Inspector Stephen Gill v Wayne Thomas Fisher & Ors

CATCHWORDS: s26(1) and s8(1) of the Occupational Health and Safety Act 2000 - corporate defendant and individual defendants (directors as controlling minds of the corporation) - unsafe system of work for shunters - riding on top or side of wagons on moving trains - industry practice no defence - risk obvious - corporation more culpable given knowledge of safer alternative system - s6 of Fines Act 1996, s10 of Crimes (Sentencing and Procedure) act 1999 considered - penalties imposed

Occupational Health and Safety Act 2000 LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Fines Act 1996

Abigroup Contractors Pty Limited v WorkCover Authority of New South Wales (Inspector Maltby) [2004] NSWIRComm 270 Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 Capral Aluminium Limited v WorkCover Authority of NSW (Insp Mayo-Ramsay) (2000) 49 NSWLR 610 Haynes v CI&D Manufacturing Pty Limited (1995) 60 IR 149 Inspector Ken Kumar v David Aylmer Ritchie [2006] NSWIRComm 323 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 CASES CITED: Markarian v R (2005) 215 ALR 213 Millner v Raith (1942) 66 CLR 1 R v Thomson; R v Houlton (2000) 49 NSWLR 383 Tyler v Sydney Electricity (1993) 47 IR 1 WorkCover Authority of New South Wales (Inspector Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316 WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 WorkCover Authority of NSW (Inspector Ankucic) v McDonalds (Aust) Pty Ltd (1999) 95 IR 383 WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited & Anor (No 2) 99 IR 163

Prosecutor: Mr B.G. Docking of counsel Solicitors: Ms P. Blackmore WorkCover Authority LEGAL REPRESENTATIVES: Defendant: Mr M.L. Shume of counsel Solicitors: Mr D.T. Newey Gillis Delaney Lawyers

Prosecution under s26(1) and s8(1) of the Occupational Health and Safety Act 2000

INSPECTOR STEPHEN JOHN GILL v PAUL FRANCIS STAPLETON

Prosecution under s26(1) and s8(1) of the Occupational Health and Safety Act 2000

INSPECTOR STEPHEN JOHN GILL v LACHLAN VALLEY RAILFREIGHT PTY LTD

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

1 These prosecutions are brought by Inspector Stephen John Gill of the WorkCover Authority of New South Wales against Wayne Thomas Fisher (the first defendant) and Paul Francis Stapleton (the second defendant) under s26(1) and s8(1) of the Occupational Health and Safety Act 2000 (the Act) and against Lachlan Valley RailFreight Pty Ltd (the third defendant) under s8(1) of the Act, by way of Applications for Order. 2 It is alleged the first defendant, Wayne Thomas Fisher, contravened s26(1) and s8(1) of the Act in that he failed to: Ensure the health, safety and welfare at work of all the corporation's employees, and in particular, Alan Green, contrary to Section 8(1) of the Act. In particular: a) At all material times, Wayne Thomas Fisher was a director of the corporation. b) The corporation failed to ensure that systems of work were safe and without risks to health and safety in that: i. There was an actual risk of injury to employees by falling from a moving wagon and/or by falling into the path of a moving wagon and its wheels. ii. Aspects of the corporation's unsafe systems of work were any of the following: (a) The corporation failed to prevent employees riding on a moving wagon whilst undertaking shunting work. (b) The corporation failed to provide to its employees any or any adequate information, instruction and training that they were prohibited from riding unsecured on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both. (c) The corporation failed to undertake any or any adequate risk assessment of employees riding on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both. iii. The fatal injury suffered by Alan Green was a manifestation of the risk. 3 It is alleged second defendant, Paul Francis Stapleton, contravened s26(1) and s8(1) of the Act in that he failed to: Ensure the health, safety and welfare at work of all the corporation's employees, and in particular, Alan Green, contrary to Section 8(1) of the Act. In particular: a) At all material times, Paul Francis Stapleton was a director of the corporation. b) The corporation failed to ensure that systems of work were safe and without risks to health and safety in that: i. There was an actual risk of injury to employees by falling from a moving wagon and/or by falling into the path of a moving wagon and its wheels. ii. Aspects of the corporation's unsafe systems of work were any of the following: (a) The corporation failed to prevent employees riding on a moving wagon whilst undertaking shunting work. (b) The corporation failed to provide to its employees any or any adequate information, instruction and training that they were prohibited from riding unsecured on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both. (c) The corporation failed to undertake any or any adequate risk assessment of employees riding on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both. iii. The fatal injury suffered by Alan Green was a manifestation of the risk. 4 It is alleged the third defendant, Lachlan Valley RailFreight Pty Ltd, contravened s8(1) of the Act in that: On 1 July 2004 at Port Botany Rail Yard, in the State of New South Wales, being an employer, failed to ensure the health, safety and welfare at work of all its employees, in particular Alan Green, in that the defendant failed to ensure that systems of work were safe and without risks to health contrary to section 8(1) of the Occupational Health and Safety Act 2000. In particular: (a) There was an actual risk of injury to employees by falling from a moving wagon and/or by falling into the path of a moving wagon and its wheels. (b) Aspects of the defendant's unsafe systems of work were any of the following: i. The defendant failed to prevent employees riding on a moving wagon whilst undertaking shunting work. ii. The defendant failed to provide to its employees any or any adequate information, instruction and training that they were prohibited from riding unsecured on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both. iii. The defendant failed to undertake any or any adequate risk assessment of employees riding on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both. (c) The fatal injury suffered by Alan Green was a manifestation of the risk.

The defendants plead guilty to the charge. 5 Mr B.G. Docking, of counsel, appeared for the prosecution and Mr M.L. Shume, of counsel, appeared for the defendants. The prosecution relied upon Agreed Statements of Fact, CCTV still photographs, a Factual Inspection Report dated 1 July 2004 and further photographs, a sketch plan, WorkCover Statement of Interview with David Andrew Apps, affidavit of David Andrew Apps sworn 13 March 2007 and a statement of S.C. Griffin to Inspector Forbes dated 3 August 2004, Statement of John Hull to Inspector Gill and an email dated 23 August 2004 to Inspector Gill from Wayne Fisher plus Prohibition Notices. The prosecution called two witnesses, Mr Hull and Mr Stapleton, and they were cross examined. 6 The defendants tendered a handwritten document, three affidavits of Paul Stapleton, two affidavits of Wayne Fisher with attachments, an affidavit of Joe Ivankovic, an affidavit of Margaret Mary Fisher and an affidavit of Evette Stapleton. Two witnesses, Mr Ivankovic and Mr Fisher were called to give evidence and were cross examined by the prosecution. 7 The Agreed Statement of Facts in IRC2615 of 2006 (the Fisher matter) and in IRC2616 of 2006 (the Stapleton matter) were similar and relevantly read: CORPORATE DEFENDANT 2. At all material times, Lachlan Valley RailFreight Pty Ltd [ACN 062 091 034] ("the corporate defendant") carried on business out of 9 Stoney Batter Road, Minto, in the State of New South Wales. 3. The corporate defendant's business included the provision of rail movement of freight. PERSONAL DEFENDANTS 4. The directors of the corporate defendant as at 1 July 2004 and their respective appointment dates were as follows: a. Paul Francis Stapleton ("personal defendant Mr Stapleton") - 14/01/2000. b. Wayne Thomas Fisher ("personal defendant Mr Fisher") - 07/02/2001. c. John Cordell Hull ("director Mr Hull") - 07/01/2002.

