Morrison v Fuchs Lubricants

Morrison v Fuchs Lubricants - [2010] NSWIRComm 5 - NSWIRComm 2010 case summary — Zoe

[5]

Alcatel Australia Ltd v WorkCover Authority of New South Wales (1996) 70 IR 99 Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 Haynes v CI & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 Inspector Howard v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125 Inspector Kent v Duct Master Pty Ltd [2009] NSWIRComm 143 Inspector Legge v Intercast & Forge Pty Ltd [2006] NSWIRComm 182 Inspector Mayo-Ramsay v Rail Infrastructure Corporation [2002] NSWIRComm 217 Inspector Mayo-Ramsay (WorkCover Authority of NSW) v The Crown in the Right of the State of New South Wales (NSW Fire Brigades) (No 2) [2007] NSWIRComm 168 Inspector Patton v Western Freight Management Pty Ltd (No 2) [2009] NSWIRComm 124 Inspector Przibilla v Hyne & Son Pty Limited [2004] NSWIRComm 384 Inspector Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138; (2007) 164 IR 198 Inspector Simpson v Tomago Aluminium [2005] NSWIRComm 117 CASES CITED: Inspector Swadling v Empire Talkies Pty Ltd [2003] NSWIRComm 191 Inpector Amanda Templeton v Pirelli Cables Australia Limited [2003] NSWIRComm 177 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Maddaford v CSR Ltd [2004] NSWIRComm 337 Markarian v R [2005] HCA 25; (2005) 228 CLR 357 Morrison v Centennial Coal Company Limited & Anor [2010] NSWIRComm 4 Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364 Postiglione v The Queen (1997) 189 CLR 295 Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465; (1988) 77 ALR 385 Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority of New South Wales (Inspector Ankucic) v Crown in the Right of the State of New South Wales (Department of Education and Training) [2001] NSWIRComm 313; (2001) 112 IR 1 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Ian Batty) v Graincorp Operations Ltd [2001] NSWIRComm 127 WorkCover Authority of NSW (Inspector Lyons) v Warman International Ltd [2001] NSWIRComm 62; (2001) 105 IR 236 WorkCover Authority of NSW (Inspector Sequeira) v Foti's International Fireworks (Displays) Pty Limited [2003] NSWIRComm 471 Workcover Authority of New South Wales (Inspector Stobo) v State Rail Authority of New South Wales [2002] NSWIRComm 72; (2002) 115 IR 130

