Inspector Wilkie v Kennards Hire Pty Limited

Industrial Relations Commission (NSW)|1992-06-30|Before: Staff J, Fisher CJ, Cullen J, Mr P

Industrial Relations Commission of New South Wales in Court Session

CITATION : Inspector Wilkie v Kennards Hire Pty Limited [2004] NSWIRComm 167 PROSECUTOR Inspector Robert Wilkie PARTIES : DEFENDANT Kennards Hire Pty Ltd FILE NUMBER: 2601 of 2003 CORAM: Staff J CATCHWORDS : Occupational health and safety - Prosecution under s 18(1) of the Occupational Health & Safety Act 1983 - Woodchipping - Reliance upon third party - No injury - Foreseeability - Contrition - Defendant recalled machines Australia wide - Modification made - Risk - Plea of guilty - Penalty imposed - Defendant to pay the prosecution's costs of the proceedings as agreed or in accordance with rules of court LEGISLATION CITED : Occupational Health & Safety Act 1983 Benbow v Planada Holdings Pty Ltd [2001] NSWIRComm 275 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, (2000) 99 IR 29 Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) 90 IR 432 Inspector Alcatel Australia Ltd v WorkCover Authority (NSW) (1996) 70 IR 99 Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, CT 90/1214, 30 June 1992) Inspector Lyons v Active Tree Services Contracting Pty Ltd [2002] NSWIRComm 311 Inspector Wilkie v Batequip Pty Limited (formerly Bateman Equipment Pty Limited) T/as Ditch Witch Australia [2003] NSWIRComm 111 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 R v Thomson, R v Houlton (2000) 49 NSWLR 383 CASES CITED : R v Sharma (2002) 54 NSWLR 300 Nesmat Pty Limited v WorkCover Authority of New South Wales (1998) 87 IR 312 Wong v Melinda Group Pty Limited (1998) 82 IR 118 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonalds Australia Ltd (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Byer) v Cleary Bros (Bombo) Pty Ltd (2001) 110 IR 182 WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 WorkCover Authority of New South Wales v Kennards Hire Pty Limited [2003] NSWIRComm 378 WorkCover Authority (Inspector Gordon) v Walco Elevators Pty Ltd (Cullen J, IRC No 93/1117, 13 March 1996, unreported) WorkCover Authority of New South Wales (Inspector Mansell) v Anytime Industrial Services Pty Limited (2001) 110 IR 34 WorkCover Authority of New South Wales (Inspector Mulder) v Yass Shire Council [2001] NSWIRComm 57 WorkCover Authority of New South Wales (Inspector Victor Page) v Walco Hoist Rentals Pty Ltd (No 2) (2001) 99 IR 163 HEARING DATES: 05/05/2004 DATE OF JUDGMENT: 06/10/2004

PROSECUTOR Mr P Skinner of counsel Solicitor: Mr G Phillips Carroll & O'Dea LEGAL REPRESENTATIVES: RESPONDENT Mr S Coleman of counsel Solicitor: Mr R Howard Owen Hodge Lawyers

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION Coram: Staff J 10 June 2004

INSPECTOR ROBERT WILKIE v KENNARDS HIRE PTY LIMITED

Prosecution under s 18(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2004] NSWIRComm 167

1 On 23 May 2001 Kennards Hire Pty Ltd ("the Defendant") supplied a Model 65 Brush Bandit Woodchipper, Unit No 30568 to Integral Energy Australia ("Integral Energy") which was to be used by employees and sub-contractors of Integral Energy at work.

2 The defendant was prosecuted by Inspector Wilkie of the WorkCover Authority of New South Wales under s 18(1) of the Occupational Health and Safety Act 1983. Section 18(1) 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. 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 65 Brush Bandit Woodchipper Unit 30568 ("the machine") supplied the machine on or about 23 May 2001 to Integral Energy Australia ("Integral Energy") for use by employees and/or subcontractors of Integral Energy at work, and DID FAIL , on or about 23 May 2001 contrary to Section 18(1) of the Occupational Health & 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, to ensure its safe use.