SITUATION OF POTENTIAL DANGER TO HEALTH AND SAFETY 5. The corporate defendant's business included the provision of rail movement of containerised freight to and from Port Botany to areas in Sydney, Newcastle, Wollongong, South Western New South Wales and Western New South Wales. 6. In carrying out that business, there was an actual risk of injury to employees of the corporate defendant falling from a moving wagon and/or by falling into the path of a moving wagon and its wheels. 7. The flat top container wagons mostly used by the corporate defendant had side steps or end/rear steps. The few high-sided container wagons had rear steps. The design of some of the wagons had a fully enclosed floor, others just a skeletal and smooth metal frame which meant there were gaps in the decking of those wagons and only narrow support beams to stand on. The wagon involved in the incident had a side step ladder with handrails at the top at hip height. 8. Employees of the corporate defendant were allowed to ride without any means of physical restraint (other than holding on) on the end / rear steps or side steps or sit on the decking of the wagon with legs over the side or sit about six feet from the back of the wagon if it was a flat top wagon with a full deck. a Mr Watcham stated that if the wagon did not have a step and the wagon had two containers, he would stand on the decking of the wagon between the two containers holding onto the door handles of the containers. b Employees were given a discretion as to how they travelled with the wagons, i.e walking on the side of the track or travelling on the wagons. c An employee, Mr Ruxton, stated that he had walked on wagons (as distinct from riding on) at times when the train was moving. Walking up a string of moving wagons sped procedures up. However, he recognised it was dangerous and tried to cease this practice. He also identified that he had seen other persons walk along a container flat while a train is moving at Botany. It was done to save time on a shunting move so as to position the person in a better position for the next task to be performed. a According to Mr Watcham, in relation to walking along a container flat in motion: " we were never told to, it was never mentioned don't do it; it was just assumed you wouldn't do it." b According to other employees, Messrs Crichton, Johnson and Lloyd Jones, walking on the moving wagons was prohibited by the corporation. 9. Alan Green and Andrew Watcham were employed as train drivers by the corporate defendant. Their roles were to either drive trains or act as a second person for shunting procedures. Shunting means to move trains, rakes of vehicles, or vehicles on lines for purposes other than through-movement. Shunting is one of the biggest components performed. Up to 30 shunting movements a week would be performed by an employee at the Port Botany Rail Yard.

Background Facts 10. On or about 16 November 2001, the corporate defendant applied for accreditation under the Rail Safety Act 2002 . The corporate defendant sought the accreditation under section 18 of the Rail Safety Act 2002 to undertake rail operations on rail infrastructure within New South Wales. 11. On or about 11 February 2003, the New South Wales Department of Transport (now known as the Independent Transport Safety and Reliability Regulator ("ITSRR")), Transport Safety and Rail Safety Regulation Division granted accreditation to the corporate defendant as a railway operator to conduct rail activities. This accreditation superseded the previous accreditation that had been granted by the Department of Transport. 12. The accreditation required the corporate defendant to provide a system for identifying, managing and controlling the risk of carrying out the railway operations for which the accreditation was sought. The system was known as a Safety Management System (SMS). In particular, the accreditation conditions relevantly included: (d) LVFR shall provide the necessary resources (including sufficient number of employees) to ensure that the safety of its rail operations (including those of its contractors and sub- contractors) can be maintained under all conditions. (e) LVFR must further develop, monitor and maintain its communication framework with all relevant parties to ensure that the LVFR provides for the safe operation and maintenance of its railway under all conditions. 13. The corporate defendant's SMS did not specifically cover employees riding on wagons 14. Port Botany Rail Yard was managed and operated by the Rail Infrastructure Corporation (RIC). Various rail operators, including the corporate defendant used the terminals at Port Botany Rail Yard for the movement of freight. 15. The "RIC NETWORK RULES DECEMBER 2002" were issued by RIC. The corporate defendant was subject to those network rules as a component of an Interface Co-ordination Plan (ICP) between RIC and the corporate defendant for Port Botany. An ICP is a version of a Safety Interface Agreement which all accredited persons are required to have in accordance with section 12 of the Rail Safety Act 2002. The condition placed on the corporate defendant by the ICP was that the corporate defendant was to adhere with network rules when operating at Port Botany Yard. In the "Safety Statement" part of those network rules, it stated that employers and contractors in NSW are required to provide a system of work and working environment which is safe and without risk to health. It said: "The Network Rules, Network Procedures, Network Forms and any Operator Specific Procedures (Sops) form part of the system of work." 16. The "Propelling trains" network rule had the "purpose" of " prescribing the rules for making safe propelling movements in the Rail Infrastructure Corporation (RIC) Network" (original italics) relevantly stated the rule said: "The Qualified Worker directing propelling must safely: · Ride in or on the leading vehicle, or · Walk beside the leading vehicle." THE INCIDENT 17. At approximately 12.24 pm on 1 July 2004, the corporate defendant's freight train pulled by locomotive number 1873 ("the train") arrived at the Patrick Terminal at the Port Botany Rail Yard. The train had 17 freight container wagons (container flats) of varying types and was approximately 355 metres in length. The last 13 wagons were empty flat top container wagons that had side step ladders. 18. A two-person crew manned the train comprising of Mr Green (by then employed by the corporate defendant for about 6 months) and Mr Watcham (who started with the corporate defendant in 2000). Mr Green commenced as the driver. The crew would interchange their roles during the day. 19. Mr Green propelled the train into a rail siding no. 13 where the container flats were to be unloaded. The train was then to be shunted from the Patrick Terminal to the P & O Transport Australia (POTA) shipping terminal for reloading. The train had to be moved from one set of lines to another set by forwarding and reversing (propelling) the train. As the train was approximately 355 metres long, the second person or shunter was required to ride at the rear of the train and act as the "eyes" for the driver. The train crew are in contact via radio communication. 20. After the containers were unloaded, Mr Watcham took over as driver and Mr Green was to act as the shunter or the second person. Mr Green possessed the issued hand held radio to communicate with Mr Watcham and the practice was that the radio would be kept in your pocket when not shunting. 21. Whilst the train was at the Patrick Terminal, Mr Green spoke to a security guard working at the site and had a cigarette with her. This security guard variously stated that Mr Green was "in good spirits. He was calm. He seemed relaxed", "He had the radio in his hand" and "During this conversation he seemed normal and he just seemed happy. A short time later Allan ( sic ) received a call from the train driver informing him that the train was ready to go." 22. At about 1.50 pm, Mr Watcham climbed into the locomotive cabin and prepared the train to move out from the Patrick terminal. He established radio contact with Mr Green and told him he was going to drive the train to a stop board to await clearance from the RIC controller to move the train to the POTA line. 23. Mr Watcham drove the train up past a railroad crossing at Penhryn Road towards the stop board. It was Mr Green's role to turn off the bells and lights at the signal crossing box. 24. As the train pulled out of the Patrick Terminal Mr Green switched off the road rail lights and jumped on the front of the last wagon of the train. A short time later, Mr Green was standing at the rear of the last wagon. Mr Green had moved. 25. Mr Green contacted Mr Watcham by radio and informed him that the last container flat had cleared the crossing. He told Mr Watcham that he had turned the bells and lights off and that he was riding on the last container flat. 26. A CCTV camera located in the Patrick Terminal recorded Mr Green riding on the last container flat as it left the Patrick Terminal at 1.55 pm (Attachment 1). 27. Mr Watcham drove the train to the stop board and was instructed by the RIC controller to move onto the POTA line once a nearby train had cleared the junction. Mr Watcham relayed this to Mr Green by radio. 28. Once that train had passed Mr Watcham received clearance to proceed up the line and he contacted Mr Green by radio and told him that they were now cleared to proceed. 29. Mr Green's next task was to advise Mr Watcham when the train's rear had passed the set of track movement points. Mr Green was to step off the wagon and pull the points lever (which changed over the lines). This would allow the train to reverse back into the POTA branch line under Mr Green's direction as he provided "the eyes" for Mr Watcham. After travelling some distance to where Mr Watcham thought the train would have been pulled up by Mr Green and Mr Watcham had not heard from Mr Green, Mr Watcham sought contact with Mr Green via the radio. He then stopped the train and attempted to call Mr Green on his mobile phone and did not receive a response. Mr Watcham said from the last time that Mr Watchman spoke with Mr Green until he stopped the train, the movement was slow and smooth, there were no shudders or other movements that might have caused Mr Green to fall off. The mechanism called a "Hasler tape" located in each engine to record speeds, breakings and times, was not working at the time of the incident. 30. Mr Watcham then contacted the RIC controller by radio and confirmed that the radio frequency was working. Mr Watcham notified the RIC controller that he was going to alight from his train and walk back along the tracks. 31. Mr Watcham set off to retrace the train's movements back to the road crossing at Penhryn Road where he discovered Mr Green lying across one track with what appeared to be wheel marks across the abdomen of his body. Mr Green was deceased at the time. 32. Subsequent investigations determined that Mr Green died from extensive injuries, consistent with being been run over directly across his abdomen region, by 6 wheels (three bogies) on the last two wagons (container flats) on the left hand rail in the direction of travel .

