Orr v LD Operations Pty Limited

District Court of NSW|2019-11-26

Solicitors: Lander & Rogers (Prosecutor) HWL Ebsworth (Defendant) File Number(s): 2018/23691

Judgment

LD Operations Pty Limited (the offender) has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (NSW) (the Act) it failed to comply with that duty and thereby exposed Mr Benjamin Pedersen to a risk of death or serious injury contrary to s 32 of the Act.
The maximum penalty for the offence is a fine of $1,500,000.

The offender's evidence

The offender tendered the affidavit of Mr Peter Ross affirmed on 27 October 2019. He has been the Managing Director of the offender since 2005.
Mr Ross deposed that both he and the offender were deeply remorseful for the incident in which Mr Pedersen was injured. The offender accepted responsibility for Mr Pedersen being exposed to risks to his health and safety and accepted that it had failed to exercise due diligence to ensure compliance with obligations under the Act. The offender offered an unqualified apology for its breach of the Act and for exposing Mr Pedersen to a risk to his health and safety.
Mr Ross deposed to the background to, and development of, the Link Road Project. The 2015 WRAC was created in preparation for the Link Road Project.
The affidavit of Mr Ross gave details about the offender's safety system prior to the incident, the key documents in that system, the employment of experienced workers, the inductions conducted, the training of workers, personal protective equipment, Mr Ross's own personal safety message to workers, the response of the offender to underground risks, industry practice in reporting damage and the broader safety system adopted by the offender.
Mr Ross said that there were at least 100,000 W-straps within the Mannering Colliery. All of the W-straps were in place before the offender became involved with the mine and some had been in place since the 1970s. He had received no reports or information concerning any vehicle striking the W-straps. Mr Ross acknowledged that there was pre-existing damage to the W-straps but that the offender did not identify this "as a major hazard in need of immediate rectification". He regarded the possibility of a W-strap actually breaking to be extremely remote.
Mr Ross was personally aware of undulations and uneven gradients in the road floors in the colliery. The offender did not require LakeCoal to conduct an audit of those roadways during the transitional period. Mr Ross said that Mine Deputies regularly travelled along the roads in the mine and had never identified the specific safety risk to him.
Mr Ross gave evidence regarding the Risk Assessment performed before introducing vehicle SMV-003. The offender purchased this vehicle and had it modified so as to reduce its height to 1800mm. However, Mr Ross acknowledged that the consideration given to SMV-003 did not extend to thinking about the length of the vehicle, and in particular the distance from the rear axle to the rear of the vehicle. The offender failed to take into account the fact that if SMV-003 was driven along an undulating road, the rear of the vehicle, being some distance behind the rear axle, could strike the roof of the roadway, including any infrastructure on the roof such as a W-strap. The failure to take this matter into account was acknowledged by Mr Ross to be a failure by the offender to take steps to prevent workers from operating SMV-003 on roads where there was insufficient operational roof clearance. He said that this was not intended or known at the time of the incident.
Mr Ross gave evidence that the offender assisted the regulator with its enquiries and its investigation into the incident. The offender updated its policies and training as a result of the learned from the incident. His affidavit concluded by giving evidence concerning the community and industry involvement of the offender.

Foreseen or Foreseeable?

A key difference between the position of the prosecutor and the position of the offender on the sentence hearing was whether or not the offender had actually foreseen the pleaded risk. As previously recited, the risk pleaded in par 29 of the Amended Summons was the risk of workers suffering serious injury or death whilst driving along underground roadways as a result of being struck by a W-strap that had been damaged and had partially fallen down into the roadway space.
The prosecutor pointed to s 23 of the 2015 WRAC which dealt with "Roadway Dimensions". Section 23.1 specifically dealt with "Roadway Dimensions causing personnel injury". Proposed controls in relation to that potential hazard were: "Roads and other vehicle operating areas PMHMP to address activity/potential hazard. Conduct roadway height audit of all pipes, HT etc & set barricades as required to height of current fleet. Develop roadway inspection programme and TARP."
The prosecutor submitted that this section of the 2015 WRAC meant that the offender actually foresaw the risk which came home. For the defendant, it was submitted that the particular risk pleaded in the Amended Summons, involving damage resulting in a W-strap falling down into the roadway space, was not identified in the 2015 WRAC. However, senior counsel for the defendant readily acknowledged, as did Mr Ross in his evidence, that the defendant should have foreseen that risk. The submission was made that, when assessing objective seriousness, there was less culpability in an offender if it should have foreseen, but had not actually foreseen, the risk.
The evidence of Mr Ross was that there were approximately 100,000 W-straps in the Mannering Colliery. Many, if not most of them, had been there for decades. The photographs tendered by the prosecutor show that there was damage to other W-straps in the vicinity of the incident, obviously caused by contact made between vehicles and infrastructure. While Mr Ross said that no report had been made to him of a damaged W-strap causing a risk, there was no evidence presented by the prosecutor that there had been any earlier incident involving a W-strap becoming so damaged that it fractured and protruded into the roadway space. Having regard to the fact that there were 100,000 W-straps, and that transport vehicles were moving through the mine on a regular basis, even during the transitional phrase, I conclude that this was a unique, but entirely foreseeable, event and risk.
I accept the submission made by senior counsel for the offender that the offender had not in fact foreseen the pleaded risk, and I accept the further submission that it should have foreseen the pleaded risk. The plea of guilty reflects this.