4 The defendant pleaded guilty to the charge laid against it.

5 The Prosecutor tendered an agreed statement of facts in respect of the charge which contained the following facts (formal parts omitted).

At all material times, the Defendant, Kennards Hire Pty Limited (ACN 001 740 727), was an incorporated company in the State of New South Wales, whose registered office is at Level 1, 7-9 Parramatta Road, Concord 2137 in the State of New South Wales (hereinafter referred to as "the Defendant"), being a supplier of plant for use by persons at work, to wit a Model 65 Brush Bandit Woodchipper Unit No 30568 (registration number J69466) ("the machine"), supplied the machine on or about 23 May 2001 to Integral Energy ("Integral Energy") for use by employees and/or subcontractors of Integral Energy at work.

On 23 May 2001, Integral Energy made arrangements with the Defendant to be supplied with the machine for use by employees and/or subcontractors of Integral Energy at work.

On 23 May 2001, two subcontractors of Integral Energy, namely Mr Alan Morgan ("Mr Morgan") and Mr David Furniss ("Mr Furniss) collected the machine from the Defendant's depot at Airds Road, Campbelltown. On 23 May 2001, both Mr Morgan and Mr Furniss used the machine to chip vegetation at various sites, including sites in the suburbs of Bargo and Buxton in the State of New South Wales.

On 23 May 2001, when the Defendant supplied the machine to Integral Energy it did not supply with the machine any operating manual or safety video relating to the use of the machine. The defendant states that it supplied some verbal user instruction in relation to the use of the machine, in relation to the operation of the machine and basic safety instruction at the Defendant's depot, prior to hiring the machine.

There were numerous danger and warning notices displayed on the machine.

The machine was returned to the Defendant's premises for maintenance, and a further machine, Unit No. 32477 (registration number K41353) ("the second machine") was hired to Integral Energy. 8. The machines had a reversing bar which extended on each side and over the top of the in-feed chute. 9. The machine, which was initially hired by the Defendant, had a loading floor which was not horizontal at the loading face, but was angled towards (sic) at an angle of approximately 45 degrees. Due to the downward angling of the chute floor of the machine, the feed roller was in reach from directly in front of the drive roller.

The second machine had a modified loading chute with a straightened floor giving a greater horizontal distance from the in-feed roller. 11. The in-feed chute of the machine, which was initially hired by the Defendant, was insufficiently long to guard against the rapid intake of an operator who had become entangled in material being fed into the machine.

The machine lacked an easily accessible safety mechanism within the feed chute which would allow an operator who had become entangled in material being fed into the machine quickly to reverse or stop the operation of the in-feed roller.

The machine lacked an easily accessible safety mechanism accessible from within the feed chute which would allow an operator who had become entangled in material being fed into the machine quickly to reverse or stop the operation of the in-feed roller, although there was a reversing bar extending over the top of the feed chute. 14. The side guards of the in-feed chute were insufficient to protect against the rapid intake of an operator who had become entangled in material being fed into the machine. The feed roller of the machine was in reach from the sides of the machine.

The side guards of the fold down tray were insufficient to protect against the rapid intake of an operator who had become entangled in material being fed into the machine.

The use of the machine in accordance with the operator's manual provided by the manufacturer was inadequate to protect the use of the machine without the machine being unsafe and a risk to health. 17. The Defendant, Kennards Hire Pty Limited (ACN 001 740 727), an incorporated company in the State of New South Wales, whose registered office is at Level 1, 7-9 Parramatta Road, Concord 2137 in the State of New South Wales (hereinafter referred to as "the Defendant'), being a supplier of plant for use by persons at work, to wit a Model 65 Brush Bandit Woodchipper Unit No 30568 (registration number J69466) ("the machine") supplied the machine on or about 23 May 2001 to Integral Energy Australia ("Integral Energy") for use by employees and/or subcontractors of Integral Energy at work, and DID FAIL, on or about 23 May 2001 contrary to Section 18(1) of the Occupational Health & 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 person to whom it was supplied, namely Integral Energy, to ensure its safe use.