NO WITNESSES TO THE INCIDENT 33. There were no witnesses to the incident. It appears that some time after Mr Green passed the Penhryn Road crossing and spoke to Mr Watcham to confirm the last container flat had cleared the road crossing, he moved onto the second last container flat. 34. The second last wagon was flat topped and consisted of a skeletal frame and did not have sidewalls (Attachment 2).

NSW POLICE & WORKCOVER FINDINGS 35. On 3 August 2004, Senior Constable Brett Griffin of Sydney Crime Scene Section, Forensic Services Group provided a statement and took photographs. · The deceased was on the second carriage [container flat] from the rear of the train. · The deceased has appeared to have fallen from the second carriage [second last container flat], down through gaps in the platform and fell in front of the nearside rear wheels of the train, which then ran over the deceased's abdomen area." 36. Inspector Gill, who attended the scene on the day of the incident, formed the same opinion as Senior Constable Griffin. The frame of the second last wagon had boot prints on it and there were what appeared to be fresh blood stains on the rear wheels of both the second last and last wagon's wheels (Attachments 2). 37. As seen above, security video footage taken shortly before the fatality occurred shows Mr Green to be riding on the last wagon. WorkCover's investigation has not revealed any known reason why Mr Green moved from the last to second last wagon. 38. The result of subsequent screening tests on Mr Green's blood, urine and liver were negative - indicating that he was not under the influence of alcohol, any medication or illicit substance at the time of death. 39. Mr Watcham said: "In the time that I worked with Allan ( sic ) I would say that he was fairly safety conscious. I certainly have never seen him do anything that would be considered remotely dangerous".

CORPORATE DEFENDANT'S FAILURES (a) Failure to prevent employees riding on a moving wagon whilst undertaking shunting work

40. Some employees said that it was only when it involved short distances that they used the alternative method of walking next to wagons. 41. It was normal industry practice in New South Wales and accepted by the corporate defendant to ride on wagons whilst the train was in motion during shunting . 42. After the incident, on 2 July 2004, Inspector Gill issued Prohibition Notice No. 7-59201 to the corporate defendant prohibiting persons riding unrestrained and at risk of falling through stepladders on the side of moving wagons. 43. On 2 July 2004 Inspector Gill also issued Prohibition Notice No. 7-59198 to the corporate defendant prohibiting employees riding or walking on container flats with no floor whilst the train is moving. 44. On 6 July 2004 the Independent Transport Safety and Reliability Regulator (ITSSR) issued a Prohibition Notice to all rail operators in NSW that: · Prohibited employees, contractor or other persons under their control from riding railway rolling stock [including container flats] (whether outside, within or upon that rolling stock) unless riding within a designated operating station or other enclosed space specifically designed to protect persons during the movement of the rolling stock. · Directed operators to take all necessary measure to ensure that safety workers [personnel] and other persons are immediately prohibited from riding on rolling stock [including container flats], including during train movements in yards, terminal and siding, unless riding within a designated operating station or other enclosed space specifically designed to protect persons during the movement of the rolling stock".

45. The corporate defendant no longer permits the second person to ride unsecured on either the top of the wagon or on the side ladders whilst shunting. 46. The industry has now adopted the practice of walking beside the wagon when shunting.

(b) Failure to provide to its employees any or any adequate information, instruction and training that they were prohibited from riding unsecured on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both.

47. The corporate defendant did not provide any or any adequate instruction to Mr Green or Mr Watcham to prohibit them riding unsecured on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work. 48. The RIC rules were provided by the corporate defendant to its employees. The corporate defendant did have a manual, but it did not address whether or not to ride or walk next to wagons when shunting. The manual focused on radio protocol and signalling when shunting. 49. Verbal training, instructions and information on shunting trains was given mostly by Mr Fisher and other accredited trainers employed by LVRF when employees started working with the corporate defendant. During this training the defendant emphasised when riding on wagons to hold on firmly. On the third day, subject to the confidence of individual being trained the employee was required to perform the second person's job. The driver trainer would then assess the competency of the employee, based on their performance, qualifications and training. They were usually assessed by Mr Fisher, or other accredited trainers and assessors. 50. Prior to commencing employment with the corporate defendant, Mr Green had experience in the rail industry. Mr Green held certificates of competency issued by Southern Cross Rail Training Pty Ltd in for example Basic Safeworking, Track control (B-Directional) Systems (15 September 2000), Safeworking Train Order Working (6 June 2002) and New Network Rules & Procedures Operations Safeworking Stage 2 & 3 (22 November 2002). Mr Green held certificates of achievement issued by The Instruction Company Pty Ltd in for example: RIC Network - Work on Track Rules and Operating Procedures (2 October 2001). 51. On 20 January 2004, Mr Fisher assessed Mr Green as competent in a number of locomotive and train areas such as pre commencement responsibilities, locomotive preparation in the depot and train examination. 52. On 27 February 2004, Mr Stapleton (as trainer) assessed Mr Green as competent in an initial driving trial from Botany depot to Cooks River. 53. After the incident and following the issue of the WorkCover Prohibition Notices on the corporate defendant, a new procedure has been introduced in which employees are no longer permitted to ride unsecured on either the top of the wagons or on the step ladders when shunting. The corporate defendant introduced this new procedure by calling all the drivers, informing them personally and then sending a memo with their pay packets. The memo read: "URGENT GENERAL ORDER