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5 An agreed statement of facts was tendered by the prosecutor, annexing the following documents: (i) plans of the accident scene; (ii) diagrams of the relevant machinery; (iii) photographs of the work area, pump station, glass jars placed at the pump station, hose and connection point, heavy duty shifter, simulation of extraction of staple, overview of equipment at the pump (ball valve, lock out plates, staple, straight swivel female to BSPP male, dowty washer and elbow adaptor); (iv) CENT Service Site Report dated 26 June 2006 and signed by the deceased; (v) Department of Industry & Investment: Certificate of Prior History recording no prior convictions under the relevant occupational health and safety legislation; and (vi) WorkCover New South Wales: Certificate of Prior History recording no prior convictions under the relevant occupational health and safety legislation. 6 In addition, the prosecution adduced into evidence a DVD, which was viewed by the Court. The DVD was filmed after the incident, and ran for some three minutes. The scene was of the area in which the incident occurred, displaying the conveyor belt and pump in the room. The footage provided a close up view of the pump station and various parts contained therein. Mr Agius SC for the prosecutor, highlighted significant aspects of the footage as it ran, such as pointing out the fitting, block, passage for hydraulic fluid, hose and its connection to the fitting and the staple sliding into the fitting to affix it to the block. Mr Agius stated that the lighting in the footage was artificial for the purposes of visibility; however, the area would have much darker at the time of the incident. Nevertheless, Mr Hansen would have been assisted by a helmet light and other lighting in the area and the Court is satisfied that poor lighting did not contribute to Mr Hansen's death. The prosecution adduced a replica of the incident fitting into evidence. The fitting had attached a metal staple. 7 The defendant relied on an affidavit of Mr Stewart Knight, sworn in his capacity as Deputy Managing Director of the company (and its predecessor company). Mr Knight was not required for cross-examination. Annexed to his affidavit were the following documents: · Fuchs' Contract with Centennial Coal · Documents evidencing Kevin Hansen's trade qualifications · Diagram showing reporting structure at Fuchs at the time of the incident · Records from Kevin Hansen's personal diary and Fuchs daily report computer system · Kevin Hansen's Personal Performance Review · Reassessment of Induction to work underground · Kevin Hansen's Underground Induction Assessment Books · Diary note of Kevin Hansen · Fuchs Health and Safety Policy · Fuchs Safety Management Plan relating to the collection of oil samples from mine site equipment in respect of Mandalong Colliery · Fuchs Risk Assessment in respect of the collection of longwall emulsion samples from longwall equipment · Fuchs Risk Assessment in respect of the collection of oil samples from mining equipment (miners/shuttle cars) · Fuchs Risk Assessment in respect of the collection of longwall emulsion samples from longwall supports · Fuchs New Safety Management Plan for collecting samples from mine site equipment · Fuchs Oil/Coolant Sampling Policy · List of Safe Work Procedures (SWPs) developed since the Incident · Safe Work Procedure for collecting oil samples from mine site equipment at the Beltana Longwall · Product Safety Sheet Example "Anticorrosive Oils 2" · Fuchs Job Safety and Environment Analysis (JSEA) Procedure · Job, Safety and Environment Analysis Worksheet for "Emulsion Sampling of Longwall Equipment" and a list of JSEAs currently in place relating to the Underground Mining Division · Fuchs Health and Safety Management Policy · Fuchs Health and Safety Management Plan · Fuchs Petrolub Group - Guideline - Occupational Health and Safety (OHS) at Fuchs Petrolub AG · Screen shot of the Fuchs Intranet Site · Fuchs National Occupational Health and Safety Committee Charter · Fuchs Site Safety Rules · Fuchs Induction Process and Induction Checklist · Fuchs Corporate Training Calendar 2009 · Montie Training DVDs list · Graph of LTIF rate · Quality Environment Safety Template (QUEST) 8 Mr Hansen was employed as a service engineer by the defendant and had worked for the company since January 1997. He commenced work in the coal mining industry in January 1985. The defendant supplies oil products and related services including raw 'Solcenic 2020' hydraulic oil to collieries in New South Wales. At the time of the incident, the defendant had contracted with Centennial Coal to supply oil products, including solcenic emulsion, and services used in relation to the operation of hydraulic equipment in its longwall operations at Angus Place colliery, as well as other collieries operated by that company. Part of the contract involved the regular taking and analysing of samples of the solcenic emulsion contained within the hydraulic system, including within the pump station (which could be affected by dirt and bacteria), the purpose of which was to test the quality of the fluid and allow for the monitoring of the performance of the filters at the pump station. The role of service engineer required, in part, Mr Hansen to take samples from hydraulically operated plant at various underground mines. The role also required Mr Hansen to provide technical advice, including 'trouble shooting' on the hydraulic plant he serviced as part of his duties. 