(g) the offender is unlikely to re-offend,
(h) the offender has good prospects of rehabilitation …,
(i) the offender has shown remorse …,
(k) a plea of guilty by the offender …,
…
(m) assistance by the offender to law enforcement authorities …
78 In acknowledging that the maximum fine in respect of the corporate defendant was $550,000, Mr Stanton submitted that I should allow a discount of 25 percent for the plea of guilty, a further 10 percent for subjective matters and a further five percent for the positive steps taken in respect of rehabilitation.
79 In respect of the personal defendant, Mr Stanton made an application for the exercise of the discretion to not record a conviction in accordance with the provisions of s 10 of the Crimes (Sentencing Procedure) Act, submitting that a s 10 could be granted on a conditional basis. In respect of this application, counsel relied upon WorkCover Authority of New South Wales (Inspector Mansell) v Daly Smith Corporation (Aust) Pty Limited and Thomas Edwin Curtis Smith [2005] NSWIRComm 101 at [62]; WorkCover Authority of New South Wales (Inspector Dall) v Litchfield Roofing Pty Ltd; Joseph Andrew Litchfield; Jane T Michilis Pty Ltd (formerly known as Michilis Pty Ltd) (ACN: 073 407 397) [2003] NSWIRComm 240 at [81] - [87] and WorkCover Authority of NSW (Inspector McColl) v Dowdon Contracting Pty Ltd & Ors [2003] NSWIRComm 477 at [36] - [55].
Consideration
80 The primary consideration in sentencing is the gravity of the offence viewed objectively: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474; Fletcher Construction Australia Limited v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 77 - 81. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalties set by the legislature from zero to the maximum: WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited and Anor (No 2) (2000) 99 IR 163. The maximum penalty in this case is $550,000.
81 Matters that are relevant to the consideration of the objective seriousness of the offence are the nature and quality of the offence and whether it involved obvious or foreseeable risks; whether there were simple and straightforward steps available to remedy any failures on the part of the defendant, and the practical and potential consequences flowing from the commission of the offence including whether injuries sustained by an employee or person manifested the degree of seriousness of the relevant detriment to safety. The Court is also required, in fixing any penalty, to consider the need for both general and specific deterrence: Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; 99 IR 29 at [71]-[80].
82 A secondary consideration is the subjective features of the offence, that is, the facts concerning the offender. This will assist the Court in determining whether any penalty justified by the objective circumstances of the offence should be modified. The penalty to be imposed must generally be such as to compel attention to occupational health and safety generally so as to ensure that workers whilst at work will not be exposed to risks to their health and safety: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388; Capral Aluminium; Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61.
83 In considering the nature and quality of this offence, the Full Bench of the Industrial Relations Commission in Court Session in Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 at 339 stated:
... The penalty must reflect the nature and quality of the particular offence; the level of penalty must, on the one hand, compel attention to occupational health and safety risks in order to ensure that persons are not exposed to such risks at their workplaces but, on the other, must not be oppressively high.
84 The charge and the particulars of the charge establish the parameters in which the objective seriousness of the offence should be considered by the Court: Morrison v Powercoal (No 3) at [76].
85 The particulars of the charge allege the defendants failed to adequately assess and manage risks associated with using augers to auger grain from silos at the farm; failed to provide and maintain a safe system of work for its employees who were required to operate augers at the farm; failed to provide such information, instruction and training in relation to the operation of augers and in relation to augering grain at the farm and failed to provide adequate supervision for its employees who were required to operate augers at the farm.
86 These are the particulars to which the defendants have pleaded guilty and while they represent a comprehensive failure in providing a safe system of work whilst operating augers, the reference to the accident involving Mr Vial is evidence of the seriousness of the risk and the seriousness of the injuries that might be suffered because of these numerous failures.
87 There are four significant matters which require consideration and determination in deciding the appropriate penalty for these offences for each of the defendants. The first issue is the degree of culpability for the breaches of occupational health and safety that can properly be attributed to the acts or omissions of the corporate defendant. It is necessary to deal with this issue in order to decide the gravity of the offences to which the corporate defendant has pleaded guilty.