AS FROM FRIDAY THE 2nd JULY 2004 NO ENGINEMAN ARE TO RIDE ON THE TOP DECKS OF WAGONS OR RIDE ON SIDE STEPS OF ANY WAGON. THE ABOVE PRACTICIS ( SIC ) TO STOP. TRAINER DRIVERS WILL POLICE THE ABOVE POLICY". 54. Employees of the corporate defendant advise that riding on wagons is now no longer permitted, and they are now required to walk beside the train.

(c) Failure to undertake any or any adequate risk assessment of employees riding on the side step ladder of a wagon or riding on the top of a wagon whilst performing shunting work, or both.

55. In July 2001, the corporate defendant conducted a risk assessment for the purposes of obtaining its accreditation from ITSRR. The risk assessment identified the risk of falling from a train as "high". The defendant, however failed to implement corrective action by: (a) Eliminating the risk, or (b) Controlling the risk using the hierarchy of controls, and (c) Instructing and training its employees of this identified risk that may arise whilst performing shunting duties.

56. The employees who performed the shunting work were not on or before the charge date familiar with how to conduct a risk assessment using a risk matrix that required consideration of "How severely could [the hazard] hurt someone or how ill could it make someone?" and "How likely is it to be that bad?" in order to allocate a priority rating to the shunting hazard. The employees were not consulted by the corporate defendant for the purposes of the defendant undertaking a risk assessment in relation to the relevant shunting work. 57. After the incident, on 7 July 2004, Inspector Gill issued an Improvement Notice No 7-59469 ( attachment 8 )on the corporate defendant for contravening section 8 of the Act and clauses 9 to 11 of the Occupational Health & Safety Regulations 2001 ("the Regulations"). Specifically, the Notice required the corporate defendant to identify and assess the risks to persons associated with train shunting and propelling, eliminate any identified risk and if not possible, control the risk. The Notice required the corporate defendant to comply by 29 July 2004. 58. On or about 21 October 2004, close to 4 months after the incident and the issue of the Improvement Notice that required the corporate defendant to do a risk assessment, the corporate defendant had not done one. 59. On 9 November 2004, the corporate defendant did a risk assessment on shunting and riding on wagons.

60. The defendants have no prior WorkCover convictions under the Occupational Health & Safety Legislation. 61. All defendants cooperated with WorkCover. 8 The Agreed Statement of Facts in IRC2617 of 2006 (the Lachlan Valley matter) is substantially the same as in IRC2615 of 2006 (the Fisher matter) and in IRC2616 of 2006 (the Stapleton matter), the relevant differences reading: 42. In an interview subject to privilege and therefore pressed only against the corporate defendant, personal defendant Mr Stapleton said that he was aware in the 1990's that Pacific National did not allow its employees to ride on moving wagons when shunting. Mr Stapleton explained why the corporate defendant chose not to do the Pacific National method: "Time factor. If you ride on a wagon you get the shunt done quicker." 43. Personal defendant Mr Stapleton also said that the corporate defendant was given a film in about October 2003 showing one of their employees train surfing in the one spot when a train was travelling slowly through Hornsby. 44. In an interview subject to privilege and therefore pressed only against the corporate defendant, personal defendant Mr Fisher said he was aware that it was normal practice for the corporate defendant's employees to ride either on the moving wagons or on the side ladders when shunting trains. It was common industry practice. It's a practice that's been going on for years. 45. Personal defendant Mr Fisher also said that prior to the incident, in about February 2004, he caught one employee train surfing and challenged him over it and that employee has never done it again. Relevant Principles 9 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R (2005) 215 ALR 213. In that case their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s8(1) of the Occupational Health and Safety Act 2000 with ss21A, 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). 10 Their 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]). 11 Spigelman CJ in R v Thomson; R v Houlton (2000) 49 NSWLR 383, 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. 12 Proper regard is to be had to express legislative provisions and to the relevant statutory regime (Markarian at [27]). The object of the Act, to compel attention to occupational health and safety issues so that persons are not exposed to risks to their health, safety and welfare at the workplace, is a relevant consideration. Of particular relevance is the effect of s21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing and states, inter alia: . . . (2) Aggravating factors . . . (d) the offender has a record of previous convictions, … (g) the injury, emotional harm, loss or damage caused by the offence was substantial, . . . (3) Mitigating factors . . . (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, … (k) a plea of guilty by the offender (as provided by section 22) (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23) . . .

Consideration 13 In a consideration of penalty, the court must consider 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 Ltd v WorkCover Authority of New South Wales (Inspector 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" . . . 14 There are two sets of agreed facts before the Court. One set is tendered against the corporate defendant and the other against the individual defendants. The evidence is similar other than paragraphs 45, 46, 47 and 48. The evidence contained therein is not admissible and was not tendered against the individual defendants. Relevantly, it is stated at [45]: In an interview subject to privilege and therefore pressed only against the corporate defendant, personal defendant Mr Stapleton said that he was aware in the 1990's that Pacific National did not allow its employees to ride on moving wagons when shunting. Mr Stapleton explained why the corporate defendant chose not to do the Pacific National method: "Time factor. If you ride on a wagon you get the shunt done quicker."

15 This evidence, it was submitted on behalf of the individual defendants, places the corporate defendant in a different position to the individual defendants in terms of the assessment of objective seriousness of the offence as the corporate defendant was on notice there was a safer system of work for shunters but, for expeditious reasons, the corporate defendant did not adopt such a system. 16 The two individual defendants had a long work history with State Rail as train drivers. They then went to National Rail and then to Austrac. They were experienced train drivers who completed many of the practical training courses provided internally in each organisation. Further they had completed occupational health and safety courses. 17 In about 1999 the individual defendants were involved, with others, in establishing their own rail company, namely, the corporate defendant. Mr Fisher invested $40,000 and was appointed Manager of Maintenance and Road Training. He became a director in February 2001. Mr Stapleton began as Operations Manager in 1999 and became a director in January 2000. 18 In establishing Lachlan Valley RailFreight Pty Ltd, there was much work done by the two individual defendants, with their foundation colleagues, to ensure all rail regulations were adopted and safety management procedures put in place. An Operations Manual Risk Management Plan was prepared before the company began operating. It followed the risk assessment guidelines of State Rail. The safety regulations of the time were incorporated into the risk assessment procedures. The procedures were designed and adopted in 2000 and then reviewed in 2003. In the shunting operation, riding on wagons while shunting was an industry practice at the time and not banned by any regulator.