6 In addition to the agreed statement of facts the Prosecutor tendered a factual inspection report by Inspector R A Walker dated 7 June 2001 together with 16 colour photographs. Photographs 6 to 15 were of a Brush Bandit Model 65, Unit No 30568 Woodchipper.

7 The evidence of the defendant consisted of an affidavit of Mark Zimmer, the National Equipment Manager of the defendant and an affidavit of Scott Twigden, a Serviceman/Driver employed by the defendant. Neither were required for cross-examination. In his affidavit, Mr Zimmer stated that the defendant was established in 1948 and has now over 70 branches throughout Australia. It assists in various community initiatives and contributed a total of $268,730 by way of charitable donations to organisations in the financial year ending June 2003.

8 Mr Zimmer detailed the history surrounding the purchase of woodchippers which were added to the defendant's fleet in mid 1995. The defendant engaged Marriott Tree Equipment Pty Ltd ("Marriotts") in 2000 to service woodchippers and to provide Kennards staff with training in relation to the maintenance and safety of use of the woodchippers. Woodchipping machines were serviced every 100 hours. Since its purchase in 1997, the Brush Bandit Woodchipper 30568 has been serviced on five occasions, the last being in June 2001. The machines were also serviced in-house "after each hire". In 1998 Mr Zimmer became aware that WorkCover and Marriotts were involved in a consultative committee reviewing safety aspects of woodchippers. Marriotts provided a risk assessment in respect of woodchippers to the defendant in February 2000.

9 Mr Zimmer stated that on or about the time that the defendant received the prohibition notice (12 June 2001) Marriotts provided the defendant with a copy of a code of practice. It was at that time that Kennards became aware of the guarding specifications in the document which had apparently been known to Marriotts since 1998. Marriotts had conducted training sessions with the defendant in 1997, 1999 and 2000.

10 On or about 17 January 2001 Mr Zimmer received an invitation from Marriotts to participate in a safety update programme initiated by the American manufacturers. Mr Zimmer's evidence was that the defendant had become aware of safety issues and the manufacturer's recommendations on or before August 2000. It was proposed that new machines purchased by the defendant would have upgraded safety devices. The defendant initiated a safety updated programme in May 2001, prior to the prohibition notices, on the basis of the 100 hour service by Marriotts. Mr Zimmer's recollection is that Marriotts did not have parts in stock to enable them to upgrade safety devices on the relevant machine. The hire agreement in respect of the Brush Bandit Woodchipping machine was annexed to Mr Zimmer's affidavit. It contained a notation initialled by an employee of Integral Energy verifying he had received "user instruction" prior to hiring the machine.

11 Mr Zimmer described the steps taken by the defendant after receiving the prohibition notices from the WorkCover Authority on 12 June 2001 and 11 July 2001. These steps included: · all woodchippers in the fleet be immediately recalled for the purpose of the proposed modifications. Modifications were to be done through the defendant's Girraween office with the exception of Canberra and Queensland who were provided with instructions to effect modifications. · the modifications were discussed with Inspector Wilkie of the WorkCover Authority. It was determined that Marriotts would make a prototype for WorkCover to approve. The input tray of the woodchippers and sides were raised. A "last chance" device was also fitted onto the machines which was essentially an emergency stop cable located over the input hopper which, when pulled, stopped the machine's operation.

· the prohibition order in respect of machine 30568 was lifted on 23 August 2001. Prior to the prohibition notice being issued, training was in accordance with the Employee Handbook. Since 2001 Branch Managers have received accredited training coaching competence to properly impart knowledge and successfully conduct training of other staff. Staff training includes the use of flow charts covering each step to follow including customer information flow charts for woodchippers. User guides for all equipment including woodchippers have been provided to all branches. This is in addition to laminated safety procedures which are attached with a metal ring to the machines.

