Rodney Morrison v Akula Pty Limited

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J Friday 3 December 2004

RODNEY MORRISON v AKULA PTY LIMITED FORMERLY KNOWN AS RAISEBORE AUSTRALIA PTY LTD (NO 2)

Prosecution under section 17(1)(a) of the Occupational Health and Safety Act 1983 JUDGMENT [2004] NSWIRComm 367

1 In Rodney Morrison v Akula Pty Limited formerly known as RaiseBore Australia Pty Ltd [2004] NSWIRComm 41 the Court dealt with a prosecution of Akula Pty Limited formerly known as RaiseBore Australia Pty Ltd ("the defendant") by Rodney Morrison, Assistant Director of Performance Improvement of the Department of Mineral Resources ("the prosecutor"), under s 17(1)(a) of the Occupational Health and Safety Act 1983.

2 The defendant had pleaded not guilty to a charge that it: being a person who had control of non domestic premises, (Ridgeway Gold Mine, Cadia Rd, Orange) which premises having been made available to persons as a place of work, particularly Mr Nicholas Johannes Hendrick De Bruin, Mr Shane Thomas Mooney and Mr Perry Michael Guise as at 27 May 2000, DID FAIL to ensure that the premises, the means of access to and egress from were safe and without risks to the health of those persons working at that place of work.

3 Particular (n) alleged that: The defendant failed to ensure the premises, the means of access thereto or egress therefrom were without risks to the health of those persons working there in that it: i. Failed to ensure that those persons were not exposed to rocks or material falling from a height of 200 metres upon them. ii. Failed to ensure that an adequate protective cover was provided so as to protect persons from rock or other material falling from a height of up to 200 metres. iii. Failed to ensure that persons were not working in an area where the defendant knew or should have known that because of poor ground quality that there was a susceptibility for rocks or material to fall up to 200 metres in height. 4 The circumstances giving rise to the prosecution were that in 1999 and 2000 the defendant was contracted by Cadia Holdings Pty Limited to drill ventilation shafts at the Ridgeway Goldmine near Orange in New South Wales. The defendant, in turn, contracted with Specialised Mining Services Pty Ltd to provide the services of Nicholas Johannes Hendrick De Bruin as project manager to drill a shaft 207 metres long and about 4.5 metres in diameter identified in contractual documents as vertical riser 3 or VR3/5180. Mr De Bruin was fatally injured on 27 May 2000 whilst carrying out the contract. At the time of the incident two other persons were present; the defendant employed neither. One was slightly injured.

5 In Rodney Morrison v Akula Pty Limited formerly known as RaiseBore Australia Pty Ltd the Court found the defendant guilty of an offence under s 17(1)(a) of the Act in relation to the charge brought, and in relation to a defence pleaded under s 53 of the Act, found it had not been made out.

6 This judgment deals with the question of sentencing and costs. It is necessary to understand in more detail what occurred on 27 May 2000. This information is set out in the earlier judgment as follows: 6 The drilling of the ventilation shaft VR3/5180 (or raise) was carried out by a method referred to as raise drilling or raise boring. This involves the initial drilling from an upper level to a lower level of a pilot hole of some 35 centimetres in diameter. Once this is done a "drill string" extending from the top to the bottom level is put in place and a cutting head or reamer is attached to the end of the drill string at the lower level. Drilling is then carried out by drawing the rotating reamer head upwards along the route established by the pilot hole.

7 The top level (RL 5340) of the ventilation shaft where the drilling rig was located was some 500 metres below the surface. The bottom level was a further 207 metres further down. Directly above the top end of the shaft sat the drilling rig on a bed of concrete sitting on an earth "plug" about four to five metres deep. At the bottom level (RL 5180) the shaft ended in an excavated chamber or gallery, the entrance to which ran off the Mine's main decline running downwards from the surface to the bottom of the Mine and which carried all of the traffic through the Mine. The roof of the chamber and that of the access way or drive into the chamber was secured and regarded as safe. The top of the shaft and the walls of the shaft were not secured and there was an obvious risk of falling rock and material injuring persons working in the chamber and its immediate environs. 8 By 27 May 2000 the drilling of the shaft had been completed and what remained to be done was to disengage the reamer head from the drill string prior to its removal to the surface. Thus, immediately prior to the work being undertaken to remove the reamer head and dismantle it, the situation was that at the end of a 207 metre long drill string was attached a reamer head about 4.5 metres in diameter weighing a number of tonnes located immediately below the 4.5 metre wide shaft and hanging about half a metre above the chamber floor. 9 As it has been noted, Mr De Bruin's company, Specialised Mining Services, had been contracted by the defendant to provide Mr De Bruin as project manager for the drilling operation including demobilisation and removal of the reamer head. The defendant also contracted with Pybar Mining Services Pty Limited for the services of Mr Guise to assist Mr De Bruin. The defendant further contracted with Brandrill Limited for the services of Mr Mooney who was also to assist Mr De Bruin in the capacity of driver/operator of an Elphinstone 2900 loader, known as a "bogger". Both Mr Guise and Mr Mooney were under the direction of Mr De Bruin in his capacity as the defendant's project manager.