19 The Rail Freight company and two of its directors, Mr Fisher and Mr Stapleton, face charges that there was a failure to provide a safe system of work in a shunting operation at Port Botany Rail Yard. The particulars of each charge brought against each individual defendant are similar. It is asserted each failed to prevent employees riding on a moving wagon whilst undertaking shunting work. Further, it is pleaded each failed to provide adequate information, instruction and training on the existing prohibition of riding unsecured on the side stepladder of a wagon or riding on top of a wagon whilst performing shunting work. It is additionally asserted the defendants failed to undertake any adequate risk assessment of the task. While each defendant pleads guilty to the charges, the corporate defendant also pleads to a knowledge that some employers in the industry did not allow shunters to ride on freight wagons, unprotected. 20 Shunting work in the yard at Port Botany was being performed by two employees, Mr Green, and Mr Watcham, both train drivers. At the time of the incident, Mr Watcham was driving and Mr Green was acting as shunter. Radio contact existed between the two. The train drove past the railway crossing at Penhryn Road, Botany and Mr Green informed the driver that the last container flat had cleared the crossing. Mr Green's duties required he then alight from the train to turn off bells and lights at the signal crossing box. The train waited until another train passed to proceed up the line. After travelling some distance, Mr Watcham sought to contact Mr Green to determine that the train's rear had passed a set of track movement points. He could not contact Mr Green. He then tried on the two-way radio. He then tried to ring Mr Green on a mobile phone. When he received no response he alighted from his train and walked back along the tracks. Mr Green was lying across the tracks and deceased. 21 Another employee, Ms Jackson, had the task of closing the gate once a train has pulled out of the Patrick Terminal at the Penhryn Road crossing. She saw Mr Green after he switched off the road rail lights get back on to the last container. Evidence suggests Mr Green then moved onto the second last container flat. This flat had a skeleton frame down its middle but did not have side walls. 22 In an assessment of the objective seriousness of each offence, the court addresses the risk to safety in the system of work being adopted by the defendant corporation and the two individual defendants who were two of the controlling minds of the corporation.

23 Evidence revealed it was normal practice for employees to stand on the side of trains where there was a foot stand and a hand bar. It was also normal practice for employees to ride or walk on container flats. The evidence establishes that the employee as shunter or second person was given an unfettered discretion as to where they were located during the shunting operations. An employee could ride the train without any means of physical restraint on the end/rear steps or side steps of a wagon or could sit on the decking of the wagon with legs over the side or sit about six feet from the back of the wagon if it was a flat top wagon with a full deck. All the above procedures followed in a shunting operation at the time of the incident were unsafe. The precautions taken by employees, which were to ensure: there was a good hand and foot hold; that the driver did not come back too fast; a line of sight to where the train was heading and ensure the train was stopped before getting on or off. On examination, all of these precautions were inadequate and the shunter's work was inherently unsafe. 24 I accept it was recognised by all, including the directors of the company, the corporate entity and its employees that it was dangerous to walk along a container flat whilst a train was in motion. However, I also accept, from the evidence, that while this practice had been warned against, shunters did move along carriages at times when a train was in motion. 25 On the day of the incident Mr Green was at risk when riding unprotected on either the side or the back or both of a train wagon whilst it was in motion. He was at increased risk if he moved along the carriages whilst the train was in motion. 26 At issue between the parties was the actual circumstances which led to the death of Mr Green. Both parties invited the court to make an assessment, from a number of hypothesis, as to how Mr Green came to be in the position where he was struck by the wheels of a carriage. The defendants originally invited the court to determine from the range of possibilities how it was more likely than not the deceased fell. During the hearing, however, the defendants' position changed. It was submitted this is a matter which the court need not decide, for the purposes of sentencing, and could not decide in favor of the prosecution's submissions, beyond reasonable doubt, or in favor of the defendant on the balance of probabilities, given the competing theories in evidence. The various theories and the propositions of the parties were reduced to writing and tendered as exhibits as to the cause and circumstance which led to Mr Green's fall from the carriage of a moving train onto the train lines. 27 The defendants' initial submission proposed five hypotheses as to how the deceased was found, fatally injured, on the train line. There could be many other hypothesis, the defendants agreed. One of the hypotheses submitted was that the shunter deliberately placed himself in harm's way. This is an hypothesis without a skerrick of evidence to support it and I reject it. 28 The court is obliged to determine the offence and the objective seriousness of that offence in accordance with the charge that is pleaded. A causal connection to the risk must be established by the prosecution as an element of the general duty provisions. In WorkCover Authority of NSW (Inspector Ankucic) v McDonalds Australia Limited (1999) 95 IR 383, Walton J, Vice-President stated the test as follows (at 439-440): . . . the liability of the employer be established by an examination as to whether there is a causal nexus between the breach of statutory duty and the detriment occasioned to the employee and not, as appears to be at least implicit in the defendants' submission, by attention being given to the relationship between the conduct of the defendants and the actual accident or hazard . . . : see Drake v WorkCover Authority of NSW (1999) 90 IR 432 at 448 and 452; State Rail Authority of NSW v Dawson (1990) 37 IR 110 at 121; Haynes v CI & D Manufacturing Pty Limited (1995) 60 IR 149 at 157 and 159 and CSR Limited t/as CSR Wood Panels v WorkCover Authority of NSW (unreported, Bauer J, Matter No. CT1176 of 1994, 10 August 1995). 29 The charges for which the defendants are brought before the court and to which they plead guilty is "the offence" and that is what the court must address. Hungerford J in WorkCover Authority of New South Wales (Inspector Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316 re-iterated at [43]: . . . the penalty is fixed for the offence found to have been proven. It is, therefore, to the offence itself to which attention is to be directed and not . . . the occurrence of the accident and the contribution of other persons for what occurred. (emphasis added)

In Haynes v CI&D Manufacturing Pty Limited (1995) 60 IR 149, the Full Industrial Court in the context of a s15 and s16 prosecution stated (at 158): The general duties created by the OHS Act, such as in ss 15 and 16, are clearly directed, we think at obviating "risks" to safety at the workplace; it would therefore be wrong in considering whether an alleged breach of those general duties had been made out in any particular case to reason from the actual occurrence of an accident, even though causing death or injury, as the necessary detriment to safety and as to which a causal connection was to be shown. The accident itself may well, and probably does, manifest the existence of a detriment to safety and will, no doubt, be some measure of the degree of severity of the detriment; but, it seems to us, it is to the essential ingredients of the offence charged which one must attend by assessing the objective facts causing the detriment to safety and the causal connection therewith of the employer.

