained within a chute, there is now a safe system of work in place. Access by persons through the ladder to the storage area also appears proper. 27While regular toolbox meetings were held before this incident, I am now persuaded they have been properly documented. Further, there is also now a periodic maintenance check and repair of all machinery performed in accordance with professional guidance and in accordance with the documentary requirements of the new systems purchased. However, there must be a small element of specific deterrence in the consideration as to penalty. 28As to general deterrence, the Court must once more emphasise, notwithstanding the cost, employers in small business ventures must seek professional guidance when choosing and installing equipment to meet their business needs. The need for safe machinery became a statutory requirement through workplace safety laws as early as 1926. The circumstances surrounding this incident reveal once more the Court must draw attention to the necessity to provide safe equipment at every work site. There will therefore be an element of general deterrence in the Court's consideration of penalty. 29It is submitted, in mitigation, that Mr Tofalakis properly instructed Mr Corcoran and relied upon Mr Corcoran's expertise and therefore there was no general laxness or want of diligence in relation to workplace safety on the part of the defendant Corporation. However, the circumstances reveal there was not a lot of wisdom in the selection of the expert advice sought nor a risk assessment of the task. 30Although the gravity of the injury actually resulting from the breach does not, of itself, affect the level of penalty, the occurrence of death or serious injury manifested a degree of seriousness of the relevant detriment to safety. In Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ... 31The two employees who were in the lift (to which the hoist was attached) when the hoist snapped away have given evidence before the tribunal through affidavit. They testified there was an existing workplace safety awareness at this work site. They also testified as to the appropriate care and attention provided to them since the incident. However, both suffered serious injury which included broken legs and a broken ankle. Therefore the risk was most serious and the employer and employees are fortunate as to the level of injury. 32In considering the subjective elements of this offence, the care and attention given to the workers by Mr Tofalakis is taken into account. 33The defendant, it is agreed, has no prior convictions. The defendant's maximum penalty is, therefore, $550,000. The defendant submitted this was an early plea of guilty and that would attract the appropriate discount (R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 A Crim R 104). The Court accepts the defendant entered a plea of guilty at the earliest possible opportunity. The plea therefore attracts the discount on penalty for its utilitarian benefit in accordance with the principles as outlined in the guideline judgment. 34It is agreed Mr Tofalakis, on behalf of the defendant corporation, co-operated with WorkCover throughout the investigation. The company has now complied with all WorkCover requirements in relation to the removal of the hoist and the installation of safety compliant means of access to the mezzanine. 35Section 3A of the Crimes (Sentencing Procedure) Act 1999 contains a comprehensive statement of the purposes of sentencing. It provides: 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. 36Section 21A of the Crimes (Sentencing Procedure) Act sets out the aggravating and mitigating factors that a Court takes into account when determining a sentence. As well as the factors identified in sub-section 2 (aggravating factors) and 3 (mitigating factors), the Court is to take into account any other objective or subjective factors that affect the relative seriousness of the offence. 37The defendant refers to and relies upon s 23A(3) to submit there can be no case that this breach was a planned criminal enterprise. I accept that submission. I further accept the defendant corporation is of good character and is unlikely to re-offend and there has been rehabilitation. I accept the corporation through Mr Tofalakis has shown remorse and accepted responsibility for the defendant's actions. 38The question was raised as to the application of the principle of totality as a relevant consideration. McHugh J in Postiglione v The Queen (1997) 189 CLR 295 described the operation of the principle of totality thus: The application of the totality principle therefore requires an evaluation of the overall criminality involved in all the offences with which the prisoner has been charged. . . . Where necessary the Court must adjust the prima facie length of the sentences downward in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences. The principle of totality operates to ensure that the total criminality of a defendant in relation to a question is properly assessed (WorkCover Authority of New South Wales (Inspector Ankucic) v McDonalds Australia Limited (2000) 95 IR 383 at [454]). This is usually a principle applied when there are co-defendants. In this case, as best as I can understand the submission, it is that some mitigation should be given to the defendant because of a contribution to the risk by Mr Corcoran who, the defendant believed, held the appropriate expertise to design the equipment. I have a little difficulty with this submission. In an analysis of the system of work, I do not accept the defendant corporation properly ensured that there was the proper professional advice sought in order that there was the correct and safe design of the necessary equipment. 39The Court has examined the design of the hoist that was used to lift the cage. The hoist hook at the level of the connecting steel point to the shaft clearly gave way under the weight of the two men in the cage. The hoist was never designed for that purpose. The connecting section of steel was clearly never designed to carry such weight. While I accept the defendant, through Mr Tofalakis, clearly thought he was dealing with an expert, he can have no mitigation for hiring somebody who was not an appropriate expert. 40Therefore I find no contribution to the risk from Mr Corcoran and therefore there shall be no mitigation in penalty for this decision by the corporation. 41However, in the circumstances the Court also takes into account the financial circumstances of the defendant corporation. Mr Tofalakis properly puts evidence before the Court as to the circumstances of his corporation. He opined by the end of the year 2010 to a turnover of $1.47 million but by the end of June 2011, reflecting perhaps the economic environment across the State, his turnover was down to $884,000. He acknowledges this 2011 figure also reflects a loan deduction which is reflected in a downward estimate of his gross profit in June 2011. In evidence Mr Tofalakis suggested his corporation in 2012 will have a turnover of about $2.2 million. I find Mr Tofalakis a very honest witness before the Court in relation to his business dealings, although I also believe the business turnover has gone up in 2012. Nonetheless, I accept the profit margins have gone down. I find therefore this is a corporation of limited means (given the overheads for running the business) for the purposes of penalty. 42The Court takes into account all of the above subjective features in mitigation of penalty but notes this offence was serious. 43I find the defendant guilty. 44The defendant is fined in the sum of $65,000. 45There shall be a moiety to WorkCover Authority. The defendant shall pay WorkCover's costs as agreed or assessed.

ORDERS

1. I find the defendant guilty.
2. The defendant is fined in the sum of $65,000 with a moiety to the WorkCover Authority of New South Wales.
3. The defendant shall pay the prosecutor's costs. As to the quantification of costs, I will hear the parties on this issue in the event no agreement is reached. Leave to relist at short notice. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 May 2012