9 The agreed facts described the circumstances leading to the death of Mr Hansen: · At approximately 2.45pm on Wednesday 26 July 2006 Mr Hansen entered the Angus Place Colliery in order to take the monthly samples. At about 3.00pm he travelled underground with the afternoon shift crew. On arrival at the Longwall Mr Hansen collected three solcenic emulsion samples from chocks at the face line of Longwall 930. · Mr Hansen then walked from the face line to a location known as cut-through number 9 of the 930 Panel, where the Pump Station was located. This was approximately 482 metres away (outbye) from the operating Longwall face line. · Mr Hansen had with him at that time, inter alia, three labelled bottles used to sample fluid from the Longwall chocks plus a further five empty, labelled sample bottles to be used to contain fluid to be taken from the Pump Station. · Mr Hansen was at this point working alone without supervision. · At approximately 4.l4pm the Pump Station, which was running, suffered a sudden loss of pressure consistent with a fitting being opened releasing pressurised fluid. · The Pump Station ran for approximately 40 seconds after the sudden loss of pressure before automatically shutting down as a result of sustained hydraulic oil pressure loss in the system. · At about 4.30pm the Afternoon Shift Maintenance Crew Leader, John Sheehan, an employee of Centennial Angus Place, entered the number 9 cut-through to investigate why the Pump Station had shut down. He found Mr Hansen lying on the ground adjacent to the delivery end of the Pump Station. Mr Hansen had severe facial injuries; he had no pulse and did not show any sign of breathing. A 375mm shifter was located nearby. · Placed on the Pump Station adjacent to where Mr Hansen lay were three empty sample bottles labelled "Post HP Filter", "Bulk Tank", and "Mixing Unit". Also on the Pump Station was a bottle labelled diluent water containing already sampled fluid. Mr Hansen's bag contained inter alia three labelled bottles containing fluid taken from the Longwall chocks; namely the maingate support, mid face support and tailgate support samples. It also contained a labelled bottle containing the return line sample apparently taken from the Pump Station. · Directly adjacent to where Mr Hansen lay was an open fitting between the high pressure delivery manifold and the system pressure drain line, where a straight swivel female to BSPP male (Part No PS115-10-06) had been connected to a swivel male female 90° elbow (Part No Ps76-10) ("the Incident Fitting"). The Incident Fitting was of a type that was opened by the removal of a 10mm staple. · When the Pump Station was operational and at full pressure, as it was at 4.14pm on 26 July 2008, upon that fitting being opened by removing the staple, solcenic emulsion fluid pressurised to 305bar would have been ejected at approximately 200 metres per second or 720km per hour, reducing to about 160 metres per second after approximately 60 seconds. · Mr Hansen suffered a serious injury to his face consistent with being struck in the face by solcenic fluid at high pressure while his face was in the trajectory of the ejecting fluid. Immediately above the Incident Fitting there was found a 50mm deep hole in the roof 2.6m above the Incident Fitting consistent with high pressure solcenic fluid being released and hitting the roof. · There were no eye witnesses to the event. · It appears that Mr Hansen's death occurred as a result of him using the shifter to remove the staple from the Incident Fitting whilst the Pump Station was operating. Upon the staple being removed the Incident Fitting would have separated under high pressure causing the emulsion fluid to eject straight up striking Mr Hansen in the face and killing him. The force necessary to remove the staple from the Incident Fitting whilst the Pump Station was under full operational pressure was found to be well within the forces a person could exert. The required force to remove the staple would not have been so great as to be likely to indicate to Mr Hansen that the system was in fact under pressure. · It appears Mr Hansen removed the staple from the Incident Fitting in order to obtain the bulk tank and/or the post HP filter samples. On an earlier occasion Mr Sheehan had observed Mr Hansen removing a staple from another similar fitting attached to the same hydraulic line close by to obtain a bulk tank sample. That similar fitting was not under pressure. It would appear that on 26 July 2006 Mr Hansen opened the Incident Fitting by mistake. · Prior to 26 July 2006 Mr Hansen had taken the monthly samples from the Pump Station on six occasions commencing on 9 January 2006. · Fuchs required Mr Hansen to obtain the following monthly samples from the longwall hydraulic system: a. Five samples from six different locations on the Pump Station, namely: i. Diluent water; ii. Post HP filter; iii. Mixing unit; iv. Bulk tank; v. & vi. Return line (pre-return line and/or post-return line); and b. Three samples to be taken from the longwall chocks namely: vii. Maingate viii. Mid face. ix. Tailgate. 10 The prosecution submitted that Mr Hansen perhaps had in mind to take a sample. He removed the staple from the high pressure end. With the intense pressure in the system, the removal of the staple resulted in the fitting coming apart. There was then nothing to retain the pressure fluid, as it rose up in a column and fatally injured Mr Hansen. 11 The Statement of Agreed Facts set out the instructions, safe work procedures and risk assessments in place prior to the incident:

[18]

Mr Hansen was not informed or instructed as to what points on the Pump Station he should obtain the samples. On 26 July 2006 Mr Hansen had with him a one page document titled 'Cent Service Site Report' ("the Cent sheet"), identified by Fuchs to be the relevant instruction or work procedure for the task of sampling at the Angus Place Colliery. The Cent sheet identified the Fuchs customer as being Angus Place Colliery but was otherwise a generic document applicable to any longwall system. The Cent sheet listed sample points by generic references, namely: Bulk Tank; Mixer; Maingate; Midface; Tailgate; High pressure Filter; Return Line Filter; and Water The Cent sheet did not identify sample points specific to the RMI Pump Station from which Mr Hansen was required to take samples. The Cent sheet did not provide instructions as to the specific sample locations on the Angus Place Longwall System and in particular on the Pump Station nor the work method to be adopted to take such samples. The Cent sheet incorrectly recorded the pump type as 'Hauhinco', which was the previous pump station. Before the Pump Station had been commissioned underground, Mr Hansen and Mr Neil Moore, employed by Centennial Angus Place as the Longwall Superintendent, together inspected the Pump Station above ground. Mr Moore pointed out the valve on the hydraulic hose leading off from the mixer from which a sample could be obtained. In January 2006 Mr Hansen met with Mr Neil Moore. In that discussion Mr Hansen and Mr Moore examined a schematic diagram of the new Pump Station and discussed sampling points for three of the five monthly samples to be taken from the Pump Station, namely bulk tank, mixing unit and diluent water. No document was created recording the sample points. When Mr Moore discussed sampling points with Mr Hansen no arrangements were made for either Fuchs or Centennial Angus Place to provide safe work procedures for the sampling. At no time prior to the incident had Mr Moore seen, or been provided with, any safe work method documents from Fuchs for sampling. No risk assessment was conducted by Centennial Angus Place in respect of the operation of the Pump Station. It appears this was because a view was taken that the new Pump Station was, other than the crawler tracks, sufficiently similar to the previously used pump station to not require a fresh risk assessment. This view failed to recognise that it was a different pump station with inter alia different sample points. The Pump Station had larger capacity pumps to those of its predecessor. The pump unloader system was also different. With the installation of the Pump Station, an entirely new monorail system was installed. Previously the hydraulic supply was delivered from a pump station located close to the longwall face. The new system allowed the Pump Station to be located farther away from the longwall face. The hydraulic supply from the Pump Station was now delivered by means of hoses mounted on a monorail. Fuchs did not enquire as to whether Centennial Angus Place had conducted an adequate risk assessment in respect of the operation of the Pump Station. The Contract required Fuchs to comply with Centennial Coal's "Standard Contractor's Site Regulations" contained in Annexure A to the Contract. Those Site Regulations required Fuchs inter alia "prior to commencing site works" to "document the work activities to be employed and the system(s) of the work to be used, including specific details of the safety precautions to be adopted to minimise the risk of injury or damage" and "conduct a risk review on site involving the Contractor and their appropriate employees who are going to undertake the site works to ensure that as far as possible all safety risks have been identified, appropriate safety precautions have been developed and the Contractor and their employees understand the risks and safety precautions (Risk Review)". The Clause also required Fuchs to provide to Centennial Coal a "formal copy of the Risk Review, together with any supporting documentation". That Risk Review process "would be expected to take not less than one hour and not more than two days". The Contract also required Fuchs to conduct regular site inspections to identify risks. Fuchs' Health and Safety Policy stated under the heading "Risk Assessments" that such assessments were to be "completed on annual basis or for new procedures, plant or equipment". Fuchs did have a risk assessment for the job of collecting emulsion samples from a similar RMI pump station at a different colliery, namely Mandalong Colliery. It identified as a "hazard" collecting samples under high pressure. It set out as the 'control measure' isolating energy sources and dissipating stored energy before removing any plug or hose. This was not the usual procedure at Angus Place Colliery. Kevin Hansen did not isolate the machinery at Angus Place Colliery, nor did he have any authority to do so. Fuchs also had a safety management plan for Mandalong Colliery for the purpose of "Collecting oil samples from Mine site equipment." This document also instructed the worker to isolate and test equipment before taking a sample. The sampling at Mandalong Colliery was not conducted by Mr Hansen. It is not clear whether Mr Hansen ever saw that material. In any event the RMI pump station at the Mandalong Colliery was not identical to the Pump Station at the Angus Place Colliery. Fuchs had a generic Safety Management Plan for "Collecting oil samples from Mine site equipment". This document was dated 17 January 2006 and was in almost identical terms as the Mandalong document with the same title. Also in almost identical terms to the Fuchs Risk Assessment document for Mandalong Colliery, was a generic Fuchs Risk Assessment for "Collecting Longwall emulsion samples from Longwall supports". The documents were not applicable to Mr Hansen's tasks at the Angus Place Colliery because the documents specified isolation should be conducted and Mr Hansen did not have the authority nor was he expected to isolate equipment at Angus Place Colliery. Further, the document did not instruct or inform the user as to how to identify the sample points. Fuchs has not been able to produce any document recording the risks and risk controls for the work that Mr Hansen was doing at Angus Place Colliery. Minutes of a meeting held on 5 May 2006 at Lithgow between Mr Hansen and another Fuchs employee, Mr Craig Roberts, recorded that Mr Hansen reported on various matters relating to the work he was doing. Matters that Mr Hansen reported in respect of various collieries, including Angus Place Colliery, appear under headings which are the names of each of the collieries. At the end of the document under the heading "Other Matters" it records: "Kevin advised that he has completed a "Task Analysis" (sic) for all sampling so to ensure a safe working environment and compliance to mine site regulations". Mr Hansen did not provide Mr Roberts with any copy of such a task analysis. The records do not identify if this 'task analysis' was generic or one specific to the Pump Station. Mr Roberts did not ask to see the 'task analysis' and never saw it. Fuchs has not been able to find the task analysis. Fuchs did not have a system to check that risk assessments were being completed and were appropriate. Fuchs did not ensure that there was a safe work procedure ("SWP") providing the specific method by which Mr Hansen would do the sampling work from the Pump Station in a safe manner. Fuchs did not have a document which identified the specific sample points and specified the procedure to be used to take samples at each of those points. There was no document which required Mr Hansen to not take any sample from a fitting under pressure without first removing that pressure. There was no document which made clear that samples were not to be taken from any point other than an identified safe sample point, including a point where a staple would need to be removed in order to obtain the fluid. Further, Fuchs had no documented procedure requiring Mr Hansen to conduct the tasks in a particular way, which would have limited the risk that he would depart from an established safe procedure. Mr Hansen had identified occupational health and safety as an area in which he may need additional training in January 2006 in his performance review for 2005/2006. Centennial Angus Place was responsible for the operations within the mine and had in place a number of standard work procedures. One standard work procedure was entitled; "Oil Sample from Face Chocks", "Sampling Solcenic Fluid from Hydraulic Control Panel" and "Sampling Solcenic Fluid from Storage Tanks". There is no evidence that these standard work procedures were provided to Mr Hansen. The standard work procedures provided by Centennial Angus Place did not apply to each point from which Mr Hansen was obtaining a sample; specifically there was no standard work procedure applicable to the return line, diluent water, and mixer samples. The procedure for taking a sample from the storage tanks was written in approximately 1996 for the previous pump station operated by Centennial Angus Place. The procedure to sample from the longwall chocks was not applicable to taking samples from the Pump Station and did not address hydraulic isolation, nor did it address verification that any pressure in the hose had dissipated before the hose was removed. A risk assessment completed by Centennial Angus Place after the incident shows a high risk of fatality from an uncontrolled release of pressurised fluid where staple lock fittings are released by human error. It identified the importance of having a safe work procedure and appropriate training and a check sheet.

