SafeWork NSW v Haconby Pty Ltd

District Court of NSW|2018-08-13

Judgment

Haconby Pty Limited (Haconby) has pleaded guilty to an offence that being a person conducting a business or undertaking that had a health and safety duty under section 19(2) of the Work Health and Safety Act 2011 (the Act) to ensure so far as is reasonably practicable that the health and safety of persons, other than workers at work in its business or undertaking, failed to comply with that duty and the failure exposed Geoffrey Mace (Mr Mace) and Lindsay Newton (Mr Newton) to a risk of death or serious injury contrary to section 32 of the Act. (297593/2016)
Haconby Pty Limited (Haconby) has pleaded guilty to an offence that being a person conducting a business or undertaking that had a health and safety duty under section 19(1) of the Work Health and Safety Act 2011 (the Act) to ensure so far as is reasonably practicable that the health and safety of workers whilst the workers are at work in its business or undertaking, did fail to comply with that duty and the failure exposed Leslie Booth (Mr Booth) to a risk of death or serious injury contrary to section 32 of the Act. (297574/2016)
The maximum penalty for each of the offences is a fine of $1,500,000.
The prosecutor tendered an Agreed Statement of Facts and an Agreed Tender Bundle which forms the basis of the background set out below.
Each of the breaches arose from events that took place on 8 October 2014 at the site of Ricegrowers in Deniliquin.

THE REACHSTACKER

From May 2012, Ricegrowers owned and operated at the workplace a container stacker being a Hyster reachstacker model RS45-31CH serial number C222E01552K referred to as "No 17" (reachstacker). Ricegrowers also owned and operated another smaller reachstacker known as "No 13" at the workplace.
The reachstacker had a set of double wheels at the front, that is 2 wheels fitted together at each side. These wheels bear the brunt of the load and are referred to as the load wheels. There were single wheels on each side of the rear used to steer the reachstacker and these are referred to as the steer wheels. The size of the front wheel was 18.00 x 25 with pneumatic tyres.
There was a daily checklist for the reachstacker, and maintenance work was logged on the Ricegrowers "SAP" system for action. Haconby was one of two contractors that serviced the reachstacker.
The descriptions of the parts of the reachstacker wheel assembly are described in the report of Dr Robert Casey, which is under tab 12 of exhibit A, and photographs thereof are under tab 5 and 6 of exhibit A.