The incident and the contribution of other identities for what occurred can be used as factors to assist the court to determine the culpability of the defendants as charged. The court is, as was Hungerford J in Consolidated Constructions , assisted by the words of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 (at 257): Whilst . . . it was natural to concentrate on the events giving rise to the actual cause of the death, such a concentration exhibits an error in law as was pointed out by the Full Court in . . . C I & D Engineering . . . . The actual event of the accident and injury is relevant; but it goes to satisfy the evidentiary burden that (the) failure gave rise to a risk to health, safety or welfare. 30 The prosecutor submitted it is open to the court to find the only reasonable hypothesis as to the cause of the incident is: 1. that the deceased was on the second carriage container flat from the rear of the train, and

the deceased, appeared to have fallen from the second carriage container flat through the gap in the platform in front of the nearside rear wheels of the train which then ran over the deceased's abdomen. 31 I accept that after the investigation was carried out by the Independent Transport and Safety Reliability Regulator, it determined: There is circumstantial evidence that Mr Green fell between the deck and the train wheels and the second-last wagon...his injuries were consistent with being run over by the train. 32 Whether the deceased fell from the side of a container or from above, I find the evidence establishes there was an unsafe system in place for shunting work. This was reflected in a risk to the safety of any shunter, from falling from the train onto the tracks. I accept from the evidence there was a failure to prevent an employee who was performing shunting work from riding on a moving wagon; a failure to instruct, inform and train employees to prevent them from riding unsecured on the side or on top of a wagon; and a failure to undertake a risk assessment of the shunting task. These failures reflected in a risk of injury to the employees of the defendants including Mr Green who, on the relevant date, was performing shunting work. 33 Notwithstanding the invitation from both parties to adopt an hypothesis in relation to how Mr Green fell, I reject their propositions. I am however persuaded in the circumstances, as is stated in the agreed facts at [32]: Mr Green died from extensive injuries, consistent with being been run over directly across his abdomen region, by 6 wheels (three bogies) on the last two wagons (container flats) on the left hand rail in the direction of travel.

While performing work as a shunter, Mr Green fell from either the top or the side of a container while the train was in motion. For an employee to be in either position shows an unsafe system of work was in place. The risk to Mr Green's safety became a reality.

34 The words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 are apposite to the circumstances (at 5): The gravity and the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However the gravity or otherwise and the potential risks flowing from the breach and its foreseeability are clearly relevant.

And as Wright J, President said in WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited & Anor (No 2) (2000) 99 IR 163 at [22]: . . . The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5; WorkCover Authority (NSW) (Inspector Hannah) v Wonar Pty Ltd (at 9); Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456; Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131; Albury City Council (at 408-409); Lawrenson Diecasting Pty Ltd (at 476); WorkCover Authority (NSW) (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383.

The risk of injury in these circumstances became a reality. The incident demonstrably identifies the gravity of the risk in failing to prevent employees from riding on a moving wagon whilst undertaking shunting work. 35 The risk was readily foreseeable. While there were both handholds and footholds available for a shunter to hang on to when the train was in motion, the system did not require the shunter to be in the sight of the driver. The possible force from a train in motion during shunting work was not risk assessed. The hazards associated with this job were not properly identified nor recognised. 36 Further, I accept the submission that there were simple and straightforward steps able to be implemented to remedy these difficulties. Those steps had already been taken by another in the industry. This information was known by the corporate defendant.

37 While there were methods of control by way of radio signals and mobile telephone communication, a shunter in the position of Mr Green had the choice of riding in or on the last wagon or walking or driving beside the train. There was no direction given as to how such a discretion should be exercised. In particular there was no warning not to ride on the side of the last wagon. I accept that the practice in the industry allowing shunters to ride either on the back, or on the side ladder was not safe because "there was a chance of falling off, being run over, hit by other rolling stock, being hit by infrastructure". Employees themselves undertook some safety precautions such as having a good foot and hand hold, making sure the driver did not back up too fast and having a line of sight to where you were heading. However, the statutory obligation to ensure safe working does not fall upon the workforce - the employees. 38 Bearing in mind the defendants' knowledge that the shunting required the movement of the wagons and the failure of the defendants to provide clear direction as to how shunting work should be safely performed, there must be an element of foreseeability in the consideration as to each penalty. 39 In Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683, Kirby P (as he then was), with whom Campbell and James JJ agreed, said (at 700): The surrounding circumstances also suggested the offences charged were not uncharacteristic aberrations. The evidence indicates that, from 1986 until shortly after the offences charged, similar odours were emitted every second night and most weekends for long periods of time. Such circumstances are not inconsistent with the defendant's plea. As such they are properly to be considered by this Court. Indeed one may suppose, that in a case such as this, such a history of circumstances sufficiently corresponds to what was described in Veen v The Queen [No 2] (at 477) so that the offences to which the appellant pleaded guilty may not be viewed as 'uncharacteristic aberration[s]'.

I accept the evidence that the railway industry is "unforgiving" in relation to injuries. The practice of riding on side steps or on wagons whilst the train was in motion was, at the time of the offence, condoned by the defendants. Therefore, the offence was not an uncharacteristic aberration. 40 The defendants submitted in mitigation that the court take into consideration that riding on the wagons while the train was moving was industry practice at the time. In Abigroup Contractors Pty Ltd v WorkCover Authority of New South Wales (2004) 135 IR 317, the Full Bench considered such a submission at [93]: . . . in respect of the issue of industry practice, our understanding of the submissions of the appellant is that it seeks to have established as a principle that if there is a breach of the statute and it is found that the approach adopted by a defendant was consistent with industry practice at the time, that should, as a matter of general principle, be considered a mitigating factor in sentencing the defendant found to be in breach of the statute. We do not consider that any principle to that effect is correct and we have no intention in establishing it as a principle in this case. Any such general principle should be rejected and we do so.

The Full Bench in delivering its reasoning said particular regard must be had to the particular circumstances. The facts do not reveal that because there was such an industry practice, there should be mitgation. 41 The evidence of Mr Apps, Manager Safety, Policy Risk and Accreditation with Pacific National (ACT) Ltd, is relevant when considering the objective seriousness of the risk created when riding on a carriage during shunting. Mr Apps had reported to the Regulator the existence of this risk, and the Regulator at the time of the incident had not reacted. Mr Apps was of the view that the risk was obvious to all employees. It was clear there was: the chance of falling off, being run over, hit by other rolling stock, being hit by infrastructure. Also the risk of collision - if there was a collision- what would happen to the person riding the wagon?

I find the particular risk herein exposed was an identifiable risk, not only to a professional in the industry, but to a lay person. The risk was obvious. 42 As to the criminal responsibility of the personal defendants, Starke J in Millner v Raith (1942) 66 CLR 1 said about a provision similar to s8(1) and s26(1) (at 5): They make a director or person concerned in the management of a body corporate responsible as a principal for any act or fact specified in those sections merely because of his relation to the body corporate." 43 The Full Bench of the Commission in Morrison v Powercoal Pty Ltd and Anor (2004) 137 IR 253 said at [170]: It is quite apparent why the legislature included s 50 in the Act; without it those natural persons who direct a corporation's acts or omissions that are contrary to the requirements of the Act would avoid prosecution. The section recognises that it is not only directors who may be the guiding lights of corporations but also "persons concerned in the management".