7 The earlier judgment noted that there was a procedure laid down by the defendant for removing the reamer head but that Mr De Bruin did not follow the procedure on 27 May 2000. The earlier judgment went on to describe events as follows: 11 On the morning of Saturday 27 May 2000 Messrs De Bruin, Guise and Mooney proceeded into the Mine with Mr Mooney manning the bogger. In order to enter the Mine, personnel were required to leave a tag at the Mine entrance indicating they were inside the Mine. This tag was to be removed on exiting the Mine. The three men descended down the decline to the level where the shaft or raise ended. Chained to the bogger was an Overhead Protection Platform ("OHPP") that was to be used to place over the shaft's opening to guard against "scats and spalling" falling down the shaft and into the chamber whilst work was being carried out on the reamer. It was not designed for protection against rocks falling from up to 200 metres. The OHPP was of metal construction, about five metres square and weighed about five tonnes. It was to be placed in position by the bogger's bucket and held in position by the bogger's hydraulics. The OHPP had a slot in the centre where the drill string fitted.

12 The OHPP was placed in position covered by a number of light vehicle tyres (which proved to be completely inadequate) to absorb the impact of material falling on it. Mr Mooney remained in the cabin of the bogger with his safety belt on and the engine running in order that the hydraulics came into play. Messrs De Bruin and Guise then set about releasing a safety strap that connected the reamer to the drill string. This involved getting under the reamer as it hung suspended about half a metre off the ground and removing two nuts. This task was completed without incident and Mr De Bruin communicated with the raisebore operator to lower the reamer head to the ground. At this stage then the reamer head was resting on the ground directly underneath the shaft and the OHPP was in place over the mouth of the shaft, held there by the bogger's bucket. The reamer had not been pulled to the front of the hole until the drill string was touching the wall of the raise. The only part of the bogger that was underneath the shaft opening was the bucket. A steel prop that was to be used to support the arms of the bogger was not placed in position.