THE INCIDENT ON 8 OCTOBER 2014

On 29 August 2014 Mr Booth attended the workplace, inspected the reachstacker and informed Mr Lieu that the tyres needed replacing.
On 8 October 2014 Mr Booth left the Roundabout workshop and went to the workplace at Ricegrowers. Mr Booth's plan was to remove all four front wheels on the reachstacker, load those onto his truck by forklift and then take the wheels to Roundabout where the old tyres would be removed from the rims and new tyres fitted.
On the day in question when Mr Booth arrived at the workplace, he signed in. Ricegrowers had in place a procedure requiring contractors to complete work permits prior to commencing work. Mr Booth did not undergo the work permit process. He had previously been inducted to the Ricegrowers site 6 or 8 months previously.
When Mr Booth found the reachstacker he jacked up the four front wheels and removed the wheel nuts and cleats on each outside wheel. He then tried to remove the right outside wheel. In doing so he was unable to remove the outside wedge band, so he hit it with a steel sledgehammer a number of times. As the wedge band would not move he called for a forklift on the UHF radio.
Mr East drove the forklift to the worksite and used it to try and lift the outside wheel away from the dual wheel assembly. Mr East and Mr Booth tried to do this for about 10 minutes but were unable to remove the wedge band. Mr East left to find someone else to assist and Mr Booth persevered in trying to remove the wedge band from the right outside wheel.
Mr East asked Mr Newton to attend the workplace. At Mr Booth's suggestion, Mr Newton put the forklift between the wheel assemblies but that also was unsuccessful in removing the wheels. Further attempts were made with the forklift to lift the wheels off the reachstacker but these too were unsuccessful.
Mr Booth then telephone his subordinate, Mr Blenkiron who was a tyre fitter employed by Haconby.
Mr Booth asked Mr Blenkiron for guidance as to how to remove the outside dual wheel, but as Mr Blenkiron had difficulty explaining what was required, he indicated that he would attend the workplace.
When he arrived at the reachstacker Mr Blenkiron told Mr Booth that the locking ring had to be removed before the whole wheel would come off the hub. He then returned to the workshop. Mr Newton then also departed the vicinity of the reachstacker.
About an hour or so later Mr Mace drove to the worksite on a forklift. He suggested that the tyres needed to be deflated. Both the right and left outside tyres were completely flat, however, the inside wheels were too close to the outer wheels and further attempts were made by Mr Booth and Mr Mace to deflate the inner tyres. These attempts were unsuccessful and Mr Mace ultimately suggested that Mr Booth persevere in hitting the wedge with a steel sledgehammer. Mr Booth continued to do so and Mr Mace drove off.
Mr Booth continued to hit the wheel rim with the sledgehammer. After he had hit it a number of times the wheel assembly blew off. It blew off with such force it hit him on his left hand side and the pressure pushed him backwards and he landed some 5 to 10 metres from the reachstacker. Fortunately he was not injured.
Mr Booth then telephoned Mr Liu to advise him that the inside rim was cracked and both rims would need replacing. Mr Booth told Mr Liu that he would continue with the job and Mr Liu indicated that he would attend the workplace after he had finished in a meeting.
Mr Booth also then telephoned the offices of Roundabout and spoke to Mr Luke Thommors (Mr Thommors). He told Mr Thommors that a tyre had 'let go' and threw him on his backside. Mr Thommors asked if Mr Booth needed any assistance but he indicated that he was alright.
Mr Booth then attended the left hand side of the reachstacker and tried to remove the wheels from that side. Mr Mace and Mr Newton both arrived back at the reachstacker as around the same time, with Mr Newton driving a forklift.
Mr Booth explained to Mr Mace and Mr Newton that the right outside wheel had come off and hit him.
Mr Booth showed Mr Mace the right inside wheel that was still on the reachstacker and Mr Mace said: 'It shouldn't have happened. I've worked on these tyres before.'
Mr Booth decided not to remove the inner valve core extension or depress the Schrader valve on the inner valve core extension from the left inner tyre.
It is agreed between the parties that this decision was made on the basis that as the right inner tyre had not deflated when the inner valve core extension was removed from it, the left inner tyre would also not deflate if the inner valve core extension was removed.
Mr Mace said: 'Do you want me to have a go with the sledgehammer?'
Mr Booth said: 'Yes.'
Mr Mace then used the steel sledgehammer to hit the rim about 4 times. On the last hit he missed the rim. He therefore lent down towards the head of the sledgehammer and made a half swing when the left inside wheel assembly blew off. The air in the tyre escaped rapidly causing the outside left wheel to come off with a great deal of pressure and hit Mr Mace in the head. He was pushed back about 10 metres by the force. The rim of the tyre of the outside wheel landed in a nearby ditch.
At the time the inner left wheel failed Mr Booth was standing behind Mr Mace in front of the left side wheel. Mr Newton was standing about 2 metres away from Mr Mace and was blown to the ground by the pressure from the tyres decompression when the inner right wheel let go.
Most tragically Mr Mace suffered fatal injuries in the incident.

SYSTEMS OF WORK BEFORE THE ACCIDENT

Bruce Holloway was unaware of the training that Haconby workers had in the removal and changing of tyres on the reachstacker, nor had he read the operation or maintenance manuals for the reachstacker. He had not carried out any risk assessment for the removal of the wheel assemblies from the reachstacker. He was however aware that to remove the wheel assemblies, the work involved jacking up the reach stacker, deflating the tyres and then remove the nuts. He considered that if the inside tyre was not deflated, the outside tyre should be removed so as to provide access to the valve on the inside tyre even if the inside tyre was still inflated. He has subsequently agreed that this is the wrong procedure.
Lee Holloway was not aware of the procedure as he had not spoken to Mr Booth prior to the incident, but he was aware that Mr Booth was going to Ricegrowers to attempt to bring the tyres into the workshop. He had never removed or changed the wheel assemblies on a reachstacker, nor was he familiar with the type of split rim fitted on a reachstacker.
Haconby workers were not trained specifically on the removal and changing of tyres on the reachstacker.
Mr Booth was experienced in the tyre industry having worked for Beaurepairs for many years and attained qualifications from TAFE and attended a Mobile Tyre Technicians unit. It was in fact Mr Booth that suggested that the unit would be a good training course for the Roundabout workers, and he in in fact was responsible for providing new and existing workers with training on their content. Mr Booth suggested that the Mobile Tyre Technicians unit be implemented as Safe Work Method Statements.
It is apparent from the Mobile Tyre Technician Units, the Hyster Operating Manual and the Hyster Periodic Maintenance Manual that the tyres must be deflated before removal of the wheel is attempted. This was also an industry wide standard. The Operating Manual also states that steel hammers are not to be used on the wheel.
Mr Booth was not aware of the contents of the Hyster Operating Manual or the Hyster Periodic Maintenance Manual as they were in the possession of Ricegrowers and not Haconby. Lee Holloway had also not seen or read either manual. As such, Lee Holloway did not issue any instructions to Mr Booth as to how the task was to be performed, but relied on his experience and training. He was not aware of the manner in which the task was to be attempted. Thus, even if Mr Booth has telephoned either of the Messrs Holloway due to their lack of knowledge, it is unlikely that he would have been any better off.
Haconby did not carry out a risk assessment for its staff for the removal of wheel assemblies from the reachstacker. Ricegrowers did not provide any risk assessments for the task of removing wheel assemblies from the reachstacker to Mr Booth, Haconby or its employees.