And Haylen J in Inspector Ken Kumar v David Aylmer Ritchie 2006 NSWIRComm 323 (which has not been subject to any appeal) reasoned as to the role of directors of corporations at [170]: . . . it is well to remember that the Act imposes a strict or absolute liability on employers in relation to safety at the workplace. It is quite consistent with that approach that where a corporation is the employer that strict liability applies to those who are the operative minds of the corporation, namely the directors. There is nothing incongruous or unlikely about such an approach. The legislature has, however, provided a limited defence by allowing liability to be avoided if the director demonstrates that he or she was not in a position to influence the conduct of the corporation in relation to the contravention or, being in such a position, used all diligence to prevent the contravention by the corporation. Those defences focus upon the contravention and, in a sense, recognise that in the "real world" (so heavily relied upon by the defendant) there may be situations where, for a variety of reasons, a director was not able to influence the conduct of the corporation. . . To secure these objectives the legislature has adopted a system of strict or absolute liability of employers and has adopted provisions like s 26 to emphasise responsibility of persons in the corporate structure to ensure the safety of workplaces.

From the evidence, I accept the individual defendants were part of the controlling mind of the corporation and therefore, under statute, had a strict liability as the employer to ensure safe working. 44 The defendants expressed a sense of grievance that another director, who gave evidence for the prosecution, was not charged. It was revealed he was the financial controller of the corporation. While he was a director of a corporation he did not carry responsibility for the work procedures. His contribution was therefore de minimus. 45 In the circumstances, this was a serious offence and the responsibility for the breach is a burden worn by the named defendants. The pleas of guilty by the defendants reflect this. 46 I take into account the evidence of Mr Stapleton which revealed that the corporation was aware of a best practice method but dismissed it due to time pressures. This evidence which was not admissible against the individual directors. I am persuaded therefore that the individual defendants have a reduced culpability than that of the corporate defendant (see: Newcastle Wallsend Coal Company Pty Limited & Ors v Inspector McMartin [2006] NSWIRComm 339 at [620]) (referring to its decision in Morrison v Powercoal (No.3) (2005) 147 IR 117). 47 A level of deterrence must be factored into consideration as to penalty. These principles were cited by the Full Bench of the Commission in Court Session with approval in Capral Aluminium Limited v WorkCover Authority of NSW (Insp Mayo-Ramsay) (2000) 49 NSWLR 610 at [74] where it was said: . . . the. . . Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that 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. . . 48 It is therefore necessary to consider both specific and general deterrence. The defendant corporation submitted there is no reason for an element of specific deterrence in the fine imposed against it because it has sold off its contracts, is not trading and will cease to operate in the near future. It also submitted there exists no need for an element of general deterrence in the fine against the corporation and also against the individuals given the action taken by the Regulator and Rail Infrastructure Corporation which now prohibits riding on wagons in the shunting operation. However, I do not accept the latter submission. 49 I accept there should be no element of specific deterrence in the penalty against the corporate defendant. However, the individual defendants are still working in the industry within the company that has absorbed the freight contracts of the corporate defendant. Further, they still serve in senior positions within the industry. I therefore find the individual defendants, as they are still operating in the industry, must carry an element of specific deterrence to be reflected in the penalty. 50 As to general deterrence, once more it must be reiterated employers are responsible for occupational health and safety standards at their particular work site. Employers have obligations under the Occupational Health and Safety Act to ensure that all its work tasks are risk assessed and that its employees have properly defined goals and are properly trained and instructed in the safe performance of those tasks. The company still exists even if not performing rail freight work. The individual defendants still work in the rail freight industry as senior operators (although not as controlling minds of a corporation). An element of general deterrence is therefore applicable to the penalty imposed against each defendant.

51 The defendants are entitled to the benefit of subjective factors that tend to mitigate the objective seriousness of the offence. In Alcatel v WorkCover Authority (1996) 70 IR 99 (at 106), the Full Bench observed: We accept there are good policy reasons for the encouragement of early pleas of guilty and the giving of assistance to the WorkCover Authority in its investigation of suspected breaches of the OHS Act. 52 A plea of guilty may attract a greater degree of leniency. The court must be satisfied the plea reflects contrition on the part of the defendant. In R v Winchester (1992) 58 A Crim R 345 (at 350) per Hunt CJ at CL: A plea of guilty is always a matter which must be taken into account when imposing sentence. The degree of leniency to be afforded will depend upon many different factors. The plea may in some cases be an indication of contrition, or of some other quality or attribute, which is regarded as relevant for sentencing purposes independently of the mere fact that the prisoner has pleaded guilty...

These views are now given statutory weight in the Crimes (Sentencing Procedure) Act 1999. 53 I accept each defendant entered an early plea which expresses contrition for the breach. I accept the incident has had a significant effect on the individual defendants. They were personally close to Mr Green. Both have suffered a deterioration in their health reflecting their grief, concern and contrition. They have shut down their business venture. They have had to assume new work duties. 54 It is common ground that none of the defendants have any prior convictions. They present with a record of good industrial citizenship. In accordance with the principles of R v Thomson; R v Houlton, I accept there is a utilitarian value to each defendant's early plea. I allow in the circumstances a 25 per cent discount for the utilitarian value of each plea. 55 The prosecutor attacked the pre-existing safety management procedures of the company. The individual defendants invested their own time and monies to establish the business. They ensured there was in existence at the time of the incident a comprehensive risk management plan which included acknowledgement of operation standards, management and policy manuals. There was a risk register, which acknowledged the need for an awareness of a fall from a train. The likelihood of such a fall was rated as "high". However, the particular risk involved in the role of the shunter was not recognised or addressed. This is not a case where it can be said there was a complete disregard for the safety of employees and no safety features to a defined system of work. I am satisfied that the individual defendants were particularly highly skilled. They undertook workplace training courses, occupational health and safety courses and training officers courses. They sought the advice of Rail Corp and the National Rail to set up their own rail company with workmates. Before they began the company, they prepared all the appropriate paperwork. Mr Stapleton was the Operations Manager of the corporation. He was responsible for maintaining the records of the company. He ensured the risk assessment was conducted prior to the company commencing rail operations. They worked off the guidelines of risk assessment used by State Rail. There is evidence that the corporate defendant, through the activities of the individual defendants, viewed the new induction and staff training as a serious matter and conducted their induction and training activities with regard. 56 The regulator at the time, now the Independent Transport Safety and Reliability Regulator, approved the corporation's assessment document. The document was also approved by the Rail Infrastructure Corporation. There was a total of seven books which formed the Safety Management System. It was broken up into disparate categories such as corporate structure, procedures, human resources and maintenance. When the documents were prepared a risk assessment of shunting duties was carried out. The document was both prepared in 2000 and reviewed in 2003. In that period, riding on wagons whilst shunting was an acceptable industry practice. In Port Botany the maximum speed is eight kilometres per hour. The procedures make clear two practices were prohibited by the corporation, namely, loose shunting and walking on moving wagons. (Loose shunting involved a second person catching a wagon that was running on its own with no locomotive attached). Both individual defendants acknowledge that industry practice is no defence and accordingly a plea has been entered in relation to the breach. 57 Since the incident, a further risk assessment has been conducted for the shunting task. This risk assessment was accompanied by a WorkCover Improvement Notice. An external audit was conducted. The company reassessed its procedures. There was a Safety Critical document prepared, a control assessment and re-accreditation of all staff was conducted. Competency certificates were required. New shunting procedures for coupling and uncoupling wagons were introduced. There was introduced a revised comprehensive safety management system, supported by instruction and training. These practices have now been adopted by the new owners of the freight contracts. Now no second person is allowed to ride on a wagon when shunting. The shunter must either walk beside the wagon or drive.