88 The second issue is linked to the first and involves an assessment of the degree of culpability that can be attributed to the second or personal defendant, Mr Falkiner, arising out of relevant acts or omissions both on his own part and on the part of the company, at least to the extent to which the company's acts or omissions can be properly attributed to him.
89 I consider that, notwithstanding the deeming nature of s 26(1) of the OH&S Act in relation to a person such as the personal defendant, it does not follow from the fact that an individual is, in circumstances such as those here present, deemed to be guilty of the offences resulting from the guilt of the corporate defendant, that is, the degree of culpability is to be assessed necessarily at the same level as the culpability of the corporation.
90 The third and fourth issues are also related. They involve determination of relevant factual questions, or questions of fact and degree, relating to the subjective circumstances of the respective defendants and how any conclusion in that regard should be factored into the final assessment of the relevant penalty or penalties.
91 In dealing with the first of these questions, the failure here is essentially a failure to provide a system of work with appropriate instruction and supervision.
92 As Haylen J observed in Inspector Chris Chadwick v BH Maclachlan (NSW) Pty Ltd at [36]:
It is undoubtedly true that working in remote areas of the Australian outback presents different issues for systems of occupational health and safety to those which might be found in a city factory or workplace. By its very nature, the work is likely to be undertaken at a considerable distance from available emergency services and often the work will be undertaken alone, although systems for remaining in contact with a homestead or a fellow worker are able to be used …
93 In this particular case, the corporate defendant had a documented system of safety and provided safety courses for its employees. The evidence in this case, which I accept, was that Mr Vial was given instructions, on 30 May 2002, in operating augers and moving procedures by Mr Maclean, an experienced employee and stud manager. This included a verbal risk assessment in respect of the auger and accessing silos through the side access chutes. Although a safety course was provided to all jackeroos on 8 and 9 May 2002, Mr Vial did not attend this course as he had undertaken a farm safety course at Tocal Agricultural College.
94 The offence here goes to the instruction, training and supervision of young persons working as jackeroos and performing tasks which had well known dangers. Such instruction and training should have included a specific direction not to access grain via the doors of a grain silo, particularly in circumstances where each silo had a minimum of four access chutes. Furthermore, warning and danger signs should have been placed on the doors of the silo and ideally the doors fitted with a padlock to preclude access.
95 I accept, on the evidence, that there was a motor bike within close proximity of silo 1, that should have been utilised, in accordance with the training given to Mr Vial to report that the grey auger had broken down and to seek assistance prior to proceeding with the operation. It is of course relevant to factor into the consideration of the relevant gravity of seriousness of the matter the fact that what happened in this case was contrary to the express instructions of the corporate defendant, given through the personal defendant. However, it must also be acknowledged that what those matters do not take into account is that many employees in rural industries learn their skills on the job and the practical exigencies that where a piece of equipment breaks down and a similar piece of equipment is available to carry out the task, the employee may proceed to ignore the direction to communicate to a supervisor the failure of the equipment and seek further instructions.
96 It is the lack of supervision in this regard that no doubt contributed to the accident. The corporate defendant has now included in its instructions in respect of the use of augers that self-propelled augers are to be moved by two people at all times, one person to drive, the other to assist in safe placement of the auger. The significance of the failures are to be seen in the perspective of the steps that have been taken since the accident which are referred to in the evidence of Mr Falkiner.
97 Seen in that context, it is to be considered that there was a major and significant breach of safety and that the gravity of the offence was correspondingly significant.
98 Having reached those conclusions in relation to the culpability of the corporate defendant, it is necessary to consider that of the personal defendant. In my view, a level of culpability of a personal defendant who is deemed to have committed the offence by virtue of s 26(1) of the OH&S Act cannot be greater than that of the corporation who has been convicted or otherwise assumed to be guilty for the purpose of the operation of the section.