[27]

g. The Pump Station was connected with staple lock fittings that when removed would suddenly release pressure, rather than fittings that would gradually release fluid while being opened. 13 Mr Hansen was considered to be able to work 'unaccompanied', according to his induction at level 3 at Angus Place Colliery. In relation to the provision of supervision at Angus Place, it was the case that: The Longwall Superintendent for Centennial Angus Place, Mr Neil Moore, was responsible for the overall supervision of the longwall. In that role he had input into the planning and supervision of mechanical engineering activities, including the development of safe work procedures and instructions. The Longwall Superintendent reported to the Mine Manager. To conduct the sampling at the Angus Place Colliery, Mr Hansen would contact the Longwall Superintendent each month and arrange a time to attend the mine. The Longwall Superintendent met with Mr Hansen and Craig Roberts from Fuchs on an as needs basis to discuss particular issues regarding the hydraulic fluid in the longwall system. The Longwall Superintendent could not recall seeing Mr Hansen conduct sampling at the longwall. The usual procedure at Angus Place Colliery was for an oil sampler to be accompanied by the fitter of the relevant crew from the surface to the underground work area. However in the case of Mr Hansen, Centennial Angus Place permitted him to work unaccompanied because of the length of time he had been attending the mine. The afternoon shift maintenance crew leader, Mr John Sheehan had accompanied Mr Hansen once to the Pump Station to take samples. On that occasion Mr Sheehan saw Mr Hansen remove staples to obtain samples, including a staple from the low pressure side of a valve on the system pressure drain hydraulic line leading to the Incident Fitting. Mr Sheehan did not report that Mr Hansen's actions were inappropriate. Mr Sheehan was not able to provide adequate supervision because he had not been trained in relevant procedures. Nor had he seen documents or safe work procedures relating to obtaining samples from the Pump Station. Mr Sheehan had attended training on the basic layout of the machine and the location of the isolation taps, he could not recall if the training had included sample points from the Pump Station. 14 Mr Knight, in his affidavit, acknowledged that the defendant had placed too much reliance on its customer's systems of occupational health and safety:

[34]

It cannot be assumed that because a worker, even an experienced one, has received extensive training and instruction in relation to safety procedures that such training and instruction cancels out any possibility that he that he or she will not place themselves at risk in relation to a dangerous piece of machinery that is not guarded to the maximum degree. Workers may act foolishly, as demonstrated in cases such as WorkCover v TRW Steering & Suspension Australia Ltd [2001] NSWIRComm 52 at [13] and Inspector Woodington v Thiess Services Pty Limited [2004] NSWIRComm 20 at [70]. That is why the obligations on an employer under the Act require that employer to actively search out and, where it is at all possible, eliminate any risk to health and safety. 3. There was a failure to identify the risk by having an adequate risk assessment : The defendant had a risk assessment, but it was conducted for a different pump station at a different colliery, Mandalong, which had different sample points. There was no evidence that Mr Hansen had seen that document. Most importantly, it was inapplicable because it stated that before taking a sample the energy source should be isolated and stored energy dissipated, but this was not possible in respect of the Angus Place colliery. The incapacity to isolate meant a significant risk arose which was not considered by the generic risk assessment…. 4. The risk was a risk of serious injury : Although the damage or injury caused by a breach does not of itself dictate the seriousness of the offence, a breach where there was every prospect of serious consequences may be assessed on a different basis from a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk. Section 21A(g) of the Crimes (Sentencing Procedure) Act 1999 (NSW) states that an aggravating factor in sentencing is that the "injury, emotional harm, loss or damage caused by the offence was substantial" . Section 21A(ib) states a further aggravating factor is that " the offence involved a grave risk of death to another person or persons ". 5. There were simple and straightforward remedial steps that were available that could have avoided the accident : A system that: a) provided clear instruction as to the location of sample points; and b) prohibited opening any fittings held by a staple, would have gone a long way to removing the risk of a mistake. Such a system has now been introduced. Defendant's submissions

[67]