SUBSEQUENT ANALYSIS OF THE TYRE RIMS

Dr Robert Casey, a mechanical engineer, attended the Ricegrowers workplace on 30 October 2018 and he also attended the premises of SafeWork New South Wales at Londonderry to inspect the tyre assemblies on 18 December 2015. His report is part of Exhibit A.
Dr Casey was critical of the arrangement whereby there were two valves on the valve extension, normally there is only one valve which is at the tip. Dr Casey found that having two valves, one at the tip and another at the tyre end, made deflating the tyre problematic. He opined it can lead to a dangerous situation because removing the valve extension does not deflate the tyre. Dr Casey further opined that the left inside wheel rim failed because of the cracking in the rim and the failure to release the air from the inner tyre.
Dr Casey further reported that hitting the rim with the sledgehammer may have opened up a very large fatigue crack which progressed to final failure, wherein the crack grew rapidly and pushed the locking ring out of its groove, and that when the crack opened up it would not have done so with excessive force had the tyre been deflated.
At paragraph 67 Dr Casey described the following general sequence for the safe removal of tyres from split rim tyre assemblies as follows: '1. Jack the wheels clear of the ground. 2. Deflate the tyres. 3. Loosen and remove the wheel nuts. 4. Disassemble the split rims.'
Dr Casey described generally the disassembly of the split rims as follows: '1. Remove the locking ring. 2. Disassemble the large phalange and the bead seat. 3. The tyre is then free to be dismounted from the remainder of the split rim.'
Dr Casey described the general methods to deflate tyres as follows: '1. Completely remove the valve by rotating it counter clockwise using a special tool. 2. Listen for escaping air. 3. Once no more air can be heard the tyre is deflated.'

SYSTEM OF WORK AFTER THE INCIDENT

Roundabout and Edward River issued a ban on its workers undertaking tyre work on heavy industrial machines. Roundabout and Edward River provided refresher training to its workers about the importance of stopping a job if it cannot be done safely.
Since the sale of Edward River and Roundabout businesses, Haconby no longer performs any tyre related work.
In the affidavit of Lee Holloway (Exhibit 1), he deposes to the fact that Haconby should have had a work procedure in place that required the inside as well as the outside tyre to be deflated before any of the wheels were removed and if this could not be achieved, to stop work until a safe work method for deflating the inside tyre could be identified. He further deposes that Haconby should have trained Mr Booth on the procedure at paragraph 80(a) and ensured that he was aware of and followed the Hyster Periodic Maintenance Manual.
Roundabout and Edward River issued a ban on its workers undertaking tyre related work on heavy industrial machines. They also provided refresher training to its workers about the importance of stopping a job if it cannot be done safely.

Prior History

Haconby has not previously appeared before the court on health and safety matters.

Considerations

I have had regard to the objects set out in section 3 of the Act and I have had regard to section 3A of the Crimes (Sentencing Procedure) Act 1999 for the purpose of sentencing.