99 However, most pertinently for the present proceedings, it must be recognised that the culpability of the personal or individual defendant may be less than that of the corporate defendant. It is not, in my view, a question of considering the relative contribution but assuming that the purpose of the provision is to make an individual who is responsible to an extent for the management of the corporation similarly responsible and culpable for the acts or omissions of the corporation, although the relevant issue is not whether, but to what extent, there is a level of contribution as between the corporate and individual defendants for the particular breach of safety which arose under the OH&S Act. It is, nevertheless, necessary to accept the likelihood that the level of gravity of the offence attributable to the personal defendant may be less than that which has been found to have been committed by the corporate defendant.
100 In assessing the culpability of the personal defendant, it is, in my view, important to place particular weight upon the role of the personal defendant in the management of the corporation and the nature of the gravity of the offence as identified in relation to the corporate defendant, and to make an assessment which should, generally speaking, be resolved in favour of the personal defendant: Camilleri's Stockfeeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 at 698 - 699. Although the personal defendant was an important and crucial part of the management of the corporate defendant, nevertheless, he was a manager in the context of a small company which itself managed and ran a large mixed farming property.
101 The personal defendant was assisted in his role by highly experienced managers who had many years experience in the pastoral industry. It is therefore appropriate, to proceed on the basis that although the personal defendant had a significant role in the decision making as to the employment and running the corporate defendant, it could not be assumed that he could make all crucial decisions, or changes to practices. It may therefore be assumed, and thus found for the purposes of these proceedings, that the system now in place, as referred to in the personal defendant's evidence includes matters that had not come to the attention of the personal defendant despite his experience or the attention of the Farmers' Federation, its various branches and the New South Wales WorkCover Authority, particularly in respect of a crushing accident involving an auger. Such an accident would be most unlikely to occur in placing an auger into the silo chutes. Accordingly, I consider that there is a significant qualitative difference between the culpability attaching to the corporate and personal defendants, although I find that the gravity of all of the offences is serious.
102 The evidence establishes that at the time of the accident, the corporate defendant had developed a system for the assessment and management of risks, however the system was deficient.
103 I accept that the existence of the system evinces the defendants' concern in regard for safety and militates the seriousness of the offence. The defendants had a system in place, however, as evidenced by their pleas of guilty, there was a deficiency in the system. The failure or omission on the defendants' part, in my view, was not in the nature of the deliberate or intentional disregard for safety.
104 Evidence of procedures and instructions for employees and contractors to follow, may mitigate against the seriousness of the offence under the OH&S Act. In WorkCover Authority of NSW (Inspector Penfold) v Fernz Construction Materials Ltd [No 2] (2000) 100 IR 23 at [34], Walton J Vice-President observed:
On the other hand, the seriousness of the offence must be assessed in light of the policies and procedures which the defendant had in place. The existence of settled safety procedures and instructions is a factor which may mitigate the seriousness of an offence under the Act: see Warman International Ltd v WorkCover Authority (NSW) (1998) 80 IR 326 at 342; WorkCover Authority NSW (Insp. Riley) v Broken Hill Proprietary Co Ltd (1998) 83 IR 427 at 429 and Department of Mineral Resources (Insp. McKensey) v Kembla Coal (at 25).
105 The issue discussed by the Vice-President was confirmed as being an appropriate consideration to take into account by the Full Bench in Morrison v Powercoal (No 3) at [83]. I accept that the defendants had implemented, prior to the accident, an array of measures which were designed to protect its employees from injury whilst using augers.
106 The occurrence of the accident in this case indicates the procedures were not sufficiently comprehensive or sufficiently communicated to and understood by the employees to ensure their safety. The existence of the system on paper alone is clearly not sufficient to comply with the obligations imposed by the OH&S Act. The employer is required to ensure that its "paper systems" are implemented and maintained in its daily operations: Sydney County Council v Coulson (1987) 21 IR 477 at 480; WorkCover Authority of New South Wales (Inspector Tyler) v Abigroup Contractors Pty Ltd (2000) 99 IR 196 at 214.