13 At about 12.30 pm Mr De Bruin prepared to use the oxycutting equipment he had brought with him to burn off the burn-out ring from the drill string. Mr De Bruin stepped onto the reamer head directly underneath the OHPP and was about to receive the oxy torch as Mr Guise handed it to him. At that moment there was a loud noise and a fall of rock and material from within the shaft hit the OHPP with great force. It is apparent from the evidence that the protection platform was forced downwards lifting the rear wheels of the bogger clear from the ground. Some rocks penetrated the protection platform and the impact was such that the platform buckled and welds were split. Mr De Bruin sustained serious head and body injuries probably from the combination of rock impact and the crushing effect of the OHPP approaching the reamer head upon which he was standing and where he was found with his head jammed between the cutters of the reamer. A rescue team arrived and in a display of considerable courage retrieved Mr De Bruin from beneath the shaft and placed him in an ambulance. Mr De Bruin, however, died of his injuries 12 days later. Mr Guise sustained some minor injuries as he escaped from near the shaft. Mr Mooney was not injured. 8 The evidence in the sentencing proceedings consisted of a certificate tendered by the prosecutor indicating the defendant had no prior convictions under the Act as well as evidence tendered by the defendant that consisted of a number of testimonials and an affidavit of Mr Rodney Arnold Bertram, managing director of the defendant. Mr Bertram was not required for cross-examination. 9 Mr Bertram had known Mr De Bruin since 1988 when Mr De Bruin was the General Manager of Elura Mine at Cobar, which was part of the North Broken Hill Group. Mr De Bruin appointed Mr Bertram to the position of Group Manager of Raiseboring following the formation of the Pasminco Mining Group to oversee and control activities at the Pasminco Mines at Rosebery in Tasmania, Broken Hill and Cobar in New South Wales. Mr De Bruin eventually retired from a management role in 1992 and thereafter undertook mining activities around Australia using his company, Specialised Mining Services. The projects undertaken by this company included shaft sinking, stripping of shafts that had previously been raisebored and equipping of such shafts to suit mining activities. The defendant company was established by Mr Bertram in 1995 and used Mr De Bruin's services. 10 In assessing the objective seriousness of the offence it is relevant to have regard to the fact that the defendant had established a good reputation as a competent organisation with an appropriate regard to safety. Further, both Mr Bertram and Mr De Bruin possessed a great deal of experience in raiseboring. Mr Bertram said in his affidavit: …Nick was highly respected within the mining industry but was particularly well regarded in the field of shaft excavation, be it by conventional sinking method or by raiseboring. To my knowledge, Nick was the only person from Australia who was ever invited to deliver a Paper at the Institute of Shaft Drilling Technology in the United States of America. This is, to my knowledge, is the premier mining institute in the World. Further, I know that Nick was invited on several occasions to participate in that organisation's activities and was also supportive in the formation of the World Rock Boring Association, which is an international organisation specialising in raiseboring activities. This organisation is based in Canada and was established in 1988 and holds international forums and conferences every two years. I was a foundation board member of this Association. I remained in that position until 2002 as the representative for Australasia. I have delivered a number of Papers to this organisation obviously with the approval of Nick until 1992 and then subsequently by myself as the owner of my own company.

11 Mr Bertram said that he considered Mr De Bruin to be: [T]he most highly qualified person in the raiseboring industry in Australia. He had vast experience, knowledge and was, to my observation, pedantic about safety matters. I know this because I worked for him between 1988 and 1992 and later while he was working for me, he had almost an aggressive approach to safety. I say "aggressive" because if Nick thought that safety was being compromised he would stop the operation irrespective of who he offended until such time the issue was rectified so that safety was not being compromised to any degree.

12 Mr Bertram deposed that: During the years I worked directly for Nick and subsequently to that time, I continued to develop technology and introduce new safety systems to raiseboring in Australia. In fact, since 1988 I have introduced or been associated with every single raiseboring safety system introduced into Australia.

13 Mr Bertram deposed that at the time of the accident Mr De Bruin was having financial difficulties and speculated that he may have been distracted by this and was not "concentrating on the task at hand" when he was fatally injured. It would appear that, indeed, Mr De Bruin was having serious financial problems but whatever may have been Mr De Bruin's state of mind on 27 May 2000 he failed to follow the procedures, some of which he himself had devised, for removing the reamer head. The failures were quite significant and involved a failure to properly install the OHPP (although it is noted that even if it had been properly installed it would have been inadequate for the purpose) and a failure to adopt the primary safety mechanism to move the reamer head so that the drill string was tangential to the raise wall and the reamer head was located under solid or secured ground known as the "brow". Mr Bertram noted in his affidavit: Whilst the secondary safety system of the OHPD would not have been in place, working under the primary protection would still have been far safer than ignoring the primary protection and working under the secondary safety system especially when it was not correctly installed.

14 In other words, if Mr De Bruin was going to rely on what Mr Bertram described as the secondary safety mechanism, i.e., the OHPP (or OHPD as Mr Bertram described it), Mr De Bruin failed to properly install the OHPP. Mr De Bruin did not adopt the alternative procedure, described as the primary safety mechanism, of towing the reamer head from the centre of the shaft so that any person working on it was under solid ground or the "brow". 15 Mr Bertram further deposed: I have previously referred in this document to Nick and myself dramatically improving the safety systems of reamer removal in 1989 when we assumed responsibility for the raiseboring activities of Pasminco Mining. The method of removing a reamer under a loader bucket was prevalent back in 1988 and is the exact method that we declared unsafe. Alternative methods were immediately developed which ensured that operators always worked under the "brow" and not under a loader bucket which was under the open raise. This is why I am at a loss to understand how or why the accident occurred. Nick and I had been through this history and he knew not only the problems with this method but developed the safe system of work that he should have implemented.

16 The defendant had the appropriate procedures in place for the safe removal of the reamer head and was relying on a very experienced contractor, Mr De Bruin, to undertake the work. Indeed, Mr De Bruin devised many of the safety procedures. Inexplicably Mr De Bruin did not follow the procedures but adopted a method he knew to be unsafe.

17 Whilst Mr De Bruin's conduct contributed significantly to the risk that occurred on 27 May 2000 it was also the case that the defendant was aware that the mine owner, Newcrest Mining Limited ("Newcrest"), required that the system to be used to remove the reamer head was the OHPP. The use of the OHPP was not the defendant's preferred method and it would appear that the defendant was aware of Mr De Bruin's view that the OHPP was inadequate and should have been re-engineered to increase its strength. Nevertheless, the defendant did not intervene to insist on its preferred method. In this respect, Mr Bertram seems to have been of the view that whilst he could take issue with the mine manager as to the method to be used to remove the reamer head, ultimately the mine manager's directive had to be followed. That view, of course, is incorrect. If the defendant had a concern that Mr De Bruin and the other workers would be put at risk on 27 May 2000 by adopting the method for removing the reamer head as required by the mine manager, the defendant should have refused to adopt that method.

18 It may have been that Mr Bertram, in not insisting on his preferred method of removing the reamer head, deferred to Mr De Bruin's knowledge and experience. A person who has control of non-domestic premises which have been made available to persons as a place of work must ensure that the premises are safe and without risks to health. The person who has control cannot defer or delegate the responsibility for safety to another.

19 An offence under s 17(1)(a) of the Act will be regarded as more serious than it otherwise might have been if the risk to safety was obvious or reasonably foreseeable and reasonably practicable steps were available to avoid the risks, but these steps were not taken. There is no question that the risk to safety was obvious, indeed, it was the focus of much of the procedure for removing the reamer head. As for the steps available to avoid the risk Mr Bertram indicated in his affidavit that there were alternatives to using the OHPP and he described his preferred method as moving the reamer head under the brow where it could be worked on safely. There is no reason that method could not have been employed other than Newcrest directing that the OHPP be used.

20 The gravity of an injury resulting from a breach of the Act does not of itself dictate the amount of penalty, the maximum in this case being $550,000. However, the occurrence of death or serious injury may manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected: Rodney Morrison v Powercoal Pty Limited [2003] NSWIRComm 416 at [32] and the cases referred to therein. In this case there was, of course, a death signifying, if it were not otherwise starkly apparent, the high degree of seriousness of the risk of rock or material falling from the ventilation shaft.

21 Mr Hodgkinson of senior counsel for the defendant submitted the Court should take into account the role of Newcrest, the mine owner, in relation to what occurred on 27 May 2000. Mr Hodgkinson submitted: Your Honour will have regard to the fact that Newcrest was not prosecuted in this case because if your Honour didn't, then potentially a justifiable sense of grievance in the issuing of penalty, having regard to a number of things: Firstly, Newcrest's involvement in the approval process of the systems. Secondly, Newcrest's undoubted control over the mine, work within the mine and the systems of work to be used within the mine and thirdly, Newcrest's direct involvement with this company in all of its aspects at that particular mine.

22 The Court is required to assess the extent to which the various parties have contributed to the risk and their conduct generally, to identify which party ought bear the greatest level of responsibility: see Workcover Authority of New South Wales (Inspector Farrell) v David Carl Shrader (2002) 112 IR 284 at [61] referred to with approval by the Full Bench in Ridge Consolidated Pty Ltd v Workcover Authority of New South Wales (Inspector Maugher) (2002) 115 IR 78 at [33] and Fernandes Constructions Pty Ltd v Workcover Authority of New South Wales (Inspector Steven Jones) (2002) 124 IR 148 at [48].

23 I find it difficult to avoid the conclusion that there was a level of responsibility that should be sheeted home to the mine owner for what occurred on 27 May 2000. The OHPP that the mine owner directed to be used and which was not the preferred option of the defendant, was seriously inadequate as a measure for protecting persons from a rock fall of up to 200 metres in a 4.5 metre shaft despite the fact that Mr De Bruin failed to properly install the OHPP. The mine owner clearly had control of the mine and access to and egress from the mine, and all areas of the mine: see Rodney Morrison v Akula Pty Limited formerly known as RaiseBore Australia Pty Ltd at [21] where it was stated the evidence established that:

· The Mine Owner's representative conducted regular inspections of the Mine and had the capacity to give mandatory directions in relation to any aspect of the mining operation. · The Mine owner had a policy for the placing of signs and taping off of areas to prohibit unauthorised entry. Permission to enter could be granted by a foreman of Brandrill or a person senior to him including the Mine owner's representatives. · The Mine owner had a responsibility to inspect areas of the Mine and performed this function through its employees and those of Brandrill. · The Mine owner had the responsibility for ensuring a safe environment within the Mine. · The Mine owner directed Brandrill to keep the decline free of vehicles or other objects that could inhibit its use. · The Mine owner had responsibility for supervising the works in the Mine and did that through its employees and Brandrill's employees. · The Mine owner had power to prevent a contractor at any time from undertaking work within the Mine.

24 The mine owner was in a position to impose a safe system of work for the removal of the reamer head and to supervise the removal of the reamer head using the OHPP in order to meet its occupational health and safety obligations to persons working in the mine.

25 On the evidence in this case, which strongly suggests Newcrest was culpable to a significant degree, the defendant should not bear the whole blame for the failure to ensure the premises were safe and without risks to health. I have taken this consideration into account in fixing the penalty.

26 In Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, 99 IR 29 the Full Bench recognised that in the industrial context, it would be rare that a sentencing court need not impose a sentence that includes an element of general deterrence. Mr Hodgkinson submitted: … when one looks at your Honour's actual findings and the involvement of Newcrest in making the premises available, the fact that they weren't prosecuted - these are my words - to load up the element of general deterrence on the basis that you are sending a message to the industry at large would be unfair because it would be to single out RaiseBore when the company itself, Newcrest, was not prosecuted.

27 I do not propose to "load up the element of general deterrence" on the basis that the defendant bears sole responsibility for failing to ensure the safety of persons on 27 May 2000, although the connection between including an element in the penalty for general deterrence and the level of culpability of a defendant vis a vis someone else's culpability, escapes me. The work engaged in by the defendant continues to be carried on by others in the mining industry. This is undoubtedly dangerous work. It is appropriate that I include in the penalty an element for general deterrence.

28 As for specific deterrence, the defendant continues to do raiseboring work but I am satisfied that it is unlikely the defendant will re-offend. The defendant has taken appropriate steps to avoid a re-occurrence of what occurred on 27 May 2000, the death of Mr De Bruin affected Mr Bertram deeply and, apart from this offence, the defendant has an otherwise good safety record in a dangerous industry.

29 There are a number of relevant subjective factors to be taken into account. Firstly, that the defendant cooperated with the investigating authority in its investigation of the matter. Secondly, the defendant expressed genuine remorse for the offence and, as I have noted, it is apparent from his evidence that Mr Bertram was deeply affected by Mr De Bruin's death. Following news of the incident, which Mr Bertram received in Adelaide, he arranged to charter a plane to fly Mr De Bruin's family from Broken Hill and Cobar to Orange where Mr De Bruin was initially taken. Mr De Bruin was then airlifted to Sydney and Mr Bertram arranged transport for the De Bruin family to Sydney and assisted in the accommodation arrangements. Mr De Bruin died on 8 June 2000 and was buried in Broken Hill. Newcrest initially declined to send representatives to the funeral but after Mr Bertram offered to charter two planes to transport Newcrest personnel from Orange to Broken Hill, Newcrest accepted.

30 Other assistance provided by the defendant to the De Bruin family was explained by Mr Bertram as follows: Another major issue that surfaced following Nick's death was that although Nick had produced evidence of his Workers Compensation insurance for Specialised Mining Services as a Mine Contracting Company to the Defendant prior to commencing work, he subsequently changed the nature of the work being performed to his insurer. I was told at the time by Nick (Jnr) that Nick (Snr) had advised his insurers that Specialised Mining Services was a franchisee for Mitre 10 and subsequently required workers compensation insurance as applicable for a retail sales operation. Naturally, when the family contacted the insurers following Nick's death the insurers, upon learning of the manner of his passing, immediately voided any claim from the de Bruin family. This was due to misrepresentation of the work that would be undertaken as stated on the workers compensation policy. This only increased the financial and emotional pressures on the family and business. However, on 22nd October 2004 I received a letter from Abbott Tout Lawyers dated 18th October 2004 claiming reimbursement of workers compensation benefits paid to Nick for the sum of $273,777.40. Currently I am unaware whether or not I have insurance support for this matter. … Fortunately, the Defendant had taken out a contractors workers compensation policy for injury in case it was ever named as a third party to a contractors claim, and even more fortunately that policy had a capital benefit of $200,000. Whilst that benefit was payable to the Defendant I decided that in consideration of the family's financial situation and in particular the fact that workers compensation was being denied as described in item 58, that I would instruct my insurers to forward the $200,000 death benefit direct to the Beneficiaries rather than to Akula Pty Ltd. This distribution to the family was made within three (3) weeks after the claim was made, which was in the immediate aftermath of Nick's death.

31 In his evidence Mr Bertram said that "as a result of the incident in which the Defendant was prosecuted, this has seriously and adversely affected the continuing viability of RaiseBore Australia Pty Limited." Mr Bertram deposed that for an organization that was the "premier raiseboring company in the country" employing approximately 40 personnel at the time of Mr De Bruin death, it was now employing only 21 personnel.

32 In this respect Mr Bertram deposed that: Subsequent to the Defendant company being charged with an offence under the Occupational Health & Safety Act 1983, RaiseBore Australia Pty Limited is now regarded as the third choice raiseboring contractor to carry out works for a Principal. The employees have fallen by natural attrition to only twenty-two (22) due to the lack of contracts able to be achieved by the company in the market place. In fact since September 2003 when the forthcoming trial between Rodney Morrison vs Akula Pty Ltd became industry knowledge, RaiseBore Australia Pty Limited has not been successful in a single new tendered contract. I know from personal knowledge that this matter has been the subject of wide discussion in the mining industry. I know because the extensive contacts that I have in the mining industry have regularly raised the fact of this prosecution with me and enquiring of its progress. This regularly happens when I am at a RaiseBore Australia Pty Limited worksite. For example, I was recently engaged in a tender for work from Western Mining Corporation at Olympic Dam. I was in the tender meeting and one of my competitors asked me in front of all of the principals present "How is Nick's trial going?". I was then asked questions about "Nick's trial" and I had to explain as best I could the circumstances surrounding Nicks incident and the resultant effect on myself and other staff members. Needless to say I did not succeed in obtaining that tender. RaiseBore Australia Pty Limited has survived on renewal and extension of existing contracts with loyal clients and employees who recognise the actual facts surrounding the death of Nick, and more importantly, recognise the expertise and experience retained by the company. This is in contrast with the majority of the industry which appears to take the view that the company is a "risk taker" and that to employ a company of that ilk would tarnish the reputation of the Principal. In fact, Newcrest, for whom my company had installed all but one raise, has now effectively but unofficially "black balled" my company from any of their activities since the trial was held in February 2004. This is despite being awarded the major mine development project at Ridgeway Mine of approximately two (2) years duration with two (2) large diameter raiseboring machines late in year 2000 following Nick's death. This project involved the excavation of seventeen (17) raises, a total length of 2330 metres and complemented the six (6) raises, a total length of 1056 metres excavated prior to the incident involving Nick. There has been a requirement for a raise at Ridgeway for some time with my company being the only company to have a suitable raiseborer available, and rather than use my company for the works, the requirement for the raise has been deferred time and again and is now five (5) months behind schedule. Similarly, at Newcrest's Telfer operation where raiseborers are in acute demand, I have been informed by a Principal Contractor that Newcrest would not allow my Company on site. Discussions with Newcrest mine management on site revealed that this decision had emanated from Perth office and could not be overturned. My enquiries to Perth office personnel all resulted in non committal answers basically advising me to "read between the lines". Additionally, and perhaps most importantly, Newcrest is currently developing the latest gold mining operation in Australia being at Crakow, which is located three (3) hours west of Brisbane. My company has not even been invited to Tender for the works at this site despite the fact of undertaking nearly all of Newcrest's work for many years prior to notification of prosecution. Similarly I understand that some award employees who worked at Ridgeway Mine during the development phase (when my company was undertaking the raiseboring) have requested Newcrest management at Crakow, (the same personnel as managing the contract at Ridgeway) to consider my company for the works. I assume this was due to the unquestionable success of the operation and interaction of personnel whilst the Defendant company was working at Ridgeway.

33 Mr Bertram said that prior to the prosecution of the defendant in this matter he had the opportunity "to sell the Defendant to a major international drilling company, Boart Longyear, for a lucrative sum." However, Mr Bertram said: …as I knew that the Prosecutor was investigating the matter, I did not wish to sell the company until the issue pertaining to Nick had been finalised with the Authorities. The proposed purchaser wished to purchase the Defendant irrespective of whether or not the matter was prosecuted. I did not wish to be seen by my colleagues in the mining industry as having attempted to evade responsibility for this incident. Consequently, I declined to proceed with the sale at that time as naturally I believed that the Defendant would be found innocent of any charges. However, as a result of the decision, the company's value has been seriously and detrimentally affected. There has been a loss of contracts in terms of new work that I have referred to above and my estimate is that company may be worth at the most one-tenth of what Boart Longyear had been prepared to offer. However, it is doubtful whether or not the company is saleable at all as a result of this decision. The more probable option that I am considering at present will be to sell the equipment (if possible) and reluctantly make the employees of RaiseBore Australia Pty Limited redundant. Unfortunately, it is just not possible for the company to continue in the medium term without new contracts.

34 As to the personal impact of the prosecution on him Mr Bertram deposed: Since this incident, I have lived in fear of one of my employees being injured by not following written procedures with me still being responsible although it is impossible to personally supervise each activity from one end of Australia to the other. This is particularly worrying as I believe that Nick was the best, the most safety conscious, and he still, (on one occasion) ignored the procedures and the rules. The experience I have suffered waiting two years minus one day for the DMR to advise that they intended to prosecute, then nearly another year for the prosecution, and a further nine months or so for the penalty has taken years off my life. I have been considered expert in raiseboring for many years but this knowledge is irrelevant when involved in the legal interpretation of an incident. However, the stress and anxiety of not only the incident but the prosecution have been immense upon my family, myself and my company, RaiseBore Australia Pty Limited. The company's business has been affected in that we have been unable to win new business and if this continues it will threaten the viability of the business. I link this directly to the prosecution and the result for reasons that I have referred to earlier in this Affidavit. I am certain that my pricing has not been the reason that we have not been awarded contracts as in some cases I have priced projects at "cost" to maintain my employees in work. Currently, the company has work for seven (7) people in the field and three (3) in administration whilst we are employing thirteen (13) in the field and seven (7) in administration. I expect that the company will have to be wound up and the equipment sold although I intend to attempt to rebuild for the remainder of this financial year.

35 The subjective factors I have referred to are all relevant and I have decided that I will discount any penalty by 15 per cent for those factors. In particular, I accept that arising out of this prosecution the defendant and its managing director Mr Bertram have already been punished to a considerable degree and that must be taken into account in setting any financial penalty. In so far as the objective considerations are concerned I have had regard to the fact that the defendant was relying on a very skilled and experienced contractor to remove the reamer head, indeed, it is likely there was no more experienced person in Australia to do the work. Mr De Bruin was a safety conscious person who pioneered some of the safety procedures in the dangerous work of sinking shafts. But on 27 May 2000, for reasons that will never be known Mr De Bruin ignored the safety procedures.

36 I have also had regard to what I consider to be the mine owner's contribution to the risk that arose on 27 May 2000 and do not consider it would be a just outcome for the defendant to carry the full weight of any penalty that I impose. Nevertheless, the offence was a serious one given that the defendant had reservations about the use of the OHPP as the primary safety mechanism, knew of Mr De Bruin's concern that the OHPP was not strong enough for the task and was fully aware of the serious consequences of not taking every possible safety precaution. The defendant, who has an absolute liability to ensure safety, nonetheless allowed the work to proceed using the OHPP.

37 I have experienced some difficulty in arriving at an appropriate penalty in this matter. A high range penalty as called for by Mr Scott of counsel for the prosecutor would be, in my opinion, oppressively unfair. Nevertheless, for the reasons I have expressed in this judgment the offence was serious. I have decided that a penalty of $160,000 should be imposed. This is to be discounted by 15 per cent for the objective factors I have identified leaving a fine of $136,000.

38 The Court makes the following orders: 1) A verdict of guilty is entered. 2) The defendant is convicted of the offence as charged. 3) The defendant is fined an amount of $136,000 with a moiety thereof to the prosecutor.

4. The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. _____________________

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