Extrusion Machine Co (Australia) Pty Ltd (the offender) has pleaded guilty to an offence that being a person who had a health and safety duty pursuant to section 19(2) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Roberto Caboteja, Manesh Pillai and Neil Acibar to a risk of death or serious injury contrary to section 32 of the Act.
The maximum penalty for the offence is a fine of $1.5 million.
[2]
Facts
The parties presented an Agreed Statement of Facts which can be summarised as follows.
The offender carried on a business from its premises at 16 Seddon Street, Bankstown involving the provision of engineering services that included the repair and maintenance of extrusion machines. The offender had over 45 years' experience in aluminium extrusion and from time to time repaired or serviced extrusion machines of its customers, including plastic extrusion machines.
The offender was a family run business. Hans Ruoff, his wife and son Michael are the are directors of the offender. Michael Ruoff works as the manager of the offender.
Alejandro Bocaz was employed by the offender. Mr Bocaz specialised in the plastic and rubber extrusion. He was the only employee of the offender with that expertise. As at July 2014 he had 30 years work experience and had been employed by the offender for about 14 years. Mr Bocaz attended customers' premises from time to time as required. Mr Bocaz reported to Hans and Michael Ruoff.
On or about 11 June 2014 Mr Achibar, an employee of Grass Manufacturers Pty Ltd (Grass) contacted Hans Ruoff to request the offender to repair a Jenn Chong Extruder (the extruder) at its premises at Unit 8.1, 1A Hale Street, Botany. Grass operated a business manufacturing synthetic grass for tennis courts and football pitches.
Plastic polymers in the shape of pellets were fed into the extruder. The extruder applied heat to melt the material and mechanical pressure was applied to force the molten material through a heated die to produce a finished product in a cross-sectional shape. The extruder was designed for the extrusion of polypropylene (PP) and polyethylene (PE).
At some time between 11 June 2014 and 18 June 2014, Mr Bocaz attended Grass' premises and inspected the extruder. He provided a quote for the work on 18 June 2014, which Grass accepted the next day. The quote identified the work to be undertaken as the identification of the cause of the fault by dismantling the extruder. Grass did not have the expertise to carry out the work.
On or about 7 July 2014 Mr Bocaz attended the premises of Silver Fox Chemicals Pty Ltd (Silver Fox) and spoke to Gus Loor. Mr Bocaz was well known to Mr Loor as a regular customer and he had repaired some of Silver Fox's machinery. Mr Bocaz told Mr Loor that he had an extruder to clean and that he wanted to purge the machine, not just clean it. Mr Loor provided Mr Bocaz with a bag of purge material at no cost. Mr Loor told Mr Bocaz that the maximum temperature for the purge material he supplied was 180 degrees Celsius.
Mr Bocaz returned to Silver Fox on 8 July 2014 and was supplied with another bag of the purge material at no cost.
The purge material was poly vinyl chloride (PVC) resin and was designed to clean equipment that used PVC only. The purge material was not suitable for the extruder that usually used PE or PP. If used in a PE or PP machine, such as the extruder, the purge material supplied may carbonise (produce solid carbon) and give off hydrochloric acid in the form of gas.
On 7 July 2014 Mr Bocaz attended Grass' premises. He discussed with Mr Waterford of Grass ways to clean the extruder. He then left and obtained the purge material. He returned and showed the bag of purge material to Mr Waterford. He told Mr Waterford that the purge material was more abrasive as a cleaning agent than PE or PP alternatives and that it would be more effective in removing black carbon or burnt residue. Mr Bocaz asked to see the extruder operate normally to assist with identifying the fault. Mr Caboteja, Mr Pillai, Mr Acibar and Mr Waterford were present during this.
Mr Bocaz then ran a 25 kg bag of the purge material through the extruder. The extruder began to extrude black plastic residue and gave off a burnt smell. When questioned by Mr Acibar, Mr Bocaz said that the black material was normal and was just the purge material. Mr Bocaz said he would return the next day with more purge material before beginning to dismantle the extruder. Mr Acibar sent the Grass workers home early as a result of the heavy acrid smell.
Mr Bocaz returned on 8 July 2014 and put another 25kg bag of the purge material through the extruder with the temperature set at 180 degrees Celsius. Mr Caboteja, Mr Pillai and Mr Acibar were present. A small amount of residue came out of the extruder before it stopped working, fumes appeared and an acidic chlorine smell was detected. The extruder emitted a large quantity of fumes.
Mr Bocaz considered that the die filters within the machine may have become blocked and should be removed. The filter housing would not move. Mr Bocaz retrieved a hammer from his work vehicle and hit the die with it, in an unsuccessful attempt to move it.
Mr Acibar suggested that the hydraulics on the machine where too low and if turned up the filter housing may move. Mr Bocaz, Mr Pillai and Mr Acibar were on one side of the extruder looking at the hydraulics. Mr Caboteja was on the other side of the extruder pressing buttons on in an attempt to move the filter housing, when a discharge of steam and molten material occurred from the area above the buttons and hit Mr Caboteja in the face.
Mr Caboteja was not wearing personal protective equipment (PPE) other than gloves.
Mr Caboteja underwent a number of skin grafts to his eyelid and face. He was unable to work for 4 months and then had a gradual return to work. He has resumed full-time duties.
The hazards involved with trying to access the die and filter of an extrusion machine while it is in operation are well known in the industry. Pressure can build up behind a die causing steam and molten material to be ejected from the machine.
There was a risk of a person being splashed with hot material when the purge material was heated beyond a temperature that it could be safely heated.
The Material Safety Data Sheet (MSDS) for the purge material indicated that it would emit toxic fumes on burning. Exposure controls recommended the wearing of PPE to minimise the risk of being splashed with hot material. The MSDS was available from Silver Fox at the time of the supply of the purge material but was not provided to Mr Bocaz.
There were no measures in place at the time of the incident to address any of these hazards.
On 7 July 2014 the temperature of the extruder was set too high causing the PVC material to burn releasing chlorine gas and contributing to the build up opf material and pressure around the die. On 8 July 2014 the temperature was lowered but the PVC material continued to burn which led to the build up of pressure and the ejection of the steam and molten material from the machine.
The offender did not have in place a safe system of work to ensure that Mr Bocaz:
1. obtained the purge material through an approved process;
2. was provided with the MSDS for any chemical received by him for use by him in the repair and maintenance of extrusion machines and that he passed the MSDS onto the relevant customer;
3. was informed of the type of material normally used in the extruder and the temperature at which the material could be safely used;
4. undertook the work provided for in the quote, without the offender's knowledge;
5. was trained in how to conduct a visit at a customer's premises to provide a quote or repair equipment;
6. undertook a risk assessment before placing the purge material in the extruder. Mr Bocaz had not been trained on how to undertake a risk assessment process or how to apply appropriate control measures; and
7. was provided with a safe work procedure for cleaning the extruder, including the removal of the die filter apparatus.
Once the purge material began to burn Mr Bocaz did not turn off the extruder and wait for it to cool down, in order for him to manually dismantle it. Mr Bocaz did not warn Mr Caboteja, Mr Pillai or Mr Acibar to remain clear of the extruder or to wear PPE when it started to emit chlorine gas.
Improvement Notices were issued to the offender to ensure it had a safe system of work to prevent exposure of persons to burns, fumes or dust when using PVC and to ensure emergency procedures were in place.
[3]
The Offender's Case on Sentence
The offender relied on an affidavit of Hans Ruoff, a director of the offender, sworn 14 July 2017. Mr Ruoff was present in Court for the sentence hearing and was not required for cross-examination. Mr Ruoff's evidence can be summarised as follows.
Mr Ruoff has been a director of the offender since its incorporation in 1969. The other directors are Mr Ruoff's wife, Arlene and his son Michael.
Mr Ruoff qualified as a machinist in Germany at the age of 16 in 1950. In 1956 he migrated to Canada. In 1958 he began working for Extrsuion Co Canada and a few years later. In 1969 he migrated to Australia to establish Extrusion Co Australia on behalf of the Canadian company. He was initially employed as the manager of the Australian company and was solely responsible for its development. In 1976 he purchased the shares in the company from the Canadian shareholders. He thereafter became the Managing Director. In next 20 years the offender's primary business was the design, development and repair of aluminium extrusion tools and general machining.
In about 2015, Michael took over the management of the business. Mr Ruoff continues to be involved but is semi-retired. Mr Ruoff has not drawn any remuneration from the business since 2001 at a time when the business was suffering some financial strain.
By about 1991 the offender employed 130 people. About 120 of them were machinists working on the floor. The business provided a large number of apprenticeships for local young people.
In about 2010 the business experienced a downturn as a result of the availability of aluminium extrusions from China. The workforce was reduced to about 20.
In 2014 the offender employed 9 people; one in administration and the balance as machinists. In 2017 the offender employs 14 people; 3 in administration and the balance as machinists. The most junior machinist has been employed for 10 years. Mr Ruoff deposed that the offender has been able to keep staff for long periods because it has appropriate safety systems, it has had no workplace accidents, the company is family run and its staff are encouraged to communicate and collaborate on any issues that arise.
Mr Bocaz was first employed in 1998, but Mr Ruoff had known him for about 10 years in the industry prior to that. Mr Bocaz was employed as the offender's first and only specialist in plastic and rubber extrusion. He assumed a senior and autonomous role sourcing and conducting work on behalf of the offender with minimal supervision.
Mr Ruoff believed that Mr Bocaz was a motivated worker who fully understood his trade and his autonomy caused no difficulties. He was required to adhere to the systems and processes of the offender.
The offender has always had a commitment to the health and safety of its workers by training, assessing a worker's expertise, provision of PPE as well as the publication of safety and operating instructions of all machinery at its premises.
Mr Ruoff was aware of the request from Grass for the provision of service to the extruder. Mr Ruoff became aware that Mr Caboteja had been injured and required skin grafts and that he was receiving medical care for his eyesight.
The position of Mr Bocaz's autonomy was the exception at the offender, he was the only employee with such responsibilities. There had been no previous incidents involving Mr Bocaz.
Mr Ruoff expressed regret for the injury and apologised to Mr Caboteja for the injury he sustained. Mr Ruoff has read the Victim Impact Statement and acknowledged that Mr Caboteja has suffered physically, psychologically and emotionally as a result of the incident.
The offender complied with the Improvement Notices. The offender has reviewed its safety systems and has directed Mr Bocaz not to perform any work at customer's premises, to inform Mr Ruoff and Michael of all work he is engaged to perform, directed Mr Bocaz not to use PVC as purge material and directed him to act in accordance with MSDS for any chemical or substances in performing any work. The offender has also required any quotes provided by Mr Bocaz to be reviewed by Mr Ruoff or Michael, instructed Mr Bocaz not to depart from the scope of works provided for in a quote, to inform Mr Ruoff or Michael of any intended work so that the risks presented can be assessed, directed Mr Bocaz to inform Mr Ruoff or Michael if there is any need to depart from the scope of works.
Mr Ruoff provided the financial statements for the offender up to 31 July 2016. The prosecutor requested other documents that were provided and tendered. The offender made a profit of about $40,000 in 2016. It made a small loss in 2015 of about $3,000 and a loss of about $61,000 in 2014.
Mr Ruoff expressed concern that a significant fine may affect the solvency of the offender.
The other material indicated that the offender had about $287,000 in a bank account and a $400,000 overdraft facility approved as available to it, although. no funds have been drawn down on that facility.
[4]
Consideration
I have had regard to the objects of the Act set out in section 3 and the purposes of sentencing set out in section 3A Crimes (Sentencing Procedure) Act 1999.
[5]
Objective Seriousness
The risk of Mr Bocz making an error of judgment whilst undertaking work at a customer's premises was a foreseeable one. Employers must take steps to protect against risks created by negligent or inadvertent employees in the course of their work, if it is reasonably practicable to do so.
The likelihood of the risk coming home were low. Mr Bocaz was considered to be a good employee with considerable skills. The series of errors made by Mr Bocaz were an isolated incident.
The offender should have taken steps to inform itself about the potential risks that were created by Mr Bocaz's work and trained him on how to eliminate or minimise those risks. The provision of training to Mr Bocaz was a simple remedial measure. The offender would have had to rely on Mr Bocaz's experience and input to formulate the required training.
The risk was one of serious injury.
The injuries sustained by Mr Caboteja were significant. He has undergone a number of skin grafts and his eye sight is affected. He has been left with facial scarring and has experienced psychological symptoms. His amenity of life has been significantly affected.
Mr Pillai and Mr Acibar were also exposed to a risk of serious injury.
The training was required to minimise the risk of Mr Bocaz making the series of errors that resulted in the incident. The training may not have eliminated the risk.
[6]
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 Ltd v Nash [2016] NSWCCA 37 at [180].
There is also a need for specific deterrence because the offender continues to operate in an industry that presents significant risks to the health and safety of its employees, however it is significantly reduced. The incident occurred as a result of Mr Bocaz's work away from the offender's premises. The offender has decided not to continue to allow Mr Bocaz to work at customer's premises and it has amended its safety systems to prevent a further occurrence of this type of incident. The offender maintains an unblemished safety record at its premises, at which it has employed a large number of people over a period of about 50 years.
[7]
Aggravating factors
The injury harm and loss caused by the offence was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. In order for the aggravating factor to be established I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. The Victim Impact Statement was not objected to or called into question and in my view it is proper to take it into account in consideration of the establishment of the aggravating factor: R v Tuala [2015] NSWCCA 8. Mr Caboteja has sustained damage to his eyesight, scarring and has undergone a number of skin grafts to his face and eyelids. He has also suffered psychological symptoms. The offence does not require an injury to be sustained, but merely the creation of a risk of death or serious injury. A risk that comes home and causes serious injury is thereby more deleterious than may ordinarily be expected for the offence. I am satisfied beyond reasonable doubt that the injury harm and loss caused by the offence was substantial.
[8]
Mitigating factors
The offender does not have any previous convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender has been in operation since 1969.
The offender was a person of good character: section 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. The offender has operated a business that presents risks to the health and safety of its workers for about 50 years and has not been charged with or convicted of an offence. It has also been a large employer within a local area and has over the years provided a large number of apprenticeship opportunities. I am satisfied on the balance of probabilities that the offender is a good corporate citizen and a person of good character.
The offender is unlikely to re-offend: section 21A(3)(g) Crimes (Sentencing Procedure) Act 1999. The offender took immediate steps to prevent Mr Bocaz working off-site and to provide him with appropriate training and a system of work. Taking into account the offender's impeccable safety record of about 50 years without incident in a business that presents risks to the health and safety of workers, I am satisfied on the balance of probabilities that the offender is unlikely to re-offend.
The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender expressed remorse through the affidavit Mr Ruoff. I am satisfied on the balance of probabilities that the offender has accepted responsibility for its actions and demonstrated genuine remorse and contrition.
The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. The offender is entitled to a discount on penalty that reflects the utilitarian value of that plea. The extent of the discount should generally be assessed in the range of 10-25%, but that is only a guide. The primary consideration in determining where in the range a particular case should fall is the timing of the plea, so that the earlier the plea the greater the discount: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The appropriate discount is 25%.
The offender co-operated with the Safe Work investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
[9]
Capacity to pay a fine
The Court is required to have regard to section 6 Fines Act 1996 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: Jahandideh v R [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.
I am not satisfied on the basis of the evidence led by the offender that it has a limited capacity to pay the appropriate fine. The offender has funds available to it in its bank account that can be used to pay the fine. The balance of that account in the financial year 1 July 2016 to 30 June 2017 was between about $118,000 and about $370,000. The balance at 30 June 2017 was $287,585 being an increase of about $165,000 over that financial year. Further, it has available to it an overdraft facility in the sum of $400,000 of which no funds have been drawn down.
The offender has agreed to pay the prosecutor's costs in the sum of $13,000. I have taken that amount into account in deciding the amount of the fine to be imposed: Environmental Protection Agency v Barnes [2006] NSWCA at [78].
[10]
Penalty
The offender is convicted.
I have considered the Victim Impact Statement of Mr Caboteja.
The appropriate fine is one of $60,000 that will be discounted by 25% to take into account the plea of guilty.
I impose a fine of $45,000.
I order that pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
I order that the offender pay the prosecutors costs as agreed in the sum of $20,000.
[11]
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Decision last updated: 31 July 2017