107 As Walton J Vice-President observed in WorkCover Authority of New South Wales (Inspector Barbosa) v Newstart 150 Pty Ltd (t/as Stylewise Interiors) (2002) 113 IR 78 at [87]:
[87] …the presence of young and inexperienced persons in the workforce gives rise to an increased responsibility on the part of an employer to ensure adequate training is provided, particularly as to matters concerning the occupational health and safety of those persons.
108 In respect of causation, the proper approach to the distinction between the ultimate event and the underlying risks has been the subject of comment in a number of cases. In Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8, Walton J stated at 27 - 28:
The standard of foreseeability is objective, but it is not necessary that the precise causal circumstances of exposure to the risk and the consequent accident were reasonably foreseeable: Shannon v Comalco Aluminium Limited (1986) 19 IR 358 at 364; The University of Sydney .
In Inspector Hannah v Rice Growers Co-Operative Limited (unreported, CT90/88, 20 November 1990), Fisher P commented, in relation to an offence under s 15 of the Act, that (at p7-8):
"It was true that it may be difficult to anticipate the way in which even an obvious and avoidable risk may work itself out. Most serious accidents are not anticipated. This does not excuse any employer from a failure to employ a safe system of work incorporating obvious and desirable safety measures."
109 This passage is applicable in this case. Whilst the accident resulted from a combination of events, the breakdown of the grey auger, the opening of doors to the silo to auger grain with a larger auger, and the absence of safety buttons on the auger, the occurrence of an accident of this type was, in my view, reasonably foreseeable. The prospect of an employee opening the doors to the silo was foreseeable. It was against this very danger that a procedure was introduced that requires two persons to move an auger and a safety button installed on augers.
110 A further factor that should be taken into account in assessing the objective seriousness of the offence is whether death or serious injury occurred. The seriousness of an injury or a death does not dictate the size of any penalty but it does demonstrate the seriousness of the detriment to safety occasioned by the offence: Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, Glynn and Cullen JJ, CT90/1214, 30 June 1992) at 9; Lawrenson Diecasting; Tyler v Sydney Electricity (1993) 47 IR 1 at 5.
111 In Morrison v Powercoal Pty Ltd (2003) 130 IR 364, the Full Bench Wright J President, Walton J Vice-President, Boland J stated at [33]:
[33] Thus, it may be the case that an employer prosecuted under s 15 of the Act was aware of a serious risk to the health and safety of its employees but took no action to eliminate the risk, notwithstanding that simple and straightforward remedial steps were available. The gravity of such an offence, despite the fact no one was injured and having regard to relevant subjective factors, might be assessed at the high end of the range of penalty available to be imposed on the offender. On the other hand, another employer may have had a good safety record, a safe system of work in place, provided a high level of training, instruction and supervision but through a combination of inadvertence on the part of an employee and a momentary lapse in supervision, a fatality occurs. The assessment of the objective seriousness of the offence could conceivably be at a level lower than that applied to the first employer and, having regard also to subjective considerations, might attract a lower penalty. Importantly, however, in the latter example, the occurrence of death may indicate that the risk to which the deceased employee was exposed, despite the employer's demonstrable commitment to providing a safe workplace, represented a serious detriment to safety deserving of a higher penalty than otherwise might be the case.
112 This is a matter, which in my view, could properly fall within the second example referred to by the Full Bench in the above decision. The corporate defendant had an impeccable safety record stretching back to 1916 and in my view could be regarded as a leader in the pastoral industry in respect of occupational health and safety. However, through a combination of inadvertence and inexperience, a fatality occurred.
113 It is now necessary to deal with the subjective circumstances of each of the defendants. A great deal of material has been placed before the Court relevant to these issues insofar as they concern each defendant. I accept that the defendants have a strong commitment to occupational health and safety and give such matters priority in the conduct of the operation of the property.