The obligations of a labour hire company under the OH&S Act have been considered on a number of previous occasions by this Commission and its predecessors. The judgment of Hungerford J in WorkCover Authority of New South Wales (Inspector Ankucic) v Drake Personnel Ltd t/as Drake Industrial (No 1) (1997) 89 IR 374 concerned a prior prosecution of the appellant. That prosecution arose from an incident in which an employee of the appellant, Mr Douglas, sustained an injury whilst operating a woodworking machine at the premises of another company, Warman International Ltd. The appellant pleaded guilty in that case and was fined a total of $25,000. Considering the question of penalty, his Honour commented (at 382): The failure here to ensure the safety of Mr Douglas arose in a situation where he was directed by his employer, the defendant, to perform work for a third party, Warman, at that third party's premises. In such a situation, my view is that an employer has a special responsibility to ensure the health, safety and welfare of its employees at the other workplace for no reason other than that that workplace is removed from the employer's direct management and control and would usually be at a location foreign, or at least unfamiliar, to the employees concerned. The evidence established that the defendant did not satisfactorily attend to this aspect and it was not until Mr Davey was engaged that specially designed safety policies and procedures were implemented. But that was in July 1997, at least two years after the present offences were committed; Mr Douglas thereby suffered injury resulting in absence from employment for a period of at least two months and with a permanent deficit in the use of his right hand. It is no answer, in my view, in reduction of penalty otherwise considered appropriate for the defendant to plead reliance on Warman as the client to take appropriate steps to ensure safety in the workplace for all persons engaged at its premises. True it may be that Warman itself may have offended against the Occupational Health and Safety Act , but that does not, it seems to me, lessen the seriousness of the offences committed here by the defendant as the employer. It is that feature of this case which gives to the assessment of penalty such a degree of importance as will encourage employers in a business similar to that of the defendant to implement appropriate steps to ensure the safety of their employees whose labour is hired to third parties and at the same time to deter employers for failing to take such steps. See also WorkCover Authority of New South Wales (Inspector Dubois) v Industry Staffing Services Pty Ltd t/as Action Workforce (1999) 89 IR 430. The observations of Hungerford J set out above were made in the context of determining the appropriate penalty to be imposed following a plea of guilty. However, we consider that they are equally applicable when considering the liability of a labour hire company under the OH&S Act. A labour hire company cannot escape liability merely because the client to whom an employee is hired out is also under a duty to ensure that persons working at their workplace are not exposed to risks to their health and safety or because of some alleged implied obligation to inform the labour hire company of the work to be performed. In our view, a labour hire company is required by the OH&S Act to take positive steps to ensure that the premises to which its employees are sent to work do not present risks to health and safety. This obligation would, in appropriate circumstances, require it to ensure that its employees are not instructed to, and do not, carry out work in a manner which is unsafe.

[74]

The control measures identified by the Defendant for the risk of being struck by high pressure fluid included the isolation of the plant and evacuation of any residual pressure that had built up, before the taking of any sample. While this control may at first appear to be a simple and straightforward measure, the level of control over the pump station available to the Defendant and the practicalities associated with longwall mining should be taken into account to obtain a more accurate assessment of the not insignificant difficulties with such a measure. 34 The experience and qualifications of Mr Hansen were claimed to be a mitigating factor in the prosecution of Centennial Coal and Centennial Angus Place: Morrison v Centennial Coal. At [49]-[50] the Court stated: [49] It is, indeed, difficult to understand how Mr Hansen came to remove the incident fitting. In the circumstances, one would not have expected an experienced person such as Mr Hansen to make such a tragic mistake. Protective measures against harm to persons in the workplace, however, cannot be based solely on an assessment of the likelihood or otherwise of whether a person will make a mistake or misjudgement. The question the Court must ask itself is that where there is a risk to health and safety present, was it reasonably foreseeable that a person might be exposed to that risk and, if so, did the employer do all that was reasonably practicable to avoid exposure to the risk? The test is to be applied having regard to the normal human frailties people may exhibit at work: that individuals, even highly skilled and experienced personnel, might become careless, they might be pre-occupied, they may act inadvertently, they may seek shortcuts to escape the routine or mundaneness of a job. [50] In the present case, it was not obvious that Mr Hansen might remove a staple holding in place a fitting under high pressure and thereby expose himself to the risk of being killed. It follows that the defendants may be regarded as less culpable than if the risk was obvious. However, I am of the view it was reasonably foreseeable that in the absence of adequate instruction, training and supervision, a sufficiently rigorous safe system of work (including a safe work method statement being provided to Mr Hansen), a dedicated, labelled point for sampling emulsion from the bulk tank and auditing to ensure the correct sampling point was being used, a person in the position of Mr Hansen who, unaccompanied, was regularly taking samples of hydraulic fluid from machinery that contained the fluid, which was under such pressure that its unplanned release could cause death, might become exposed to a risk to his health and safety. 35 I take the same view in assessing the culpability of Fuchs in the context of foreseeability.

[75]

36 It is well settled that any injury caused by a breach will not, of itself, reflect the seriousness of the breach. It may, however, be indicative of the seriousness of the risk cause by the defendant's failures. The prosecutor submitted that 'a breach where there was every prospect of serious consequences may be assessed on a different basis from a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk. (Section 21A(g) of the Crimes (Sentencing Procedure) Act 1999 states that an aggravating factor in sentencing is that the 'injury, emotional harm, loss or damage caused by the offence was substantial'). Section 21A(ib) provides that a further aggravating factor is that 'the offence involved a grave risk of death to another person or persons'. See also Maddaford v CSR Ltd [2004] NSWIRComm 337 at [17]-[18]; Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [94] and [95]; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 at 428; Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]; Inspector Mayo-Ramsay (WorkCover Authority of NSW) v The Crown in the Right of the State of New South Wales (NSW Fire Brigades) (No 2) [2007] NSWIRComm 168 at [34]; Inspector Legge v Intercast & Forge Pty Ltd [2006] NSWIRComm 182; and Inspector Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138; (2007) 164 IR 198. 37 The prosecution directed the Court to Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 204, where Wright J, President said: … [A]lthough the result of the offence does not necessarily reflect the nature and quality in a case such as the present where a fatal injury had occurred, that is a factor to be taken into account and is often, of itself, reflective of an offence the nature and quality of which is serious. 38 The consequence of fatal injuries to Mr Hansen is a manifestation of a high-end risk caused by the defendant's failures.

