Rodney Morrison v Tecrete Industries Pty Ltd.

PROSECUTOR Mr M Cahill of counsel SOLICITORS PricewaterhouseCooper Legal LEGAL REPRESENTATIVES: DEFENDANT Mr B D Hodgkinson SC SOLICITORS Clayton Utz

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

7 November 2003 Matter No. IRC 2263 2001 Rodney Morrison v Tecrete Industries Pty Ltd. Prosecution pursuant to s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2003] NSWIRComm 371

1 The prosecutor, Mr Rodney Morrison, is Assistant Director of Performance Improvement of the Department of Mineral Resources and having the consent of the Director General of the Department to institute proceedings under the Occupational Health and Safety Act ("the Act"), commenced proceedings against Tecrete Industries Pty Ltd under s 15(1) of the Act in relation to an accident which took place on 20 January 1997 at Dartbrook Colliery.

2 The charge against the defendant was that it had failed to ensure the health, safety and welfare of its employees at work, in particular Raydon Rich (deceased) and Michael Ham. The particulars of the charge were as follows: (a) At all material times, the Defendant supplied specialised underground mining services, including but not limited to the construction of underground seals and ancillary roof support. (b) At all material times, the Defendant contracted to provide its services in the construction of underground seals and ancillary roof support at Dartbrook Colliery. (c) At all material times, the Defendant supplied the services of its employees, Raydon Rich (deceased) and Michael Ham, to work on the construction of underground seals and ancillary roof supports at the Dartbrook Colliery site. (d) On 20 January 1997 Brendan Ryan, an engineer employed by Dartbrook Coal Pty Limited directed Raydon Rich (deceased), and Michael Ham to construct a fibercrib roof support using "palletised" fibercrib blocks, supplied by Pioneer Building Products Pty Limited and known as "60 packs", using an Eimco front-end loader fitted with a forklift attachment. (e) On 20 January 1997, whilst Dean Ling was in the process of positioning a "60 pack" on a fibercrib stack using an Eimco fitted with a forklift attachment, the fibercrib stack collapsed to the ground and Raydon Rich (deceased) sustained fatal injury. (f) The Defendant failed in any and/or all the following:- (i) failed to ensure that the operating procedure for machine stacking "palletised" fibercrib blocks was safe and without risks to their safety and/or health of its employees, in particular Raydon Rich (deceased) and Michael Ham. (ii) failed to ensure that Raydon Rich (deceased) and Michael Ham were trained, properly or at all, in the use and application of the safe working procedure for the use in the machine stacking of "palletised´fibercrib supports. (iii) failed to ensure that the modified pallets were suitable for use with the forklift attachments available for use at the Dartbrook Colliery. (iv) failed to ensure that Raydon Rich (deceased) and Michael Ham were supervised, properly or at all, in the construction of the abovementioned fibercrib stack. (g) As a result of the said failures on 20 January 1997, the fibercrib stack under construction by Raydon Rich (deceased), Michael Ham and Dean Ling collapsed. As a result of that collapse, Raydon Rich sustained fatal injury. (h) This application is brought pursuant to Section 49(4) of the Occupational Health & Safety Act 1983, the Coroner, J. Bailey, Magistrate, having delivered his findings at Glebe on 31 March 1999.

3 Before a plea was entered, legal representatives for the defendant indicated by way of notice of motion there would be a challenge to the jurisdiction of the Court, namely that pursuant to s 48 of the Act there was no effective authority given to commence the proceedings. A similar challenge was mounted by Dartbrook Coal Pty Ltd who was also charged under the Act in relation to this particular incident. In June 2002, the Court upheld the validity of the consent to prosecute and the terms of the prosecution actually pressed against each defendant (see Rodney Morrison v Dartbrook Coal Pty Ltd & Tecrete Industries Pty Ltd (2002) 116 IR 252). Following the determination of that issue the matter was mentioned on two occasions and on the third occasion the present defendant entered a plea of guilty. 4 When the matter resumed to hear the parties on the question of penalty, an extensive Agreed Statement of Facts was tendered. Having regard to the nature of the matter, it is appropriate that the immediately relevant parts of that document be set out: . . . 3. At all material times the Defendant was contracted to supply specialist underground support and ventilation services to Dartbrook Coal Pty Ltd (ACN 007 377 577) (now known as Anglo Coal Dartbrook Management Pty Ltd)(" Dartbrook ") in the operation of the Dartbrook Colliery located at Stair Street, Kayuga in the State of New South Wales. The specialist underground services supplied by the Defendant included the construction of underground ventilation works and ancillary activities, including the construction of ancillary roof support as directed by Dartbrook in accordance with the "Longwall Seal No. 1; Contract Z1010" dated 12 August 1996. 4. At all material times the Defendant employed Raydon Rich (deceased) and Michael Ham as underground labourers to work on the construction of underground ventilation works and ancillary activities, including the construction of ancillary roof support at the Dartbrook Colliery as directed by Dartbrook in accordance with the abovementioned contract. 5. At all material times the Defendant employed Mr Rodney Moylan to supervise the abovementioned contract. 6. At all material times United Mining Services Pty Ltd, trading as United Mining Support Services (" UMSS ") employed Mr Dean Ling to work underground at Dartbrook Colliery as an underground mining support worker. 7. On 20 January 1997 a "fibercrib" roof support was in the process of being erected, underground in the Dartbrook Colliery at Cut Through 18, when the partially constructed fibercrib stack collapsed. 8. The fibercrib roof support was being constructed in accordance with a work procedure developed by Dartbrook. 9. At the time of the collapse Dean Ling was in the process of operating an Eimco front-end loader fitted with a forklift attachment to position palletised fibercrib blocks supplied by Pioneer Building Products Pty Limited. Raydon Rich (deceased) and Michael Ham were also working on the construction of the fibercrib stack at that time. 10. At no time on the day of the subject incident were Mr Rich (deceased), Mr Ham and/or Mr Ling relevantly supervised in the construction of the fibercrib stack by Mr Ryan or any other person. 11. As a consequence of the fibercrib stacking collapse, Raydon Rich sustained fatal injury. 12. An inspection of the accident site was undertaken at 5.15 pm on the day of the incident by Inspectors of the Department of Mineral Resources, District Check Inspectors of the United Miner's Federation, Police and representatives of Dartbrook. A further inspection of the accident site was undertaken by the Accident Investigation Team in the course of both investigations. 13. Following its attendance at the accident site, the Accident Investigation Team concluded that the most probable cause of the accident was inadvertent contact between the driver's side tyne of the forklift attachment to the Eimco and one of the bottom timber packers, used to pack a pallet, that was protruding from the base of the fibercrib stack. The inadvertent contact between the tyne and the bottom timber packer causing the stack to become unstable and then topple over. 14. The Defendant had been undertaking construction of underground seals and ancillary roof supports at Dartbrook for about eighteen months prior to the subject accident. Pursuant to "Longwall Seal No. 1; Contract Z1010" dated 12 August 1996 the Defendant stationed a number of its employees at Dartbrook Colliery to work underground on the installation of its seals and on the installation of ancillary roof supports associated with the advance of the Longwall. 15. Initially, the ancillary roof support installed in combination with the Defendant's underground seals consisted of "wooden cribs". Then, in about August 1996, Dartbrook commenced investigation of a new roof support system to be installed in combination with the Tecrete seals. Dartbrook chose fibercrib blocks manufactured by Pioneer Building Products Pty Limited. 16. Pioneer Building Products Limited supplied fibercrib blocks in three packaging configurations: (a) "156 pack" - the standard packaging arrangement consisting of 156 blocks stacked on each pallet. The pallets were to be taken underground and used to build chocks manually - that is by hand. As at August 1996, this was the most common method of building fibercrib chocks. (b) "60 pack" - a pre-packaged "ready to install" part chock. Two packs, each consisting of 60 stacked fibercrib blocks were strapped to each pallet. Timber skids were located on the base of each "60 pack" to allow forklift tines, or a jib and chain, to be used to lift each pack off the pallet and into position. (c) "36 pack" - again, a pre-packaged "ready to install" part chock. The packs were fitted with timber skids to allow them to be machine packed with forklift tynes or a jib and chain. Pioneer Building Products supplied Dartbrook with a standard procedure for manually installing fibercrib blocks. A standard operating procedure for the mechanical installation or stacking of "60 packs" was not provided. 17. Pioneer Building Products Pty Limited supplied Dartbrook with a standard operation procedure. This standard operating procedure called for the manual installation of fiber blocks and roof support. 18. In September and October 1996 Dartbrook sought to develop its own system for the stacking of "60 packs" using an Eimco front-end loader fitted with forklift tynes. Dartbrook developed a working procedure entitled "Installation of Fibercrib Supports with Eimco" dated 10 October 1996. 19. Dartbrook encountered problems with the "machine stacking procedure" as the tynes of the Eimco forklift attachment were too thick for the opening in the pallets provided by Pioneer Building Products Pty Limited. 20. As a consequence of the difficulties encountered by Dartbrook in the machine stacking of "palletised" fibercrib blocks, Dartbrook reverted to handstacking the fibercrib blocks into the roof support cribs in accordance with the standard operating procedure for manual installation of fibercrib blocks prepared by Pioneer Building Products Pty Limited. Dartbrook sought to have Pioneer Building Products Pty Limited modify the fibrecrib 60 pack pallets provided by Pioneer Building Products Pty Limited. 21. From about September or October 1996, Dartbrook began to involve sub-contract works in the construction of fibercrib roof supports [ie. "fibercribs"], including Tecrete employees and underground support works employed by United Mining Services Pty Limited. 22. Initially Dartbrook planned to have the Defendant's employees take over the machine stacking of palletised fibercrib blocks with the assistance of a trained Eimco operator. 23. However, because of the difficulties referred to above with respect to the machine stacking of fibercrib 60 packs, the Defendant's employees were principally trained in the manual handling and installation procedure described by Pioneer Building Products Pty Limited. 24. In late 1996, Michael Ham and Raydon Rich, two underground support service labourers employed by the Defendant, were stationed by the Defendant at the Dartbrook Colliery to work on the construction of the Defendant's underground seals and ancillary roof supports. 25. In early January 1997, Rodney Moylan, their supervisor, taught Michael Ham and Raydon Rich (deceased) to build fibrecrib cribs by hand. At this time, Mr Moylan also supplied them with copies of the Dartbrook "machine stacking" procedure dated 10 October 1996 in order to show Michael Ham and Raydon Rich (deceased) an illustration of a completed fibrecrib block. 26. Neither Michael Ham nor the deceased, Raydon Rich, had any training or experience in machine stacking palletised fibercrib blocks using an Eimco fitted with a forklift attachment prior to the date of the subject incident. 27. Dean Ling, an employee of United Mining Services Pty Limited was placed at Dartbrook Colliery commencing on 29 May 1995. Initially Mr Ling worked as support staff with Strata Drilling at the Dartbrook Colliery. Mr Ling was transferred to "the pipe crew" on 2 September 1996. Subsequently, Dartbrook directed Mr Ling to work with the Defendant's employees in the construction of underground seals and ancillary roof support. 28. In late 1996, Mr Ling sought training as an Eimco driver from Dartbrook. Dartbrook agreed to train him and on 19 December 1996 the manager of the Dartbrook Colliery, Mr John Howard, appointed Mr Ling to operate Dartbrook's EJC130 Eimco LHD front-end loaders, together with their attachments. 29. After Mr Ling was appointed to operate Dartbrook's Eimcos, he was directed to provide support services, including services an an Eimco operator, to the Defendant's employees. 30. On 20 January 1997, Brendan Ryan, a mining engineer employed by Dartbrook, directed Dean Ling, Michael Ham and Raydon Rich (deceased) to machine stack "palletised" fibercrib blocks in accordance with Dartbrook's operating procedure. According to Mr Ling and Mr Ham, Mr Ryan told them that the blocks had been delivered on adjusted pallets designed to overcome the earlier difficulties with the size of the Eimco forklift tynes. 31. Mr Ling and Mr Ham expressed disquiet to Mr Ryan on that morning about doing machine stacking of palletised fibercribs. Mr Ling and Mr Ham told Mr Ryan that they wanted to continue handstacking the fibercribs rather than to undertake machine stacking of the palletised fibercribs using the Eimco fitted with a forklift attachment. Nonetheless, Mr Ryan requested that they proceed with the machine stacking of the new 60 packs. 32. Mr Ham and Mr Rich (deceased) went underground to Cut Through 18 and began to prepare the area. Mr Ling drove underground on an Eimco and brought with him the fibercrib "60 packs", together with other materials to be used in the proposed work. 33. After Mr Ling arrived at the cut-through, Mr Ling, Mr Ham and Mr Rich (deceased) prepared the base for the fibercrib stack as shown by Mr Moylan. 34. Once the base for the fibercrib stack had been completed, Mr Ling used the Eimco fitted with the forklift attachment to position a "60 pack" on the base. 35. Mr Ling then attempted to collect a second "60 pack" but the straps on this "60 pack" failed, allowing the fibercrib blocks to fall off the pallet. 36. After the failure of the second "60 pack", Mr Ling, Mr Ham and Mr Rich (deceased) had to clear the fibercrib blocks out of the path of the Eimco before they could return to machine stacking the "60 packs". 37. After the fibercrib blocks from the broken "60 pack" had been cleared from the path of the Eimco, Mr Ling, Mr Ham and Mr Rich (deceased) returned to machine stacking the "60 packs". Mr Ling successfully positioned a second "60 pack" on top of the first "60 pack" that had been positioned directly on the base. 38. After the second "60 pack" was in position on the stack, Mr Ling, Mr Ham and Mr Rich (deceased) inserted timber sleepers into the tyne spaces of the second pallet. Once the second "60 pack" was in position, Mr Ling, Mr Ham and Mr Rich (deceased) inserted three wooden sleepers into the spaces for the tynes. The sleepers had to be hammered into place and at least one of the sleepers protruded from the "Eimco" side of the stack. 39. According to Mr Ham, Mr Ling then sought to position a third "60 pack" using the Eimco fitted with the forklift attachment. Mr Ling had difficulty centering the third "60 pack" because of the position of the stack and the physical characteristics of the cut-through. 40. Mr Ling reversed the Eimco and discussed the next step with Mr Ham and Mr Rich (deceased). It was decided to try and use one of the tynes to lift the edge of the third "60 pack" and then "square it up" on the stack. 41. Mr Ling then attempted to square up the third "60 pack" in the manner described but the stack appeared to become unstable. 42. Mr Ling reversed the Eimco and further discussions took place between the crew. It was decided to attempt to adjust the third "60 pack" for a second time. On this occasion the tynes on the forklift attachment were manually adjusted to try and improve access to the third "60 pack". 43. When Mr Ling attempted to square up the third "60 pack", the stack again became unstable. 44. Mr Ling then decided to withdraw the tynes and reverse the Eimco. 45. While Mr Ling was withdrawing the tynes, reversing the Eimco and dropping the forklift attachment, Mr Ham saw that the stack was beginning to fall towards Mr Rich (deceased), who had stepped between the stack and the front of the Eimco. The fibercrete blocks fell towards Mr Rich (deceased) striking him on the back of the head and knocking him against the front of the Eimco. 46. Mr Rich (deceased) received massive head injuries as a consequence of being struck by the fibercrete blocks and died instantly. 47. Mr Ling, Mr Ham and Mr Rich (deceased) did not receive any training or instruction in the operating procedure for the machine stacking of "palletised" fibercrib blocks prior to 20 January 1997. 48. The Defendant did not ensure that it was advised prior to 20 January 1997 that Dartbrook proposed to re-introduce machine stacking of "palletised" fibercrib blocks and in particular, that Dartbrook proposed to direct Mr Rich (deceased), Mr Ham and/or Mr Ling to undertake that work. 49. On 20 January 1997 whilst undertaking the machine stacking of palletised fibercrib blocks using an Eimco fitted with a forklift attachment, Mr Ling, Mr Ham and Mr Rich (deceased) received no effective supervision of that task.

5 For the defendant, without objection, a statement of Gary Ashford was tendered. Mr Ashford was the chief executive officer of Minova Australia Pty Ltd which was previously known as Fosroc Mining Australia Pty Ltd. Mr Ashford had held the position as chief executive officer of Fosroc since 1989 when it was known by another name. Mr Ashford stated that Fosroc and then Minova was part of an international group specialising in manufacturing and supplying chemicals to the mining industry. The company had a number of offices throughout Australia and the range of products sold to the mining industry included resin capsules for rock bolting, high volume output grouts for strata support, ventilation control devices and specialised coatings including the new strata control membrane "TEKFLEX".

6 In Australia Minova also provided contract ventilation services and ventilation systems through Ventmine (Qld) Pty Ltd and Ventime Pty Ltd. Minova, Ventmine (Qld) and Ventmine were all wholly owned subsidiaries of Mintun Australia Pty Ltd.

7 In relation to the corporate history, Mr Ashford said that Fosroc Mining was known as Fosroc Chemfix until early 2000 and was a metallurgical chemical supply company that had a small mining side to its operation in Australia which it wished to expand. Its parent company was Burmah Castrol Plc in the United Kingdom. On or about 28 October 1999, Fosroc Chemfix, through the entity Foseco Pty Ltd, purchased all the issued share capital of Tecrete Industries Pty Ltd and two other related entities, Ventmine and Ventmine (Qld), collectively referred to as Ventmine. This occurred as part of the strategy of Fosroc Chemfix to expand its presence in the mining industry.

8 The Ventmine/Tecrete group of companies owned the intellectual property in unique products used in underground coal mines. These companies were the leading providers of ventilation structures to the Australian underground coal mining industry. The purchase of the Ventmine/Tecrete group, because of its unique products, was seen as an effective vehicle for Fosroc Mining to gain exposure to the coal mining market in Australia and establish its presence so as to then sell its own products as well as to continue the prominence of the Ventmine/Tecrete group companies in the provision of underground ventilation products and services.

9 Fosroc mining undertook extensive due diligence when purchasing Tecrete and numerous enquiries were made of the then sellers of Tecrete, including enquiries relating to pending litigation or prosecution. The present matter before the Court was commenced after Fosroc purchased Tecrete.

10 In relation to the defendant, Tecrete Industries Pty Ltd, Mr Ashford said that it was no longer a trading entity in that it no longer held any assets nor was it an employer. The defendant ceased to be an employer when it was acquired by Fosroc Mining in October 1999. The assets and intellectual property for which the Ventmine/Tecrete group of companies was purchased by Fosroc Mining were now held by Ventmine and Ventmine (Qld). These two entities continue to supply underground ventilation seals and associated services previously provided in conjunction with Tecrete.

11 In the course of the change in ownership of the defendant, which occurred in 1999, Mr Ashford spent some time concentrating upon the health and safety activities of the predecessor entities. This evidence was designed to demonstrate a quite different occupational health and safety culture which was brought to the defendant after its purchase in 1999, and therefore after the incident which occurred in January 1997. The evidence showed that in 1995 consultants conducted an external audit to review occupational health and safety procedures at Fosroc Mining which was followed by a further safety audit by consultants in 1997. There was evidence of safety meetings being conducted dating back to 1992. Further, at the time that Fosroc Mining purchased Tecrete, Ventmine and Ventmine (Qld), the Ventmine companies had standard work procedures for the different tasks involved in installation of the product and Ventmine had begun developing a series of procedures directed to the identification of hazards in the tasks to be performed at each stage of the installation of Ventmine products.

12 Following the acquisition of Ventmine by Fosroc Mining, the Ventmine entities in 2000 engaged a consultant to facilitate an operational risk assessment to consider the manner in which ventilation structures which were installed by Ventmine. The assessment was to review the hazards and potential risks associated with the work undertaken by Ventmine in the underground coal industry. The manner in which that task was undertaken and its comprehensive nature was dealt with in Mr Ashford's statement.

13 Mr Ashford also explained the safety management structure adopted since June/July 2000 at Ventmine and the way in which the safety management plan operated. There was an emphasis on training which also involved a supervisor check list to ensure that a trainee was educated in all aspects of the tasks. There was also a tool box talk programme where employees were able to discuss and learn about safety issues in the performance of their work. An example of a tool box talk programme guide was placed before the Court.

14 There were similar structures in place for Minova which also had a safety manual and a safety plan. There was the same emphasis on training, supervision and risk identification and a number of opportunities for employees to participate in discussion of relevant issues concerning hazards in the workplace. Committees and individuals were given specific responsibilities under the plan and that including Mr Ashford as the chief executive officer. At Minova, hazard identification was carried out and monitored.

15 A comprehensive risk assessment had been carried out in relation to each product supplied by Minova and the risk assessments were formalised. In addition, Minova supplied detailed information about the products it supplied and materials safety data sheets. The company had been audited by highly qualified safety auditors. Both Minova and Ventmine had engaged a safety consultant whose responsibilities included the implementation of effective occupational health and safety management structures and training and to monitor compliance with the structures in place. The consultant conducted risk assessment, produced relevant documentation and ensured the companies kept abreast of all important legislative regulatory and general safety issues.

16 Mr Ashford stated that the products for which the defendant Tecrete Industries Pty Ltd was contracted to provide to Dartbrook in 1997 was still supplied by Ventmine. Ventmine employees, however, were no longer involved in the construction of ancillary roof support by the method used on the day of the incident, in January 1997 at Dartbrook Colliery.

17 In relation to its corporate citizenship, attention was drawn to the fact the Minova supports various charities and requests for involvement in community service, including the Starlight Foundation, the Blind Society and the Children's Safety Handbook published by the police. Minova also hosts a number of mine golf days where the proceeds are donated to various charities and hospitals.

18 During addresses, senior counsel for the defendant clarified that when this accident took place in January 1997, Tecrete was engaged in operational matters and contracting as well as the development of intellectual property and supply. In April 1997, these functions were divided and Tecrete divested itself of its contracting arm. Ventmine Pty Ltd was formed by and engaged the employees that Tecrete had utilised for the purposes of the installation work, including the contracting work. Thereafter, Tecrete provided its intellectual property exclusively to Ventmine and Ventmine (rather than Tecrete) installed that product. After that division in 1999, Fosroc purchased Ventmine and Tecrete and later became Minova.

THE SUBMISSIONS 19 It was accepted by the prosecutor in circumstances where the defendant had no relevant prior record that the maximum penalty was $550,000. It was also confirmed that the current owners of the defendant, Minova Australia Pty Ltd (previously known as Fosroc Mining Australia Pty Ltd) had no relevant record of prior convictions. During the course of the hearing, senior counsel for the defendant stated that to the best of the knowledge of those who instructed him neither of the Ventmine entities had a relevant record.

20 It was submitted that the fact that the defendant was effectively acting as a labour hire company in allowing its employees, at the direction of Dartbrook, to carry out ancillary work, including the construction of roof support cribs, did not affect either the nature or the extent of the duty owed by the defendant to its employees pursuant to s 15(1) of the Act. In Drake Personnel Ltd t/as Drake Industrial v WorkCover [1999] 90 IR 432 at 455, the Court stated: A labour hire agency does not employ people to work for itself but to work for a client, it does not directly on a day to day basis supervise the tasks carried out by the employee and it is usually not in control of the workplace where the work is done. However, these circumstances do not obviate, or diminish the obligation of the employer under s 15(1) of the O H and S Act to 'ensure the health, safety and welfare at work of all the employer's employees'. Indeed, in our view, an employer who sends its employees into another workplace over which they exercise limited control is, for that reason, under a particular positive obligation to ensure that those premises, or the work done, do not present a threat to the health, safety or welfare of those employees. Certainly, there is no basis to consider that such an employer has a lesser liability or obligation under s 15(1).

21 The contract between the defendant and Dartbrook contemplated that, from time to time, Dartbrook would issue directions to the defendant's employees with respect to the performance of ancillary services. Therefore, there was a particular and specific need for the defendant to put in place systems designed to ensure that it was notified by Dartbrook and by its own employees before the defendant's employees undertook any such ancillary work so as to ensure that those employees did not work in areas, on equipment and/or in accordance with work procedures that had not been the subject of specific inspection and approval by the defendant.

22 The defendant, however, did not have in place a system designed to ensure that it was notified, either by Dartbrook or by its own employees, before those employees commenced work in areas, and/or on equipment and/or in accordance with work procedures that had not been the subject of specific inspection, audit and approval by the defendant. Further, the defendant did not ensure that its employees were trained in a safe system of work for the machine stacking of "60 packs" prior to its employees commencing work on 20 January 1997 and/or that they were supervised, adequately or at all, as Mr Rich and Mr Ham went about the job assigned to them by Mr Ryan on that morning.

23 The prosecutor submitted that in the present case there were a number of factors that were indicative of the objective seriousness of the offence: (a) the work crew was not trained in the work procedure that had been developed by Dartbrook; (b) the work crew was not being supervised in the conduct of the subject task; (c) the work was being performed with modified "60 packs" that had not been the subject of any testing prior to the task being assigned to the subject work crew and/or part of the work commencing underground on 20 January 1997; (d) the machine stacking procedure involved the construction of cribs that was similar, in essence, to constructing a tower out of blocks - until the "60 packs" were secured, there was a significant and foreseeable risk that the tower could collapse either as a consequence of improper stacking, or contact between the fork lift attachment and the "60 pack"; (e) the work was being performed underground and the physical conditions of that environment added to the risks involved in the task of machine stacking; (f) having regard to the nature of the work being performed, there was an obvious risk of grave injury associated with the work being undertaken; (g) both Mr Ham and Mr Rich were at risk; and (h) Mr Rich sustained fatal injuries.

24 In relation to subjective factors, the prosecutor noted that the commencement of the proceedings was delayed until after the conclusion of an Inquest. Once the proceedings were on foot, they were delayed by the conduct of an interlocutory challenge to the commencement of proceedings supported by the defendant. That interlocutory challenge was determined against the defendant in June 2002. Subsequently, the defendant entered its plea of guilty in March 2003, on the third occasion that the matter was listed for plea and directions following the June 2002 interlocutory judgment. In those circumstances, the prosecution did not concede that the plea was entered at the earliest possible time. Nevertheless, the prosecutor conceded that the defendant was entitled to challenge the commencement of the proceedings.

25 It was also accepted that the defendant was entitled to a discount with respect to its undoubted co-operation with the WorkCover Authority in the investigation of the incident. It was confirmed that the defendant made its officers available to be interviewed by the WorkCover Authority and provided copies of all relevant investigation reports.

26 For the defendant, considerable emphasis was laid upon the fact that the ownership and nature of the company now before the Court was significantly different to the company that was involved in the breach in 1997. Besides the present company not being involved in installation, the whole nature of the occupational health and safety regime, as demonstrated by the evidence, was not only vastly different but more effective. It was then submitted that such a consideration was not confined to the issue of specific deterrence but was also relevant to the culpability of the present defendant. It was also significant that the nature of the defendant had been materially altered before the prosecution was commenced. Nevertheless, it was conceded that the defendant had come to Court accepting liability and responsibility "in every real sense". In this context, it could not be left out of consideration that there was now a different entity before the Court.

27 Having regard to the evidence that the defendant was no longer involved in installation work such as was being performed on the day in question which gave rise to this prosecution, it was submitted that there was no valid role for specific deterrence. In relation to general deterrence, while it was accepted that the Court was required to consider that aspect, its role was properly adjusted by a consideration of the surrounding circumstances of the new corporate structure and its comprehensive systems.

28 Senior counsel for the defendant rejected the prosecution's submission that in this case it could not be said that there was an early plea having regard to the extensive delay, and the challenge to the jurisdiction of the Court to dealt with the prosecution because of the alleged defect in authority to commence the proceedings. The underlying theme in R v Thompson; R v Houlton (2000) 49 NSWLR 383 was that there was a utility and benefit in not taking up the Court's time with a hearing and the costs and disruption associated with calling the necessary witnesses. There had been no plea entered by the defendant until after the interlocutory proceedings were completed, and thus the prosecution and the Court had not been put to any unnecessary cost in time or financial resources by preparing for a contested hearing which did not take place. It was said that in these circumstances, the defendant was entitled to either the full level of discount or a very high level of discount because of its plea of guilty.

DELIBERATIONS 29 There was no real contest as to the seriousness of this offence with the defendant directing attention to those matters which tended to ameliorate the overall penalty which might be fixed by the Court. Senior counsel for the defendant did submit that because the nature of the company had so significantly changed that it could properly be said there was a different entity now before the Court: that was a factor which should be taken into account in assessing culpability. I am unable to accept that submission because the legal entity has remained the defendant throughout the various shareholder arrangements. I do propose, however, to take this aspect into account in relation to subjective considerations.

30 The charge to which the defendant has pleaded guilty involves an acknowledgement that it failed to ensure that operating procedures for the stacking of these blocks was safe; a failure to train its employees in the use and application of safe working procedures when stacking the blocks; failure to ensure that the modified palettes were suitable for use with the fork lift attachment available at the colliery; and a failure to ensure that the employees were supervised in the construction of the stack of blocks. In short, the defendant has pleaded to a fairly comprehensive failure to have regard to the safety of its employees working at the Dartbrook colliery. Consideration of the extensive Agreed Statement of Facts (reproduced earlier in this judgment) underlines the seriousness of the breach. The fact that a worker was killed and indeed that possibly another or other employees may have also have died or been seriously injured in this incident, emphasises the nature and seriousness of the risk to which employees were exposed.

31 It was also common ground that general deterrence was an important consideration. I accept the submission for the prosecutor that a penalty in this matter draws attention to the need for safe working practices, especially in what is otherwise a dangerous industry by its very nature, the mining industry. Having regard to the fact that the defendant no longer engages in installation work and having regard to the lapse of time between the incident and the imposition of penalty, there is no significant role in this case for specific deterrence.

32 Having regard to these matters, I would impose a primary penalty of $175,000.

33 In relation to subjective features, I am satisfied that very significant changes have been brought to the operations of the defendant by the new owners. In this dangerous industry, it is commendable that the various corporate entities which are now involved and/or influence the defendant have not come to attention and do not have a prior record of convictions under occupational health and safety legislation. This attention to safety and the apparent diligence which brings about such safety records and systems of work is to be encouraged. Credit is also to be given to the defendant for its co-operation with the investigations of the WorkCover Authority and in relation to its general good corporate citizenship. For these factors, I would allow a discount of 10 per cent.

34 Turning to the issue of whether or not it could said that in this case there was an early plea, I am guided by the judgment of the Full Court in Ridge Consolidated Pty Ltd v WorkCover Authority of New South Wales (Inspector Mauger) (2002) 115 IR 78, especially at paragraph [38]: As to the circumstances of the present proceedings, we consider that the plea was entered at the first reasonable opportunity. The plea was entered immediately following the crystallisation and resolution of the issues surrounding the Court's jurisdiction. In reaching the finding in this matter, it should not be assumed that there is a rule that technical points taken by defendants under the Act could not affect the consideration of a discount for a plea of guilty. It is possible to envisage circumstances where the raising or taking of technical points could properly be considered by a sentencing Judge as being factors relevant to the assessment of whether a plea was early or not and in particular whether the plea was entered at the first reasonable opportunity. However, in the circumstances of this case we do not consider that would be the appropriate conclusion to reach.

35 The nature of the jurisdictional issue raised in this matter was wether the prosecution was properly authorised. Although that issue was vigorously debated and many arguments developed, I found that both the law and the facts were relatively straightforward. The prosecutor, correctly, concedes that the defendant was entitled to take the point. The point was also taken on behalf of Dartbrook Colliery in relation to similar proceedings brought against it, and in a practical sense, one way or the other the issue was to debated. The defendant may have opted to simply await the decision in the Dartbrook case, but the result would have been the same -there would have been a period before consideration could properly be given to the question of a plea. In all these circumstances, I am prepared to accept that the plea was entered at a relatively early stage and a discount of 20 per cent should be accorded to the defendant on the primary penalty. The total discount allowed to the primary penalty is therefore 30 per cent.

ORDERS 1. The defendant is convicted of the charge under s 15(1) of the Occupational Health and Safety Act 1983 to which it has pleaded guilty in matter IRC 2263 of 2001.

2. The defendant is fined the sum of $122,500 with moiety thereof given to the prosecutor.

3. The defendant is to pay the costs of the prosecutor as agreed or assessed in accordance with the Rules of the Court.

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