114 Section 21A(3) of the Crimes (Sentencing Procedure) Act provides some mitigating factors to be taken into account in determining the appropriate sentence. Relevant for the proceedings are the following sub paragraphs:
(e) the offender does not have any record (or significant record) of previous convictions,
(f) The offender was a person of good character,
(g) the offender is unlikely to re-offend,
(h) the offender has good prospects of rehabilitation,
(i) the offender has shown remorse for the offence by making reparation for any injury, loss or damage or in any other manner,
…
(k) a plea of guilty by the offender (as provided by section 22),
…
(m) assistance by the offender to law enforcement authorities (as provided by section 23).
115 The corporate defendant has been in operation for over 90 years and has no prior convictions. I therefore find that the corporate defendant has a very good industrial citizenship which is an important matter to be taken into account on sentence: Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of New South Wales (Inspector Wilson) [2000] NSWIRComm 46, where the Full Bench, Wright J President, Walton J Vice-President and Hungerford J said at [16] - [17]:
[16] ... Perhaps more significantly, there are quite significant subjective features in this matter which appear to have not been taken into account or sufficiently taken into account.
[17] We do not consider that the history of good industrial citizenship of the appellant, having regard to its prior record and the long period of operation of its business, was sufficiently taken into account. We also refer to the careful and compassionate steps taken by the appellant as to the welfare, rehabilitation and continuing employment of the injured worker. The reason we have made specific reference to that latter matter is that it does not seem to have been often referred to in other judgments in this area.
116 In addition, the Court has before it a number of testimonials from persons of prominent standing in the community. Sir Laurence Street AC, KCMG, QC commented of the personal defendant's "commitment to looking after the safety, security and general morale of his staff and I can well understand how utterly distressed he is that one of his jackeroos suffered a fatal injury". Mr NRF Wilson has been the Mayor of Warren for the past 18 years. Mr Wilson referred to the personal defendant and his wife as Ambassadors for regional and rural Australia.
117 In Inspector Olive v Transfield Pty Ltd [2001] NSWIRComm 295 at [23], Kavanagh J observed at [23]:
[23] I find the court can give some positive consideration to the corporate reputation and personal reputation relied upon and find it has some probative force sufficient in my consideration to allow a measure of mitigation of penalty.
118 The corporate defendant has demonstrated a laudable attitude to issues of safety. This includes being one of the first rural properties to introduce a comprehensive occupational health and safety policy; engage the National Safety Council of Australia Ltd to undertake a major risk identification survey shortly after the accident; taking steps to bring to the attention of property owners in the Warren district of New South Wales the importance of occupational health and safety and appointing an additional safety officer to work with the corporate defendant in an ongoing audit role to ensure the corporate defendant continues to improve and develop its occupational health and safety systems and procedures.
119 The defendants are entitled to credit for the swift actions aimed at ensuring that an accident similar in nature did not occur in the future. Silo 1 was decommissioned shortly after the accident. In Tyler v Sydney Electricity, Hill J said at 5:
The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from breach and its foreseeability are clearly relevant as are the measures of gravity of the breach itself and the measure of culpability. These considerations are, of course, not exhaustive and, amongst other things, the record of the defendant and its conduct in relation to the taking of safety precautions both prior and subsequent to the breach are also very relevant.
120 The defendants further refined their existing occupational health and safety policy in respect of the use of augers. This included the installation of a safety button on those augers which did not have one.
121 The circumstances of this matter present a most difficult task for the Court in balancing all the relevant considerations. A most useful insight into the relevant considerations however derives from a passage in the judgment of the New Zealand Court of Appeal in R v Radich [1954] NZLR 86 at 87 which was cited with the approval of the Court of Criminal Appeal (Street CJ, Lee and Slattery JJ) in R v Rushby [1975] 1 NSWLR 594 at 598, as follows:
"… If a court is weakly merciful, and does not impose a sentence commensurate with the seriousness of the crime, it fails in its duty to see that the sentences are such as to operate as a powerful factor to prevent the commission of such offences. On the other hand, justice and humanity both require that the previous character and conduct, and probable future life and conduct of the individual offender, and the effect of the sentence on these, should also be given the most careful consideration, although this factor is necessarily subsidiary to the main consideration that determine that appropriate amount of punishment."