· since 2001 Kennards have spent $287,654 in customer information training.

· the defendant also practices a quality management process to ensure safety and reliability standards are of the highest order. All branches are assessed six times a year without notice by two auditors at a cost of over $300,000 per year.

12 Mr Zimmer said that in the previous 12 months the defendant had hired woodchippers on 463 occasions and that in the eight years that woodchippers have been part of the defendant's fleet, this was the first time that there had been a safety related matter involving woodchippers.

13 Mr Zimmer described Kennards actions after receiving the prohibition notice from WorkCover. This included the defendant applying to be part of a premium discount scheme within WorkCover Authority. This scheme allows employers to gain a rebate on their WorkCover insurance premiums, if they demonstrate to an independent assessor, that their workplace has certain consistent safety standards in place. The defendant reviewed all internal safety training at its workplaces. The defendant "passed" the assessment at the first formal attempt. The defendant has also increased awareness of workplace safety across its network. In 2002, Marriotts offered to supply the defendant, with Model 65 Woodchippers that have modifications fitted to meet WorkCover requirements.

14 Finally, Mr Zimmer stated that in its 56 years of operation, the defendant has been prosecuted on only one occasion by WorkCover.

15 Mr Scott Twigden, in his affidavit, deposed that he was employed as a Serviceman/Driver with the defendant based at its Campbelltown Branch. Mr Twigden recalled hiring a woodchipper to Integral Energy on 23 May 2001 and providing Integral Energy with some user instruction which included, how to start and stop the machine, never to reach into the feed chute, use a "pusher stick" if branches become stuck and to call the defendant if there were any problems.

16 A notation on the hire contract was made by an employee from Integral Energy confirming that user instruction was given. Mr Twigden recalled that attached to the machine were three laminated pages regarding safety procedures. A pusher stick was also supplied.

17 Mr P Skinner of counsel appeared for the prosecutor. Mr Skinner's submission may be summarised as follows: · the primary fact 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 New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474.

· the defendant had an obligation to safety pursuant to the Act.

· the reliance upon Marriotts does not assist the defendant. The defendant had become aware of the safety issues and manufacturer's recommendations in or before August 2000 and therefore were aware of the risks associated with using woodchipping machines, which were reasonably foreseeable. · the approach that the Court should adopt in respect of sentencing is to be found in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; (2000) 99 IR 29.

· the maximum penalty for the offence was $825,000.

· the defendant had one prior conviction under the Act.

· the defendant entered an early plea of guilty and is entitled to a discount on the sentence imposed.

· the defendant co-operated with the WorkCover Authority.

· the Prosecution seeks a moiety of the fine and costs.

18 Mr S Coleman of counsel appeared for the defendant. The main points of Mr Coleman's submissions may be summarised as follows: · in assessing the nature and quality of the offence, the principles in Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 are applicable. · the breach is not one where there was a known and perceived danger, unchecked, and left in place.

· in determining penalty, attention is to be given to the nature and degree of seriousness of the relevant detriment to safety, together with applicable mitigating factors. · This is not a "worst case category matter": WorkCover Authority (Inspector Gordon) v Walco Elevators Pty Ltd ( Cullen J, IRC No 93/1117, 13 March 1996, unreported).

· the steps to remedy the matter were not at all simple and straightforward: Inspector Benbow v Planada Holdings Pty Ltd [2001] NSWIRComm 275.