58 The corporation is at present not operating. The managing director of Financial Management Corporation Pty Ltd, Mr J. Ivankovic, gave evidence. He identified himself as the accountant and tax agent for the defendant corporation and also for Macarthur Intermodal Shipping Terminal Pty Limited and Independent Railways of Australia Pty Ltd. Macarthur Intermodal had engaged the defendant corporation to provide rail freight services. In its dealings it became aware the defendant corporation was experiencing financial difficulties. Two of the directors of Macarthur Intermodal arranged to purchase a minority shareholding in the defendant corporation. By 2004, it became clear that further capital was required to keep the defendant corporation viable. In 2006, it was determined the business of the defendant corporation was not financially viable and a sale was effected in January 2007. Funds from the sale are being exchanged and are being used to reduce the liabilities of the defendant corporation. The buyers were made aware of this pending matter. 59 The defendant corporation raised with the court that it has only a limited means to pay a fine. Mr Ivankovic gave the following evidence: LVRF no longer employs any staff and will cease to carry on business in the next month or two. The only activities currently carried on by LVRF are the timely finilisation of the financial affairs of the company whilst the transfer of licences, accreditations and assets of LVRF to Independent Railways are effected.

LVRF will not carry on any business in the rail industry or otherwise after 30 March 2007. LVRF has limited capacity to pay a fine. The proceeds of the sale of assets will be consumed by the outstanding debts. 60 An application of s6 of the Fines Act 1996 was made by the corporate defendant. In the decision of Inspector Yeung v Donald Edwin Wilson t/as Wilson's Tree Service [2005] NSWIRComm 158, the Full Bench considered the application of s6 of the Fines Act and stated at [110] that a judge had: . . . a discretion in relation to penalty and it was proper he had regard to the evidence placed before him as to the financial situation of the respondent. However, the penalty fixed must ultimately reflect the objective seriousness of the offence and must not be inconsistent with the criminality of the offence.

The defendant corporation submits the approach to be adopted by the court is to impose a penalty that reflects the objective seriousness of the offence but should also take into consideration the financial status of the company. It is submitted a fine which is less than that which would have otherwise been imposed is appropriate.

61 The individual defendants also bring an application under s10 of the Crimes (Sentencing Procedure) Act 1999 such that the court would find an offence proved but a conviction is not recorded. The criteria to be considered in such a deliberation under s10 requires an examination of: · The antecedents · Age · Extenuating circumstances under which the offence was committed · Any other matter which the court thinks it proper to consider. Both individual defendants have no previous antecedents and no industrial or criminal record. Neither does the defendant corporation. 62 As to the individual defendants, I accept both provided assistance to the family of the deceased. As to Mr Stapleton's financial status, I accept he is a man of limited means. He had an income of approximately $30,000 whilst working for the defendant corporation although in 2005 it went up to $68,000. I accept he invested in the corporate defendant but has now no income from it. In his current employment with Independent Railways, he earns approximately $1,500 per week. I accept he has a mortgage of $400,000 and property valued at $500,000. His wife works. He owns a motor vehicle and has a superannuation fund. 63 Mr Fisher has a similar background to Mr Stapleton. He also worked in the industry for many years. He undertook various courses related to occupational health and safety and other training courses for work on the railways. He was one of the founding members, with Mr Stapleton, of the company and invested some $40,000 in its start-up. He expressed grave concerns about the death of Mr Green. His taxable income again was in the same vicinity as that of Mr Stapleton's, going up to $68,000 in the 2005 financial year. He acknowledged the receipt of some director's fees throughout the years. He is currently employed as Crewing and Equipment Manager at Independent Railways of Australia. He now earns $1,550 per week. He has a house valued at approximately $600,000 on which he owes $200,000 in mortgage. He has a third share of a block of land and has money in a superannuation fund.

64 Regard must be had to the different circumstances of the co-offenders in question and their different degrees of criminality (Inspector Green v Big River Timbers Pty Limited; Inspector Green v Big River Timbers (Veneer) Pty Limited [2006] NSWIRComm 279 at [14]-[17]). In this instance it is recognised that the culpability of the personal or individual defendants in this particular circumstance is less than that of the defendant corporation. Nonetheless, the individual defendants, each had a "significant and hands-on role" in the corporate operations and must be held culpable. I find there is no feature which distinguishes as to the liability of each of the individual defendants that would require a penalty different, one from the other. 65 They are, however, persons with unblemished records. They are persons of good character, conscientious and committed to issues relating to workplace safety. As directors, Messrs Fisher and Stapleton, post the incident, took significant action to avoid any further unsafe work practices. I accept this incident placed a considerable burden upon them both. They consent to entering a bond if appropriate. It is submitted a bond would be a significant penalty but would allow each defendant to keep his good name.

66 In view of the seriousness of the offence, I cannot accept this is an appropriate matter for the application of s6 of the Fines Act or s10 of the Crimes (Sentencing Procedure) Act. I find a fine must be imposed on the defendant corporation and each of the individual defendants. 67 I note the maximum penalty for the charge brought against the defendant corporation is $550,000. While the defendant corporation continues to be in existence it must be given a fine which reflects the objective seriousness of the offence but accounts for its limited financial status. Accordingly, the defendant corporation is fined in the sum of $60,000.00. 68 I accept the individual defendants are paid employees with significant mortgage debt and little by the way of assets outside a family home. I accept any significant penalty imposed will be difficult for them to meet. However, I must weigh these factors with the seriousness of the offence which must be reflected in the penalty imposed. I note the maximum penalty for the individual defendants is $55,000.00. 69 Taking into account the subjective features of the offence but giving weight to the objective seriousness of the offence, I find each of the defendants guilty. 70 The first defendant, Mr Fisher, a director of the defendant corporation, is fined in the sum of $10,000. 71 The second defendant, Mr Stapleton, a director of the defendant corporation, is fined in the sum of $10,000. 72 The third defendant, Lachlan Valley RailFreight Pty Ltd, the defendant corporation, is fined in the sum of $60,000. 73 The defendants shall pay the prosecutor's costs as agreed or assessed with leave to approach.

Orders 74 Accordingly, the Court makes the following orders: 1. In Matter No IRC2615 of 2006, I find the defendant guilty of the offence as charged.

2. The defendant is fined in the sum of $10,000.00 with a moiety to WorkCover Authority of New South Wales.

In Matter No IRC2616 of 2006, I find the defendant guilty of the offence as charged.

The defendant is fined in the sum of $10,000.00 with a moiety to WorkCover Authority of New South Wales.

In Matter No IRC2617 of 2006, I find the defendant guilty of the offence as charged.

The defendant is fined in the sum of $60,000.00 with a moiety to WorkCover Authority of New South Wales.

There shall be only one order as to costs. As there has been no agreement between the parties as to the quantification of the costs, I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list 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.