Consideration

I have had regard to the objects in s 3 of the Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW).

Objective seriousness of the offence

The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 at [15].
The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R [1988] HCA 67; (1988) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] NSWSC 432 at [61].
The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.
The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.
The Court of Criminal Appeal has recently examined the sentencing process with regard to the Act in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96. His Honour Justice Basten at par 34, under the heading "Assessment of Risk" said: "The sentencing judge commenced his consideration with the proposition that 'greater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely'. However the truth of that proposition depends upon other considerations including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk, and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors."
Further at par 42 his Honour continued: "The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step‑by‑step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."
At par 53 his Honour dealt with the proper approach to considering the objective seriousness of offences under the Act, saying: "It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken."
My findings about the offender's level of culpability are based upon the following: 1. The pleaded risk of a W-strap fracturing and intruding into the roadway area was foreseeable. However, given that there were 100,000 W-straps, most of which had been in place for decades, and there was no evidence of any prior such incident, the particular risk was not actually foreseen by the offender. 2. Further, given these matters, the likelihood of the risk occurring was not high. However, the photographs of other damaged W-straps lead to the conclusion that because of the continuing unreported contacts between vehicles and roof infrastructure, it was probably only a matter of time before a W-strap fractured and intruded into the roadway space. 3. The 2015 WRAC identified a potential hazard of "Roadway Dimensions causing personnel injury". Persons subject to obligations under the Act are required to take a proactive approach to the assessment of risks and hazards. The offender did not go further than the anodyne statement in the 2015 WRAC that the roadway dimensions could cause "personnel injury". It should have taken a proactive approach and thought through the potential ways in which such injury might occur. Given the damaged state of the W-straps, and the continuing damage caused to them, the offender should have foreseen that a strap might fracture and intrude into the roadway space. 4. The potential consequences of the risk were very serious. It was only a matter of chance that Mr Pedersen did not suffer death or an even more serious injury. 5. There were steps available to eliminate or minimise the risk. These steps were identified in the 2014 WRAC and the 2015 WRAC. 6. There was little burden or inconvenience in implementing those steps. Given the scale of operations at the Mannering Colliery, the cost of implementing the steps was relatively minimal. Suitable steps were taken by the offender after the incident and there was no suggestion that they were onerous. 7. Mr Pedersen was a direct employee of the offender. The failures of the offender, both in relation to the systems charge and the training charge, resulted in the offender putting its employee in harm's way. 8. While a risk of death or serious injury is an element of the offence, the extent of the harm suffered by Mr Pedersen is a relevant matter in assessing objective seriousness. He suffered a serious laceration with ongoing scarring and pain. 9. The maximum penalty for the offence is a fine of $1,500,000, which reflects the legislature's view of the seriousness of the offence.
I find that the offender's level of culpability is in the mid range.

Deterrence

The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180].
The penalty must reflect the need for specific deterrence. The offender is still conducting a business. Its operations involve underground coal mining and the continuing engagement of workers.

Aggravating factors

The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999.

Mitigating factors

The offender has no previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999.
The offender is otherwise of good character: s 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. The steps which the offender took after the incident demonstrate this. The offender has been in business for 14 years.
The offender is unlikely to re-offend: s 21A(3)(g) Crimes (Sentencing Procedure) Act 1999.
The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has taken positive steps to guard against the risk of an incident such as this ever happening again. The offender has brought its documentation and its procedures into line with those which, on all the evidence, should have been in place before this accident occurred.
The offender has shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender has provided evidence that it has accepted responsibility for its actions and has acknowledged that the injury to the victim was caused by its actions.
The offender gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. The offender co-operated at all times with the prosecutor and provided all documents requested in a prompt fashion.
The offender entered a plea of guilty: s 21A(3)(k) Crimes (Sentencing Procedure) Act 1999. The court must take into account the fact that the offender has pleaded guilty, when the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) Crimes (Sentencing Procedure) Act 1999.
The proceedings were commenced in this court on 12 March 2018. They came before the court on nine occasions for directions hearings before a plea of not guilty was entered on 13 May 2019. The matter was then set down for a three week hearing commencing on 18 November 2019. The matter came before the court again for three further directions hearings before the court was informed that the parties were trying to reach an agreement in relation to an Amended Summons and a possible guilty plea.
Eventually on 30 September 2019 the offender changed its plea to one of guilty. This was upon the prosecutor obtaining leave to file in court an Amended Summons and an Amended Agreed Statement of Facts. The matter was then stood over for a sentence hearing on 26 November 2019 and the trial dates of 18 November 2019 to 6 December 2019 were vacated.
I have had regard to the written and oral submissions of both parties in relation to the appropriate discount, if any. Most of the directions hearings resulted in an adjournment by consent. While the plea of guilty was entered some considerable time after the proceedings were commenced, it was only entered after appropriate discussions between the parties resulted in amendment of the Summons and the Agreed Statement of Facts. It became clear on 30 September 2019 that the three week hearing due to commence on 18 November 2019 was no longer required. That enabled the court to vacate those dates and allocate them to other matters. While much preparation was no doubt done for a defended hearing, the prosecutor will be compensated by a costs order in his favour for that time and expense. Much work would have been done in the weeks immediately before the trial and that work was no longer required once the plea of guilty was entered. The entry of the plea of guilty approximately seven weeks before the due date for commencement of the trial saved public money on the part of the prosecutor and on the part of the court system.
In those circumstances it is appropriate to give the offender a 15% discount for its early plea.

Parity

LakeCoal was also prosecuted for a breach of its health and safety duties arising under the Act, relating to the same incident in which Mr Pedersen was injured. It was convicted and the sentence was a fine of $180,000 - Orr v LakeCoal Pty Limited (In Liquidation) (No.3) [2019] NSWDC 402.
Where two or more offenders are involved in the same criminal conduct or enterprise the parity principle requires that there should not be such disparity between the sentences imposed so as to give rise to a justifiable sense of grievance. The effect of the application of the principle may vary according to the circumstances of the matter including differences between the charged offences: Green v R [2011] HCA 49; (2011) 244 CLR 462 at [30].
The principle operates in the nature of a "check" required of the sentencing Court: DPP v Gregory [2011] VSCA 145; (2011) 34 VR 1 at [31]. The Court should first determine the appropriate sentence having regard to the objective criminality and the other relevant factors and then consider whether the sentence needs further adjustment because of the parity principle: DPP v Gregory. In Jimmy v The Queen [2010] NSWCCA 60; (2010) 77 NSWLR 540 at [139] Justice Campbell said: "An essential characteristic of the parity principle is that it permits comparison of two individual sentences and alteration of one sentence as a direct result of the comparison with the other sentence."
The court should not use a co-offender's sentence as a starting point and then increase or decrease the sentence by reference to other factors: Jimmy v The Queen at [32]; Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357.
It is appropriate for the court to consider the respective contributions of LakeCoal and the offender. The reason for doing so is not to reduce the culpability of any one party in any proportionate way in an overall penalty, but rather it is a factor that assists in determining the real culpability of a defendant for the offence charged: WorkCover Authority of NSW (Inspector Carmody) v Consolidated Constructions Pty Limited [2001] NSWIR Comm 263; (2001) 109 IR 316 at [46]. The contribution of other entities may in some cases be relevant in mitigation: WorkCover Authority (Inspector Howard) v Baulderstone Hornibrook Pty Limited [2009] NSWIRComm 92; (2009) 186 IR 125 at [241].
I find that the culpability of the offender is very much the same as the culpability of LakeCoal. True it is that LakeCoal was the mine operator and therefore had a direct obligation to ensure safety within the mine. However, the offender was not a provider of labour hire at arm's length from LakeCoal. Both companies were part of the LDO group. At the time of the incident, Mr Ross was also on the board of LakeCoal. Many of the key engineering and supervisory personnel engaged at Mannering Colliery were employees of the offender. Some of those senior personnel created the 2014 WRAC and the 2015 WRAC. Thus employees of the offender were the experts charged with assessing potential hazards and risks and advising how they should be managed.
In addition, Mr Pedersen was a direct employee of the offender, which had the usual high level of obligation of an employer towards its employees.
As submitted by senior counsel for the prosecutor, the offender had contractual obligations under the Umbrella Agreement to comply with work health and safety legislation, to fully and properly train all personnel supplied to LakeCoal, to examine the mine and to make its own assessment of the risks and hazards.
Finally, s 14 of the Act provides that duties under the Act are not transferrable. Section 16 provides that each duty holder must comply with their duty even if another duty holder has the same duty.
However the offender has several mitigating factors, recited above, in its favour. Most of these were not present in the LakeCoal case. I take that into account in considering parity of sentencing.

Capacity to pay a fine

I am required to have regard to s 6 of the Fines Act 1996 (NSW) before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the court that it should exercise its discretion to limit the amount of the fine. The offender's capacity to pay is relevant but not decisive: Mahdi Jahandideh v The Queen [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.
In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said: "First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to 'the means' of the defendant, pursuant to s 6 of the Fines Act 1996."
There was no submission about capacity to pay, so this issue does not arise.

Costs

The parties have agreed to an order that the offender is to pay the prosecutor's costs as agreed or assessed.

Penalty

My orders are: 1. The offender is convicted. 2. The appropriate fine is $160,000 but that will be reduced by 15% to reflect the plea of guilty. 3. Order the offender to pay a fine of $136,000. 4. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 5. Order the offender to pay the prosecutor's costs as agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 December 2019

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