· the risk posed by the woodchipper machine was foreseeable, however, it had been foreseen and addressed prior to the prohibition notice insofar as this was possible by the defendant which was then unaware of the guarding issue. · the defendant entered an early plea of guilty. · although there was no accident, the defendant demonstrated contrition by its activity following the prohibition notices; its co-operation with WorkCover; its development and approval of modifications which it had fitted to the machines nationally, after a recall and its development of improved safety and quality systems which ensure that customers have not only reliable machines but safe ones. The defendant should receive due credit for its excellent statistics in safety performance and the existence of safety procedures which may mitigate the seriousness of the offence: Warman . The defendant's prior and subsequent safety record; the defendant's industrial record - indicate good industrial citizenship. · the Court may take into account the culpability of an absent party in sentencing. WorkCover Authority of New South Wales (Inspector Byer) v Cleary Bros (Bombo) Pty Ltd (2001) 110 IR 182. The defendant should receive some recognition, when assessing the objective seriousness of the offence, that Marriotts played a significant part in the offence: see in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 where Walton J said, at 437: In my view, the court did not apply the principle of parity per se in Nesmat or Wong . The court did not assess the relative penalties appropriate to various offenders (regardless of the sections charged) but rather had regard to the nature of the detriment to safety occasioned and the contribution of the defendant to such detriment in assessing the objective seriousness of the offence committed by the defendant. In doing so the court had regard to the actual contribution of the defendant for the purposes of assessing penalty.

The absence of a prosecution of another entity merely serves to emphasise the unfairness that may be occasioned to a defendant in the assessment of the objective seriousness of an offence if a proper assessment of their contribution to an accident is not undertaken.

· the defendant co-operated fully with WorkCover and with Marriotts to ensure the machine was properly guarded and had the relevant safety items, prior to the lifting of the prohibition notice.

19 In respect of sentencing statistics the following cases were drawn to the Court's attention and a summary of the findings and penalties provided as follows: i) Inspector Lyons v Active Tree Services Contracting Pty Ltd [2002] NSWIRComm 311 - s.15(1) plea - no priors - chipper - employee injured - machine inherently dangerous although in manufactured condition; Peterson J; $55,250 after discount of 35%.

ii) Inspector Wilkie v Batequip Pty Limited (formerly Bateman Equipment Pty Limited) t/as Ditch Witch Australia [2003] NSWIRComm 111 - s 18 - plea - no priors - chipper - labourer injured - serious injuries - supplier charged - fine assessed at $70,000 less 35% - $45,000.

iii) WorkCover Authority of New South Wales v Kennards Hire Pty Limited [2003] NSWIRComm 378 - s18 - plea - no priors - proportion of most extreme case is 1/10. Fine assessed at 55,000 less 25% discount - $41,250.

iv) WorkCover Authority of New South Wales (Inspector Mulder) v Yass Shire Council [2001] NSWIRComm 57 - 2 prosecutions under s.15(1) - Plea - serious amputation accident - totality. Fines for each offence assessed at $65,000 each, but with totality, a fine for both equivalent to $45,000 each.

20 In considering offences under the Act for the purposes of penalty, the Court must start by considering the objective seriousness of the offence. That principle is well settled and was expressed by a Full Bench of this Court in Lawrenson Diecasting Pty Ltd at 476 where the Court said: In the case of an offence under s 15(1) of the OH&S Act, there are a number of factors which may tend to establish the existence of an objectively serious offence. It will be a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and feasible: see Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, CT 90/1214, 30 June 1992) at 9. The gravity of the consequences of an accident does not, of itself, dictate the seriousness of the offence. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and the culpability of the defendant: see Tyler v Sydney Electricity (1993) 47 IR 1 at 5.

21 In this case the defendant has pleaded guilty to a charge that in supplying plant (a woodchipping machine) for the use by persons at work, it failed to ensure that the plant was safe and without risk to health when properly used.

22 In light of the evidence of Mr Zimmer, that after the prohibition notices were issued by the WorkCover Authority all woodchipping machines were recalled for modification to the standard of guarding and inclusion of last chance devices which had been approved by WorkCover, this must result in a finding that the woodchipping machine was inherently unsafe. However, unlike a number of cases referred to earlier in this judgment, dealing with the woodchipping machines, no accident occurred in respect of the defendant's machine. This, of course, is not decisive of the seriousness of the risk as stated earlier as per Lawrenson Diecasting.