[88]

47 The prosecution referred to the authority of Capral at [72]-[80] in emphasising the importance of general and specific deterrence in the role of sentencing. There is no need for the Court to revisit the principles expounded in Capral, other than to reiterate the requirement of this Court to consider both general and specific deterrence in the process of sentencing. In highlighting the issue of general deterrence, the prosecutor submitted the present case underlined the dangers associated with working with hydraulic equipment under pressure. In addition, the circumstances before the Court emphasised the obligation for employers to provide a safe system that is not reliant on the experience of an employee, nor reliant on the safety systems adopted by clients. The defendant agreed that general and specific deterrence were relevant considerations in this case. 48 As the prosecutor correctly pointed out, this is a case that highlights the serious consequences that potentially flow from an employer's dependence on a client's safe work practices, or lack thereof. It is further a tragic reminder for the industry generally of the inherent dangers associated with pressurised hydraulic equipment. For these reasons, general deterrence will form a significant basis in sentencing the defendant. 49 Whilst acknowledging the need to apply specific deterrence in sentencing, the defendant submitted that: [T]he Court will be satisfied that the significant steps taken after the incident by the Defendant are such as to control the risks associated with pressurised fluids. However, it is accepted that the Defendant's operations in the mining field continue and that the risk that arose in the present matter is an ongoing risk in the mining industry where longwall operations are carried out. 50 The implementation of substantial remedial measures reflect the defendant's commitment to avoid a recurrence of the incident that led to the charge against it. However, it does not eliminate entirely the occupational health and safety risks associated with continuing to run what is generally regarded as the dangerous business of underground mining. I note the Full Bench's comments in this respect in Capral:

[96]

[41] The indication by the defendants that they were prepared to enter a plea subject to amendments to the particulars and such amendments were subsequently made, suggests that the defendants should receive the benefit of a substantial discount. However, the defendants' objections to the particulars were not entirely resolved until early August and after the matter had been set down for a two day hearing over contested particulars. One of the particulars to which the defendants objected was that alleging there had been no risk assessment. That was amended to 'no adequate risk assessment'. In my view that was a significant amendment, having the effect of mitigating the objective seriousness of the offences in this case. [42] Having regard to all of the circumstances, I consider that the discount for the utilitarian value of the guilty pleas should be at the high end of the scale. 57 The defendant provided to the Court details of the original application for order, filed in the Court on 23 July 2008, together with a document outlining the differences between the original application and amended application. The defendant pleaded guilty to a charge in the amended application for order, filed in the Court on 3 August 2009. According to registry's record of proceedings, this matter was before the Court for directions and/or plea seven times before a plea was entered. Given the lapse of some 12 months, one may assume there was a considerable amount of time and resources expended by the prosecutor, although the prosecutor did not submit anything in this respect. Having the benefit of being able to compare the applications, I accept that the amendments were not insignificant and that the changes to the order could potentially affect the objective seriousness of the offence. The defendant was also faced with an extensive matrix of evidentiary issues. Considering the timing of the plea and factual circumstances of these proceedings, I will apply a discount for early plea in the high range. Prior record, good corporate citizenship & co-operation with prosecuting authority

[99]

[35] The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties. 60 It is well settled that the antecedent criminal history of a defendant may be relevant to the determination of an appropriate sentence, provided it does not result in a penalty that is otherwise disproportionate to the objective seriousness of the offence. The issue was considered in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464; Workcover Authority of New South Wales (Inspector Stobo) v State Rail Authority of New South Wales [2002] NSWIRComm 72; (2002) 115 IR 130; WorkCover Authority of New South Wales (Inspector Ian Batty) v Graincorp Operations Ltd [2001] NSWIRComm 127; and Inspector Mayo-Ramsay v Rail Infrastructure Corporation [2002] NSWIRComm 217. 61 This Court will take into account the period of time a defendant has been operating in proportion to its record, a factor which is often linked with the concept of 'good corporate citizen': see for example WorkCover Authority of NSW (Inspector Sequeira) v Foti's International Fireworks (Displays) Pty Limited [2003] NSWIRComm 471; Inspector Swadling v Empire Talkies Pty Ltd [2003] NSWIRComm 191; Inspector Przibilla v Hyne & Son Pty Limited [2004] NSWIRComm 384; and Inpector Amanda Templeton v Pirelli Cables Australia Limited [2003] NSWIRComm 177. The defendant adduced evidence of its sponsorship of a study undertaken through the Australian Coal Association Research Program, the objective of which was to determine whether different hydraulic fluids have different effects on tissue damage in the event of a high pressure injection injury. The study aimed to provide information that will improve injury management in addition to supporting findings as to safer alternative fluids. 62 The defendant relied on Haynes v CI & D Manufacturing Pty Ltd in submitting that the nature of its operation be taken into account in assessing its corporate character. The Full Bench stated in that case:

[103]

64 The defendant provided evidence to the Court of its support given to Mr Hansen's family following his death. Such assistance was as follows: a. the Managing Director and Deputy Managing Director visited Mrs Hansen on the evening of 26 July 2006 and Mr Knight did so again on 28 July 2008 to express their personal and corporate condolences, offer support and assistance in any way needed; b. payment of funeral and wake expenses; c. provision of counselling to Mr Hansen's family; d. wages for August 2006 and bonus paid to Mrs Hansen, and the defendant facilitated the payment of outstanding annual and long service leave entitlements to Mrs Hansen; e. assistance to the family in liaising and organising the payment of workers compensation, benefits under the death and disability insurance and superannuation fund; f. the continuing provision of a company-owned computer and payment of internet access for the benefit of the family; g. collection amongst Fuch's staff each Christmas for the provision of a cash and hamper gift to the Hansen family; h. the defendant's Christmas function in 2006 was held at the Newcastle Harness Racing Club, and Fuch's sponsored a race in Mr Hansen's name. Several of Mr Hansen's family members attended the event; and i. continued contact with Mrs Hansen since July 2006 to offer assistance as required. 65 Mr Knight deposed in his affidavit that the 'directors of Fuchs feel genuine remorse at Kevin's death'. The prosecutor submitted that the remorse expressed by the defendant should, indeed, be considered as a subjective factor in the Court's assessment of the penalty. The provision of assistance to the victim's family is a factor that may contribute to the genuine expression of remorse and contrition: Inspector Patton v Western Freight Management Pty Ltd (No 2) [2009] NSWIRComm 124 at [78]. The worthy tangible and intangible expressions of remorse and contrition by the defendant are important subjective considerations. The penalty will be fixed having regard to these matters.

[125]

Safety training has been increased since 2006 to include annual manual handling training and forklift refresher training, compulsory Defensive Driver Training for all staff who are required to drive a company vehicle and toolbox talks throughout 2007 on a range of topics throughout the Operational Divisions. The topics for toolbox talks cover several safety issues, and involve an interactive style of meeting, including of viewing of DVDs and question and group work time. In 2009 the Fuchs Senior Management Team decided to expand the DVD Training to all divisions, including office personnel, in order to further improve general safety awareness and the safety culture. (x) The following audits have been implemented and / or improved by the defendant : · A Health and Safety System Audit Checklist was introduced in 2009. It measures the company's performance in its OHS system with items such as minutes of OHS Meetings being displayed on noticeboards of sites, ensuring that fire extinguisher checks have been completed, ensuring previous audit actions have been followed up, and ensuring incident/injury investigation actions have been completed. · General Housekeeping/OH&S Hazard Audit - Manager and Operator audits have been further developed since 2006 and now include both a manager's assessment and an operator's assessment. · Safety and Housekeeping Audit - Melbourne and Newcastle Laboratory audit is similar to the one referred to in the last paragraph, however it applies and relates to each laboratory. The audits are allocated to a different staff member each month for completion. · Warehouse Observation Checklist Audit/Checklist is completed on a monthly basis for each Fuchs Warehouse. · Monthly Racking Audit is a map of all storage racks for products throughout the company and must be audited for damage or bows on a monthly basis. All audits on completion are sent to the area/divisional manager and then to the Human Resources Manager and Quality and Environmental Coordinator. These are placed on the intranet for all staff to access. They are reviewed at OHS Committee Meetings. (xi) Incidents and Accidents

[132]

Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality. That principle was referred to by Mason J in Lowe v The Queen (at 610) as follows: Just as consistency in punishment - a reflection of the notion of equal justice - is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under the law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice. It is for this reason that the avoidance and elimination of unjustifiable discrepancy in sentencing is a matter of abiding importance to the administration of justice and to the community. While the offences with which we are dealing under the O H & S Act do not involve the notion of co-offenders, the fact is that the same circumstances have given rise to prosecutions for offences under ss 15 and 16 of the O H & S Act of the direct employer, Drake Personnel Ltd t/as Drake Industrial which supplied the labour involved, and the defendant here who utilised that labour in relevant circumstances. While those defendants have been found guilty of different offences, nevertheless the factual circumstances giving rise to the charges justify an approach to sentencing which shows consistency and not disparity in punishment in the same way as discussed by Mason J in Lowe . 70 The Court addressed the question of the relative culpability of the three defendants in Morrison v Centennial Coal at [92]-[96]. At [93] the Court found as follows: It is also necessary to consider the relative culpability of Mr Hansen's employer and in that respect it is accepted that both defendants are less culpable than Fuchs: · Fuchs undertook the sampling pursuant to the contract with Centennial Coal and, to that end, provided an expert sampler, Mr Hansen, and the laboratory facilities to analyse the samples;

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