Inspector Wilkie v Batequip Pty Limited

PROSECUTOR Mr G Phillips Carroll & O'Dea Solicitors

LEGAL REPRESENTATIVES: DEFENDANT Mr R S Warren of counsel Solicitor: Mr D Groundwater Warren McKeon Dickson

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

INSPECTOR ROBERT WILKIE v BATEQUIP PTY LIMITED (FORMERLY BATEMAN EQUIPMENT PTY LIMITED) TRADING AS DITCH WITCH AUSTRALIA

Prosecution under s 18(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2003] NSWIRComm 111 1 On 17 May 2001 Barry Butterfield, a labourer employed by Integral Energy, together with Alan Morgan, were operating a wood chipping machine known as a "Morbark Model 10" at Bargo in New South Wales. The machine had been sold to Integral Energy by the defendant, Batequip Pty Limited. Both men were feeding branches and leaves into the machine when the glove on Mr Butterfield's right hand became caught on a branch that was being fed into the machine, dragging Butterfield's right hand, arm and body onto the rotating feed rollers. Butterfield suffered significant cuts to his arm and head. He required 80 stitches in his arm and 38 stitches in his head as a result of the injuries he received.

2 Arising out of what occurred on 17 May 2001 the defendant was prosecuted by Inspector Robert Wilkie of the WorkCover Authority of New South Wales under s 18(1) of the Occupational Health and Safety Act 1983. Section 18 provides: 18. Designers, manufacturers and suppliers to ensure health and safety as regards plant and substances for use at work (1) A person who designs, manufactures or supplies any plant or substance for use by persons at work must: (a) ensure that the plant or substance is safe and without risks to health when properly used, and (b) provide, or arrange for the provision of, adequate information about the plant or substance to the persons to whom it is supplied to ensure its safe use. (2) The obligations under this section: (a) apply only if the plant or substance is designed, manufactured or supplied in the course of a trade, business or other undertaking (whether for profit or not), and (b) apply whether or not the plant or substance is exclusively designed, manufactured or supplied for use by persons at work, and (c) extend to the design, manufacture or supply of components for, or accessories to, any plant for use by persons at work, and (d) extend to the supply of the plant or substance by way of sale, transfer, lease or hire and whether as principal or agent, and (e) extend to the supply of the plant or substance to a person for the purpose of supply to others, and (f) do not apply to a person merely because the person supplies the plant or substance in the course of a business of financing the acquisition of the plant or substance by a customer from another person. (3) In this section, "manufacture" plant includes assemble, install or erect plant.

3 It was relevantly alleged in the application for order that: The Defendant … being a supplier of plant for use by persons at work, to wit a Model 10 Morbark woodchipper ("the machine") Serial number 4S8SZVW021391 supplied the machine on or about 10 September 1998 to Integral Energy for use by employees of Integral Energy at work, and DID FAIL, on or about 10 September 1998 contrary to Section 18(1) of the Occupational Health and Safety Act 1983 (NSW) To ensure that the machine was safe and without risk to health when properly used and further the Defendant failed to provide or arrange for the provision of adequate information about the machine to the persons to whom it was supplied, namely Integral Energy Australia ("Integral Energy"), to ensure its safe use. The act or omission alleged to constitute the offence, namely the supply of the machine contrary to Section 18 of the 1983 Act, first became apparent to the Informant and the WorkCover Authority on 18 May 2001 after an employee of Integral Energy, Mr Barry Butterfield had been injured whilst using the said machine on 17 May 2001 and proceedings are commenced in accordance with Section 49(2)(b) of the Act. …

4 The defendant pleaded guilty to the charge laid against it. The evidence in the proceedings consisted of:

· An agreed statement of facts which had attached to it a letter from the defendant's solicitors to the solicitors for the prosecution to the effect that the defendant proposed to recall all wood chipping machines it had supplied in Australia and modify them in accordance with a report prepared by Simpson Associates Forensic Engineering. A copy of the Simpson Report was also attached together with a bundle of 16 colour photographs showing the wood chipping machine and the modifications made to it after the accident;

· An affidavit of Stewart Brown, managing director of the defendant. Attached to Mr Brown's affidavit was a report by R K Findlay, consulting engineers, in respect of a risk management assessment of the Morbark machine.

· The defendant commenced trading in 1997 throughout Australia and has 30 employees; · The defendant has no prior convictions; · The defendant expresses contrition; · The defendant has sold 21 wood chipping machines. On delivery operators of the machine are shown how to operate the machine and are provided with some training as to its operation and safety features, a "Safety, Operators and Parts Manual" and a video showing the functions of the machine and recommended use of the machine; · When the wood chipping machine was sold to Integral Energy operators were shown how to use the machine and its safety features. A representative of Integral Energy was told that the machine was a two-person operation. Integral Energy were provided with the Manual and video; · The defendant volunteered to assist WorkCover with an evaluation of the safety of wood chipping machines in 1998 and in May 1998 provided a model 10 Morbark wood chipper for that purpose. The machine was in fact the machine subsequently sold to Integral Energy; · The defendant recalled all wood chipping machines for modification except the machine sold to Integral Energy which indicated it did not require modifications at that time and another machine that did not require modification; · In order to modify the machine the defendant commissioned a risk assessment report from R K Findlay Pty Limited Consulting Engineers. The defendant modified the machine in accordance with the Findlay recommendations; · At the time of swearing the affidavit the recall and modification process was well underway. The modifications will substantially improve the safe operation of the machine; · There was a significant cost involved in modification including the cost of constructing modification kits of $13,875.00.

6 Mr Brown was called to give brief oral evidence. His evidence was that the defendant ceased trading as the official importer and distributor of the wood chipping machine in May 2000 and that the defendant had made substantial modifications to the re-called wood chipping machines at its own expense.

7 Mr G Phillips, solicitor, appeared for the prosecutor. Mr Phillips' submissions may be summarised as follows:

· The primary factor to be considered in determining the appropriate sentence is the objective seriousness of the offence charged (see Lawrenson Diecasting Pty Ltd v WorkCover Authority of NSW (Inspector Ch'ng) (1999) 90 IR 464 at 474, WorkCover Authority of NSW (Inspector Page) v Walco Hoist Rental Pty Ltd (No2) (2000) 99 IR 163 per Wright J at 185. · In assessing the nature and gravity of the offence it is appropriate to consider whether or not the risks associated with using the machine were reasonably foreseeable. In this regard, the defendant provided a User Manual indicating the machine was dangerous. Further the decals on the machine indicated that it was dangerous to reach inside the feed chute. The risk was, therefore known to the defendant. The fact that the risk was not only reasonably foreseeable but had been actually identified as a risk to safety puts the offence at the more serious end of the range. · There was every prospect of serious consequences arising from a breach of the Act by the defendant. The injuries to Mr Butterfield could have been fatal. Such a breach ought to be assessed on a different basis from a breach that was unlikely to have such consequences. · After the incident a number of simple, straightforward steps were taken to obviate the risk to users of the machine. There was no suggestion that these steps could not have been taken prior to the incident. · The maximum penalty for the offence is $550,000. · The defendant has no prior convictions under the Act. · The defendant entered an early plea of guilty and is entitled to a discount on the sentence imposed. · In determining the appropriate sentence, the Court should give "great credit" for the voluntary step taken by the defendant in recalling all machines and effecting modifications to improve the safety of the machine. · The defendant continues in business as an importer and distributor of construction equipment including light earthmoving equipment. The propensity of the defendant to re-offend must be considered in determining the weight to be attached to specific deterrence, although it is acknowledged that the steps taken by the defendant in relation to recall of the machines necessarily means that specific deterrence may not represent as a significant feature. In any event deterrence will be an element in sentencing in order to encourage sufficient levels of diligence by the defendant in the future. · There are three other cases involving injuries caused by wood chipping machines: WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd [2001] NSWIRComm 50; WorkCover Authority of New South Wales (Inspector Mulder) v Yass Shire Council (2000) 99 IR 284; WorkCover Authority of New South Wales (Inspector Lyons) v Active Tree Services Contracting Pty Ltd [2002] NSWIRComm 311. Arbor Products was an appeal from a decision of Marks J acquitting the defendant. The appeal was upheld. The penalty imposed was $30,000 but the penalty was fixed having regard to the impecuniosity of the defendant and the element of double jeopardy arising from a successful prosecution appeal. Yass Shire Council involved a fine of $130,000 for two breaches of s 15(1) which was reduced to $90,000 after applying the principle of totality. In that case the worker suffered traumatic amputation of both arms. Active Tree Services involved a prosecution under s15(1) where the defendant was fined $55,250 after a discount of 35 per cent. In that matter the worker suffered injuries when his arm came into contact with the infeed rollers of the wood chipping machine. · The prosecution seeks a moiety of the fine. The defendant has agreed to pay the prosecutor's cost in the sum of $10,000.

8 Mr R S Warren of counsel appeared for the defendant. The main points of Mr Warren's submission may be summarised as follows: · In considering the question of reasonable foreseeability the Court should take into account that in May 1998 the defendant provided a model 10 Morbark wood chipper to WorkCover in order that WorkCover could conduct an evaluation of the safety aspects of the machine. No complaint was made by WorkCover about the dangerous nature of the machine and no modifications were required or recommended. · The defendant has demonstrated an openness and willingness to cooperate and collaborate with WorkCover to achieve a safe way of operating the machine. · There is no propensity to re-offend given that the defendant no longer distributes the wood chipping machines. · The defendant has done all it possibly can to avoid a recurrence of the incident on 17 May 2001 by voluntarily recalling all machines and making extensive modifications at significant cost. · The defendant has an unblemished safety record. · The defendant entered an early plea of guilty.

· The defendant has expressed contrition. · The defendant's culpability is significantly less than that attributed to the defendant in Yass Shire Council. Consideration

9 In this case the defendant has pleaded guilty to a charge that in supplying plant (a wood chipping machine) for use by persons at work it failed to ensure that the plant was safe and without risks to health when properly used. The wood chipping machine in question, like the one that was the subject of appeal proceedings in WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81, was an inherently dangerous machine. That this was recognised by the defendant is evident from the warning decal on the side of the machine showing a person being dragged by the arm into the machine. This is in fact what occurred. Mr Butterfield's glove become caught in a branches being fed into the machine, dragging him into the machine by his right arm. Thus, the defendant was aware of the risk to safety, a risk that could have led to fatal consequences had it not been for Mr Morgan's intervention.

10 Moreover, it is clear on the evidence that not all that could reasonably be done to make the machine safe had been done. After the accident the defendant recalled wood chipping machines it had sold and made modifications to the machines to significantly improve the safety of their operation. Whilst these modifications came at a substantial cost to the defendant they did not involve any excessively complex re-engineering or re-design of the machine.

11 Whilst the defendant knew of the risks associated with the use of the machine and whilst it was reasonably practicable to make modifications to improve the safety of the machine, this is not a case of a defendant continuing to sell the machines in reckless or deliberate disregard of known and obvious dangers and, therefore, the objective seriousness of the offence is not as great as it otherwise would be. The defendant was obviously of the belief that whilst the machine was dangerous if not used properly, the risks it posed to operators was minimised as far as practicable by the training, instruction and information provided to customers on the sale of the machine. The defendant obviously believed this was an acceptable state of affairs and that it was complying with safety standards. Of course, this was not in fact the case given the absolute duty on the defendant to ensure that the machine was safe and without risks to health.

12 The defendant's belief that it was supplying a machine which complied with safety requirements was no doubt reinforced by the fact that it had supplied a wood chipping machine (the one eventually sold to Integral Energy) to WorkCover in May 1998 for the purpose of enabling WorkCover to evaluate the safety aspects of the machine and publish a safety standard. The defendant did not receive any adverse feedback from WorkCover regarding the safety of the machine. If it was WorkCover's intention to publish some type of standard or Code of Practice in relation to wood chipping machines it has not done so and this is despite the fact that there have been three prosecutions in connection with these machines involving serious injury in the last three years.

13 Designers, manufacturers and suppliers of these types of machines need to be made aware that either a particular standard has to be met or if that is not achievable (and I cannot understand why that could not be achieved) they need to be educated about the fact that machines such as the Morbark model 10 in its original configuration present a serious risk to the operator's safety. As it was said in WorkCover Authority (Inspector Barber) v Softwood Holdings Ltd t/as CSR Timber Products (1999) 89 IR 40 at 46: Part of the purpose of penalty is deterrence. In so far as other employers are concerned however, real and effective attention will only be drawn to the type of care which they must take … if adequate publicity is given to accidents and the results of prosecutions … Such publicity properly falls to the prosecuting WorkCover Authority and it is to be encouraged.

14 I note from the report by Simpson Associates Forensic Engineering that in its opinion, the Morbark model 10 did not meet the guarding requirements of Australian Standard 4024.1:1996 "Safeguarding of Machinery, Part 1: General Principles". Mr Warren for the defendant took issue with this and indicated it was a matter of some controversy in the industry about whether or not machines of a similar configuration to the Morbark model 10 did meet the Standard. I note that in WorkCover Authority of New South Wales (Inspector Mulder) v Arbor International (Australia) Pty Ltd [2000] NSWIRComm 12 Marks J found at pars [54-56]: 54 There was no evidence given in the proceedings as to the standing and status of Standards Australia and Australian standards issued by it. There was no suggestion that AS 4024.1 was an industry code of practice approved for the purpose of s 44A of the Act and thereby able to be used to establish an alleged contravention of the Act under s 44B. 55 The document AS 4024.1 contains some material about the organisation known as "Standards Australia" It states that that organisation "is an independent not-for-profit organisation, established in 1922. It operates formally under a Royal Charter as the Standards Association of Australia and has recognition as the peak Standards body in Australia through a Memorandum of Understanding with the Commonwealth Government. The essence of its operation is to bring together individuals and organisations committed to a common objective - to establish Australian Standards as national benchmarks for products and services so as to enhance quality of life and industry efficiency." The document also describes the standards as being "prepared by committees made up of experts from industry, governments, user groups and other sectors. The requirements or recommendations contained in published Standards are a consensus of the views of representative interests and also take account of comments received from other sources. They reflect latest scientific and industry experience. Australian Standards are kept under continuous review after publication and are updated regularly to take account of changing technology." 56 In the absence of any evidence or submissions to the contrary, I do not accept AS 4024.1 as having any particular status or as creating any particular standard, a breach of which would ipso facto give rise to a breach of an obligation under the Act. However, the standard having been admitted into evidence without objection I am prepared to accept it as constituting an expert opinion concerning the specific and general matters to which it refers. Accordingly I propose to approach the contents of the standard as representing an expert expression of opinion, albeit one which is accepted having regard to the qualifications contained within the document itself (some of which I have referred to), and subject of course to the acceptance of any contrary expert evidence. The findings by Marks J regarding AS 4024.1 were not the subject of appeal.

15 The question arises as to the weight to be given to deterrence in the sentencing process. As to general deterrence I am guided, indeed bound, by what was said by the Full Bench in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; 99 IR 29 at pars [71] - [80], namely, that the important consideration is to set the penalty at a level that will realistically operate as a deterrent but not so high as to be oppressive. As to specific deterrence, I take into account the highly commendable steps taken by the defendant to voluntarily recall and modify the wood chipping machines sold by it and the fact that the defendant no longer imports or supplies the Morbark model 10.

16 There are a number of subjective considerations to be taken into account. Firstly, the defendant entered an early plea of guilty and I find such a plea should attract a discount for its utilitarian value (see R v Thomson; R v Houlton (1999-2000) 49 NSWLR 383; and R v Sharma [2002] NSW CCA 142). Secondly, the defendant has no prior convictions under the Act. Thirdly, as the prosecution commendably conceded, the defendant should be given "great credit" for the voluntary step taken by it in recalling all machines and effecting modifications to improve the safety of the machine. Fourthly, the defendant has expressed contrition.

17 I assess an appropriate penalty to be $70,000. Given the early plea of guilty I would allow a discount of 25 per cent with a further discount of 10 per cent for the other subjective factors leaving a penalty of $45,500.

18 The Court makes the following orders: 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence as charged. 3. The defendant is fined an amount of $45,500 with a moiety thereof to the prosecutor. 4. The defendant shall pay the prosecutor's cost of the proceedings in an amount of $10,000.

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