23 It is relevant to the objective seriousness of the offence to consider if there were readily and easily available remedial steps which could have been undertaken by the defendant to ensure that the plant was safe and without risk to the health of users.

24 Upon becoming aware that the machine was unsafe, the defendant immediately took steps to address the obvious dangers and therefore the objective seriousness of the offence is not as great as it otherwise would be. However, Mr Zimmer's evidence was that the defendant had become aware of the manufacturer's recommendations and safety issues on or before August 2000. This safety issue appears to relate to upgraded safety devices. The upgrade was to occur with the 100 hour service. It seems to me that the defendant, upon becoming aware of the safety issue, should have had all machines recalled immediately as it did when it received the prohibition notice. Furthermore, Marriotts wrote to the defendant on 17 January 2001 inviting it to participate in a safety update program in the following terms: Re - Chipper Safety Update Program Last year Bandit put into place a program whereby they will supply parts kits to upgrade your chipper with the latest safety features at no cost to you. With WorkCover NSW cracking down on chipper safety, this will (sic) the perfect opportunity for you (sic) get your older machine up to year 2000 safety specs (sic) at a minimal cost. Here's how it works...

25 The defendant, whilst realising the machine was dangerous if not used properly, attempted to minimise the risks as far as practicable by training, instruction, and information provided to a hirer. This included attaching three laminated pages regarding safety procedures to the machine and providing a pusher stick. The defendant believed that this was an acceptable approach and that it was complying with safety standards. This was not in fact the case given the absolute duty upon the defendant to ensure the machine was safe and without risk to health.

26 This belief was reinforced by entering into a maintenance agreement with Marriotts who the defendant relied upon for safety and servicing training sessions. Mr Zimmer's evidence was that in 1998, he became aware that the WorkCover Authority and Marriotts were involved in a consultative committee reviewing safety aspects of woodchippers. Although a code of practice for the "Amenity Tree Industry" was issued by the WorkCover Authority of New South Wales in August 1998, Marriotts only provided a copy of this document to the defendant on or about the time that the prohibition notice was issued.

27 The defendant raises the culpability of an absent party in sentencing. The relationship between the defendant and Marriotts is relevant to the extent that it casts light upon the level of the culpability of the defendant themselves. The role performed by Marriotts in respect of the maintenance of equipment and the provision of advice may be relevant to the reasonableness of the defendant's actions. The culpability of the defendant should be assessed in light of the reliance placed by the defendant upon Marriotts to provide various services and advice regarding safety.

28 Walton J Vice-President in McDonald's Australia Ltd considered the extent that reliance upon the expertise of other entities was relevant to penalty. In that instance, it involved the supply, installation and maintenance of equipment in use in restaurants. His Honour said at 437: The culpability of the defendants should be assessed in light of the systems which were in place and the reliance which was placed upon third parties to provide various services both in relation to the particular restaurant involved in this case and in the system of safety employed in the entire McDonald's System.

29 Walton J at 437 then referred to a possible unfairness: ... that may be occasioned to a defendant in the assessment of the objective seriousness of an offence if a proper assessment of their contribution to an accident is not undertaken.

30 His Honour went on to observe at (447): Whilst the defendants did contract with various entities to provide services to its franchisees, they nonetheless retained a significant role through the instigation, monitoring and evaluation of programs relating to the installation and maintenance of equipment. They were not, as the defendants themselves sought to describe it, entirely dependent upon Lennard and Mercer in relation to the safe installation and maintenance of the equipment in use in their restaurants. ... However, I would express my doubt that an argument such as that raised by the defendants would normally result in the very substantial reduction in penalty sought by the defendants. I do not consider that a person who has control of non-domestic premises made available as a place of work or control of plant provided for use or operation at work and who fails to ensure that the premises or plant are safe could escape the bulk of their culpability under s 17 of the Act by seeking to delegate responsibility for maintenance to third parties.