122 Those judgments have been referred to with approval in previous judgments of this Court. See, for example, WorkCover Authority of New South Wales (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 335; Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209; Inspector Lancaster v Wollongong City Council [2005] NSWIRComm 79; Inspector Ankucic v William George Young [2004] NSWIRComm 186.
123 I have formed the view that the offence is a sufficiently serious one to bring it between the low to mid range of the scale of culpability. I make clear that the objective seriousness of the offence is moderated by the fact that the defendants did have in place an elaborate set of systems designed to ensure the safety of its employees in their application to this case. However, the systems were not sufficiently clear and detailed, particularly in respect of the use of augers. The procedures which were in place were also not supported by a secondary layer of safety which has now been introduced, that includes self-propelled augers are to be moved by two people at all times. These failings exposed the corporate defendant's employees to risk of serious injury.
124 I approach the assessment of the appropriate penalty in these matters accordingly. In my view, the relevant principles lead immediately to a conclusion that although questions of general deterrence are pertinent here, considerations of individual deterrence should not be accorded great weight in the very particular circumstances of both defendants.
125 Here it is appropriate to act on a basis that the personal defendant is a person of the highest character, both in the rural community and generally, with a long and positive record in the pastoral industry which has endured for a long period of time without coming under adverse notice with the relevant authorities. This is particularly significant in the industry in which the defendants operate. Such matters are entitled to great weight and they are to be taken into account in favour of the corporate defendant to a similar extent.
126 Similarly, there is evidence of contrition and remorse. Co-operation has been provided by the defendants to WorkCover and pleas of guilty were entered at the earliest opportunity. Although a finding of guilt would have been most likely, significant weight has to be given to the public interest considerations of the fact of the early pleas. In making the above observations, I am mindful of the Full Bench's observations regarding specific deterrence in Capral Aluminium. The Full Bench observed at [77] that in view of the scope of the obligations by employers under the OH&S Act in most cases, it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future.
127 General deterrence must be taken into account because, as identified by Hungerford J in Fisher v Samaras Industries Pty Ltd at 388, and approved by the Full Bench in Morrison v Powercoal (No 3) at [14], the offence is against the statute of public interest and public concern and it is important to compel attention to occupational health and safety issues. It is appropriate that I include independently an element for general deterrence.
128 In respect of specific deterrence, the Full Bench in Capral Aluminium stated at [77]:
[77] In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The Court may form such a view as a result of the rehabilitation of the offender: R v Corner (unreported, CCA, 19 December 1997) or because the offender will not have the opportunity to commit a similar offence in the future: R v Macdonell (unreported, CCA, 8 December 1995).
129 In this matter, the defendants have undertaken an extensive and comprehensive review of their occupational health and safety policies. This review has resulted in the decommissioning of silo 1, the fitting of safety buttons to augers and an extensive review of occupational health and safety matters at the property.
130 I am satisfied that the risk of re-offending is extremely low as a result of the extensive and comprehensive measures taken by the defendants, together with a demonstrated commitment to safety. I therefore determine a very small element of the penalty should reflect specific deterrence.
131 The High Court recently considered the sentencing method that should be applied by courts in Markarian v R (2005) 215 ALR 213, [2005] HCA 25. The Court, (Gleeson CJ, Gummow, Hayne and Cullinan JJ in a joint judgment; McHugh and Kirby JJ in separate judgments) allowed an appeal, set aside the sentence and orders of the New South Wales Court of Criminal Appeal and remitted the matter to that Court to dispose of the appeal in accordance with the reasons for judgment. In the joint judgment at [26] - [27], their Honours said: