Grip Asia Pacific 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(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Mathew Logie 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 that can be summarised as follows.
In or about November 2015 Mr Logie and another worker Luca Hudson were tasked with dismantling and re-assembling Colby pallet racking (the pallet racking). The offender was in process of moving its business premises from Kulnara to 52 Mustang Drive Rutherford, in New South Wales (the premises).
The pallet racking had originally been installed by a company, Total Racking, at the offender's business premises in Somersby. When the offender moved its business to Kulnara, it engaged Total Racking to move the pallet racking. In November 2015 the offender had decided to engage its own workers to dismantle and re-assemble the pallet racking.
The system of work authorised by Charles Hudson, the director of the offender was based on his observations of what Total Racking did on the prior occasions it assembled and dismantled the pallet racking. It involved Mr Logie free climbing the pallet racking frame and standing on the horizontal beams to position the beams above his head. This system was used for the dismantling of the pallet racking as well as its re-assembly.
The work involved Mr Logie, climbing the vertical uprights, standing on the horizontal cross beams which were 1.5m or 3m off the ground, unclipping or clipping the vertical cross beam and then climbing back down the uprights.
The offender did not provide Mr Logie or Luca Hudson with any safety equipment or scaffolding or elevated work platform whilst undertaking this work. There was no documented risk assessment or safe work method statement (SWMS) created for the work.
At about 8.00am on 17 November 2015 Mr Logie was standing on a horizontal cross beam of the pallet racking that was 3m off the ground, when Luca Hudson saw him fall top the ground.
Mr Logie was taken to hospital by ambulance. He underwent neurosurgery for a sub-dural evacuation, elevation of a skull fracture and cranioplasty. He sustained a traumatic brain injury as a result of the fall.
The offender engaged Total Racking to complete the installation of the pallet racking at the premises.
[3]
Grip Asia's case on sentence
The offender read the affidavit of Charles St John Hudson, the managing director of Grip Asia. Mr Hudson gave evidence before me and was cross-examined.
The relevant features of Mr Hudson's evidence are as follows.
Grip Asia was established in 2008. Both Mr Hudson and his wife are directors of that company. Mr Hudson's background is as a diesel mechanic and in agriculture. He also has some experience in metal fabrication, factory relocation, sign construction and installation.
Grip Asia is an importer of industrial clothing and footwear such as wet weather protection and various other types of industrial equipment. It distributes these goods from the Rutherford Premises. Grip Asia has a total of 3 employees, Mr Hudson and his wife and a sales representative. Mr Hudson's son Luca also assists in the business during university holidays.
Mr Logie commenced employment with the offender first as a casual employee in 2009 and was subsequently made a full time employee in 2011. His main role was to work in the warehouse and assist in other aspects such as mowing lawns of the premises and driving a heavy vehicle.
Mr Hudson deposed that during an earlier move from premises at Somersby to Kulnara, he had observed Total Racking dismantle and re-install the racking and it did not seem to be a technically difficult operation. Total Racking had available an elevated work platform (EWP) but did not use it. Further, Mr Hudson's opinion was that Total Racking would want to undertake the move of the pallet racking all at once which was not convenient to the offender creating logistical difficulties and by leaving the offender without access to the internet and telephone services.
Mr Hudson stated that he undertook research on the internet for the task and also considered the use of an EWP but thought that it would have been cumbersome and potentially dangerous to use, as it required the operator to control the EWP at height and reach across the bay in order to secure the cross beams. Mr Hudson discussed with Mr Logie the hire and use of an EWP but it was agreed not to use one due to lack of training and experience in its usage. Mr Hudson accepted in hindsight a properly used EWP with some training would have been a better option.
Mr Hudson also considered the option of a work box attached to the forklift but deemed it to be unsafe. A further option of hiring mobile scaffolding was also considered but was thought to be ineffective and time consuming with only three people undertaking the work.
Mr Hudson inspected the flooring of the Rutherford premises, making careful measurements and assessments and at all times telling Mr Logie and Luca Hudson to take care and work slowly, to communicate at all times with one another, to avoid heroics and ensure that two people were on the job at all times . Mr Hudson also insisted that once the racking had been installed that it was to be secured with dyna bolts to the concrete for extra stability.
Mr Hudson concedes it was a mistake not to engage Total Racking or to use an EWP and other safety equipment such as harnesses. Mr Hudson also concedes his mistake in not training Mr Logie and Luca Hudson appropriately for the task.
Following the incident the offender engaged a professional pallet installer to complete the installation of the racking. The offender now ensures that no employee undertakes work at height.
Mr Hudson, on behalf of the offender provided support to Mr Logie's family as well as financial assistance and kept close track of his progress and recovery during his time in hospital until Mr Logie left the employment of the offender.
The offender is a small company that donates rain jackets to local schools and makes charitable contributions to the Australian Foundation for Disability. Mrs Rossi Hudson carries out all of the bookkeeping for the offender as well as the other Grip Group of companies, of which the offender is a part of. The offender still only employs three people with Luca Hudson assisting during breaks from university.
In recent years the offender's business has suffered financially owing to long dry spells in the weather leading to vastly reduced sales in rainwear and increased competition from other work and protective wear and industrial clothing suppliers and retailers; both locally and abroad.
Mr Hudson and his wife sold their family home in order to inject money into the business and keep the offender afloat, once the obligations under the mortgage had been met. Mr Hudson has incurred a substantial credit card debt. There is also a loan agreement between a second company operated by Mr Hudson, Grip Australia and the offender.
The offender has not defaulted on any of its obligations with regard to taxation, employee entitlements and the like. The offender has operated at a loss for the last 5 years, based on the financial summary annexed to the affidavit of Mr Hudson. The offender is presently solvent and expects to remain so.
[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 Logie falling when completing the work was obvious. Mr Logie was climbing on the frame of the pallet racking system. He had no stable platform to work from and nothing in place to prevent him from falling. It was plainly foreseeable that he was at risk from a fall as a result of being required to work at height from the frame of the pallet-racking system.
The likelihood of the risk coming home was moderate to high.
There were simple remedial steps to avoid the risk. The offender could have hired appropriate equipment and trained the workers on how to use it. Alternatively, it could have contracted with a pallet-racking installer to undertake the work, as it had done in the past.
This was a case where no adequate system of work was considered or implemented.
The risk was one of serious injury or death from a fall of either 1.5m or 3m.
The injuries sustained by Mr Logie were significant. He suffered a fractured skull and a traumatic brain injury. He required surgery for the skull fracture and to relieve pressure from his brain by the drainage of sub-dural haematomas. He contracted an intercerebral empyema infection and has suffered seizures. He has been unable to return to work.
The objective seriousness of the offence is in the mid-range.
[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 risks to the health and safety of its employees, however it is significantly reduced. The incident was a one-off project relating to the relocation of premises. The offender does not usually require its workers to work at height and has not done so since the incident. The offender has decided to prohibit such work and engaged contractors to complete the work following the incident. The incident has had a significant effect on the directors of the offender.
[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 Logie suffered a fractured skull and a traumatic brain injury. He was hospitalised for an extended period and required a number of surgical procedures. He has experienced personality changes, hearing loss and has difficulties with his speech. 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 2008.
The offender is unlikely to re-offend: section 21A(3)(g) Crimes (Sentencing Procedure) Act 1999. The offender does not ordinarily require its workers to work at height. The incident occurred as a result of its relocation of premises. After the incident, the offender has not undertaken such work again and does not intend to do so. 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 Hudson. He accepted responsibility for the offender's actions, stating that the work should have and could have been done differently. 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. Mr Hudson sent his diary entries relating to the offender's actions after the incident, including his contact with Mr Logie and his family. This was a very unique method of demonstrating what I consider to be very considerable assistance and candour in the context of assessing this mitigating factor.
[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.
The offender is the corporate vehicle for the business of Mr and Mrs Hudson and to a large extent their financial worth is reflected in the company's fortunes. There are other companies associated with the offender and Mr and Mrs Hudson but their worth is not relevant to this issue, and in any event I did not understand from Mr Hudson's evidence that they were particularly wealthy or profitable. The offender has traded at a loss for the past 4 financial years. Mr and Mrs Hudson have had to sell property to provide further capital for the business. The offender now rents the premises from which it operates and Mr and Mrs Hudson live in rented accommodation. The offender is having difficulty in remaining profitable. Mr Hudson was a credible and forthright witness and I accept his evidence. I am satisfied that the offender has a limited capacity to pay.
The offender has agreed to pay the prosecutor's costs in the sum of $16,500. I have taken that amount into account in deciding the amount of the fine to be imposed: Environmental Protection Agency v Barnes [2006] NSWCA 246 at [78].
[10]
Penalty
The offender is convicted.
I have considered the Victim Impact Statement (VIS) prepared by Michael Logie, Mr Logie's father. The extent of Mr Logie's disabilities are such that he was unable to compose the VIS himself.
This is a very difficult case. The offence is an objectively serious one for which general deterrence is significant. The punishment imposed in this case should make it clear to other PCBUs that they cannot expose young workers to the risks involved with an unplanned and unsafe task, such as the present one. I am conscious that the fine imposed may lead to the offender becoming insolvent and that Mr and Mrs Hudson have invested their net worth into the offender.
The appropriate starting point for a fine is $225,000 less a discount of 25% for the plea of guilty. I will exercise my discretion to reduce the fine to some extent based on the offender's limited capacity to pay.
I impose a fine of $85,000.
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 $16,500.
[11]
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Decision last updated: 15 August 2017