31 In WorkCover Authority of New South Wales (Inspector Mansell) v Anytime Industrial Services Pty Limited (2001) 110 IR 34 Kavanagh J examined the level of culpability of an employer when reliance was placed by the defendant company upon procedures and assurances from third party corporations of equal stature. After examining various authorities including Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) 90 IR 432, Nesmat Pty Limited v WorkCover Authority of New South Wales (1998) 87 IR 312; Wong v Melinda Group Pty Limited (1998) 82 IR 118 and McDonald's Australia Ltd, her Honour said at (42): As an employer the defendant company has an absolute obligation to provide a risk free work environment for its employees. So too does the employer conducting an undertaking at its place of work, namely, the Principal. Large corporations, once they contract-out their work must empower, within the contractual relationship, the contractor to play a role in the decision-making process even if it is the Principal's defined safety procedures that are followed for the risk assessment of the task and the design of the work method to be adopted. ... In an assessment of the gravity of this offence the defendant company assumed none of its responsibilities. The employer had a false sense of security as to safety on this worksite arising from his perception the Principal had in place a comprehensive safety awareness practice and task specific worksafe procedures. This created a serious risk to the safety of its employees.

32 Walton J in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 dealt with a submission where the defendant sought to submit that his culpability should in some way be lessened by the fact that he was the "building contractor" and that, as such, he had "limited authority" or "responsibility" in relation to a partially completed swimming pool at a site on which the defendant was constructing a dwelling house.

33 His Honour examined an extensive number of authorities which considered the culpability of a defendant where a number of employers, contractors and individuals may be involved in working at a particular site.

34 His Honour said at 299-300: In the present circumstances, the defendant's submission is untenable. The duty to be proactive falls equally upon each and every employer or self-employed person on a particular site, subject, of course, to a consideration of whether the risk emanated from the relevant "undertaking" and "place of work". However, when determining an appropriate penalty in circumstances where more than one individual or legal entity can be said to have contributed to the relevant risk, it is important to view the nature and seriousness of the defendant's offence by reference to the contribution of the defendant to the relevant risk: Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd (2001) 105 IR 348; WorkCover Authority (NSW) (Inspector Ankucic) v McDonalds Australia Ltd (2000) 95 IR 383 at 437; WorkCover Authority (NSW) (Inspector Victor Page) v Walco Hoist Rentals Pty Ltd (No 2) (2001) 99 IR 163 at par 31; Nesmat Pty Ltd v WorkCover Authority (NSW) (1998) 87 IR 312 and Alcatel Australia Ltd v WorkCover Authority (NSW) (1996) 70 IR 99. 35 In this matter, it is not appropriate to embark upon an enquiry as to whether the prosecution could have been commenced against Marriotts. To attempt to assess Marriott's culpability would be to fall into error. However, I agree with the defendant's submissions that it should receive some recognition, when assessing the objective seriousness of the offence, that Marriotts played a significant part in the offence.

36 Mr Zimmer's evidence was that the defendant initiated a safety update program prior to the prohibition notices in May 2001 on the basis of the 100 hour service by Marriotts. The safety update program appears to have been implemented after the letter of 17 January 2001 from Marriotts to the defendant. However, the fact that Marriotts did not have parts in stock to enable them to upgrade safety devices on the relevant machines does not remove the culpability of the defendant. The defendant has an absolute duty to ensure that the relevant machine was safe and without risk to health of those who used it. Waiting for parts to become available, or the 100 hour service, could have resulted in serious injury to a user.

37 In imposing a penalty in this matter, regard must be had to general and specific deterrence. In Capral Aluminium Ltd the Full Court said in referring to both general and specific deterrence at [74]: We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Ltd accurately states the approach that members of this 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.

38 Later at [77] the Full Bench said: 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). However, we think it unlikely that the weight to be attached to specific deterrence could be reduced to zero in case of offences under the Act.

39 The evidence discloses that the defendant modified the woodchippers to comply with the guarding requirements mandated by the WorkCover Authority to meet the relevant Australian standard. This was not an issue which had been raised prior to the prohibition notice in any of the manufacturer's literature. However, Marriotts had written to the defendant on 17 January 2001 regarding the safety upgrade of Woodchippers and the defendant had been aware since August 2000 of the manufacturer's advice regarding upgraded safety devices.

40 It was submitted that the defendant had reasonably assumed that the supplier had properly carried out an assessment according to the National Occupational Health & Safety Commission Standards, and that the machines were therefore compliant with such standards. This submission cannot be accepted. The obligation to ensure the health and safety of plant falls on the defendant who was on notice from August 2000 that the safety devices on the machines should be upgraded. I note the upgrade was delayed due to Marriotts not having parts.

41 The question arises as to the weight to be given to general deterrence in the sentencing process. The relevant principle was stated by the Full Bench in Capral Aluminium Limited at [71] - [80], namely, that the important consideration is to set the penalty at a level that will not simply operate as a deterrence but that is not so high as to be oppressive.

42 In Inspector Wilkie v Batequip Pty Limited (formerly Bateman Equipment Pty Limited) T/as Ditch Witch Australia [2003] NSWIRComm 111 Boland J said at [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.

43 I agree, with respect, with his Honour's observations and in doing so observe that it is the question of general deterrence which will play a significant role in the exercise of my discretion.

44 In respect of specific deterrrence, I take into account the immediate steps taken by the defendant which involved a national recall of all woodchipping machines for modification to the standard of guarding and the introduction of last chance devices which were approved by WorkCover; user guides are now provided with machines and given to all customers in addition to the safety procedures that are attached to the machine. An amount of $287,654 has been spent on customer information training since 2001. An audit team has been established for the purposes of attending every branch of the defendant to ensure that modifications to the machines are carried out. Nonetheless, the defendant is engaged in an ongoing business and therefore I propose to include a modest factor for specific deterrence.

45 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 attact a discount for the utilitarian savings achieved by the plea (R v Thomson; R v Houlton (2000) 49 NSWLR 383; and R v Sharma (2002) 54 NSWLR 300). Secondly, the defendant has been operating since 1948 and this is the second prosecution by WorkCover. Thirdly, the defendant should be given credit for the voluntary steps taken by it in recalling all machines and effecting modifications to improve the safety of the machines. Fourthly, the defendant co-operated with the authorities. Fifthly, the defendant has expressed contrition.

46 In my view, this is not a case of neglectful hire of faulty equipment. It is a most unfortunate circumstance where the equipment hired had the potential to cause injury. In terms of gravity the offence is not at the upper end of the scale. While there was not the level of instruction provided prior to the prohibition notice, there was some instruction given, a pusher pole supplied, laminated instructions attached to the machines and modifications were made to machines as safety recommendations were made available.

47 On the evidence, the defendant has shown itself to be a good corporate citizen over the past 55 years and, notwithstanding its one prior conviction, to have an exceptional record in the industry. It has qualified for the discount premium scheme on its WorkCover insurance premiums. It has approximately 850,000 hires annually and in the last five years had only 18 claims on its public liability insurance. Its record in what is clearly a dangerous industry reflects the defendant's contention that this matter is an aberration which the defendant, acting not entirely unreasonably, failed to foresee.

48 I assess an appropriate penalty to be $105,000. Given the early plea of guilty, I would allow a discount of 25% with a further discount of 10% for other subjective factors, leaving a penalty of $68,250.

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 $68,250 with a moiety thereof to the prosecutor.

The defendant shall pay the prosecutor's costs as agreed or as determined in accordance with the Rules of the Court.

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Safety Act 1983(NSW)

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Cases Cited (22)

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