Objective Seriousness of the Offence

The proportionality principle requires that sentence should neither exceed nor be less than the gravity of the crime having regard to objective circumstances: Veen v R (No. 2) (1088) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton (2006) 66 NSWLR 566 at [15].
The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R (1998) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the time limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] MSWSC 432 at [61].
The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [89]. The question of foreseeability of the risk is to be determined objectively.
The Court of Criminal Appeal has recently examined the sentencing process with regard to the Work Health and Safety Act 2011 in the matter of Nash v Silver City Drilling (NSW) Pty Limited ; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96;93 NSWLR 338. His Honour Justice Basten at paragraph 34, under the heading 'Assessment of Risk' said: 'The sentencing judge commenced his consideration with the proposition that 'greater culpability attached to the failure to guard against an event the occurrence of which is extremely unlikely'. However the truth of that proposition depends upon other considerations including: (a) The potential consequences of the risk, which may be mild or catastrophic; (b) The availability of steps to lessen, minimise or remove the risk; and (c) Whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors.' Further at paragraph 42 his Honour continued: 'The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon and overall evaluation of various factors, which may pull in different directions.'
My findings about the defendant's level of culpability are based on the following: 1. Employees of the defendant's, including Mr Booth were placed at risk of serious injury or illness as a result of being struck by the split rim wheel assembly components of the reachstacker wheel as a consequence of the explosive disintegration (also known as "blow out") of a pressurised wheel assembly on the reachstacker. 2. The defendant failed to take reasonably practical measures to eliminate the risk, or minimise the risk if not reasonably practical to eliminate it. Haconby could have taken the following steps: 1. Have in place a work procedure for the removal of split rim dual wheel assemblies that required the inside tyre, as well as the outside tyre, to be deflated before attempting to remove the outside wheel or it's split rim wheel assembly components; 2. Have in place a work procedure where the inside tyre does not deflate, work is ceased until a safe work method for deflating the inside tyre can be identified; 3. Training and instructing workers who were tasked to remove split rim wheel assemblies, including Mr Booth, that both the inside and outside tyres were to be deflated before attempting to remove the tyres or the split rim wheel assembly components; and 4. Ensuring that it's tyre fitter, Mr Booth, was aware if and followed the procedures of the Hyster Periodic Maintenance Manual, in particular the procedures therein for the removal of wheels from lift truck, prior to undertaking the removing of the wheels of the reach stacker. 1. The risk was the risk of a person, who was not a worker within the meaning of section 19(1) of the Act, in particular Geoffrey Mace and Lindsay Newton, suffering serious injury or death as a result of being struck by the split rim wheel assembly components of the reachstacker wheel as a consequence of the explosive disintegration (also known as "blow out") of a pressurised wheel assembly on the reachstacker. 2. The defendant failed to ensure, so far as is reasonably practicable that the health and safety of Geoffrey Mace and Lindsay Newton were not put at risk, in that it failed to take one or more of the following reasonably practicable measures to eliminate, or at least minimise if not reasonably practicable measures to eliminate the risk; 1. Have a work procedure for the removal of split rim dual wheel assemblies that required the inside tyre, as well as the outside tyre, to be deflated before attempting to remove the outside wheel or its split rim wheel assembly components; 2. Have a work procedure where if the inside tyre does not deflate, work is ceased until such time that a safe work method for deflating the inside tyre can be identified; 3. Training and instructing workers who were tasked to remove split rim wheel assemblies that both the inside and outside tyres were to be deflated before attempting to remove the tyres or the split rim wheel assembly components; and 4. Ensuring that its tyre fitter, Mr Booth, was aware of and followed the procedures in the Hyster Periodic Maintenance Manual and in particular the procedure contained therein for the removal of wheels from lift truck prior to undertaking the task of removing the wheels of the reachstacker. 1. As a result of the defendant's failures, Mr Mace was exposed to a risk of death or serious injury and the fatal injuries sustained by Mr Mace were a manifestation of the risk. Whilst the outcome of the risk resulted in death, the assessment of objective seriousness is not based on the outcome. The death is however an aggravating factor. 2. As a result of the defendant's failures, Lindsay Newton was exposed to a risk of death or serious injury. 3. As at the date of the incident the "Managing the risks of plant in the workplace" Code of Practice dated July 2014 was in existence and specified that : 'Plant is a major cause of workplace death and injury in Australian workplaces. There are significant risks associated with using plant and sever injuries can result from the unsafe use of plant…..' 1. An incident very similar to the incident that killed Mr Mace had thrown Mr Booth to the ground earlier that day. Whilst Mr Booth did not tell either Bruce Holloway or Lee Holloway of the first incident, he did tell two employees of the Offender, being Mr Blenkiron and Mr Thommors, that he was having difficulties removing the tyres. The policy of Haconby should have been that when an issue arose the appropriate people would be told and that work would stop until a safe solution had been agreed upon. This did not occur. In this way, the first incident was effectively a warning as to what could occur, and yet no steps were taken to ensure that this event did not happen again. Unfortunately the risk remained. This makes the second summons a more serious offence, regardless of the outcome. 2. It was a common industry standard that tyres should be deflated before wheels on such heavy vehicles be removed. In Inspector Marie Davidson v Plasser Australia Pty Ltd [2009] NSWIRComm 79 (27 May 2009), a very factually similar case, Backman J stated at [20] as follows; 'It is common for large machines such as cranes, dump trucks, aircraft etc. to have split rim and tyre assemblies. Proper maintenance of the assemblies requires carefully devised procedures so that the very serious risks to safety be avoided. The risks attendant upon working with split rim and tyre assemblies are well known in the industry. The dangers of working on pneumatic tyres necessitates that measures be taken in the form of sustained and easily understood information, instruction, as well as adequate training. Failure to properly manage the risks may result in heavy penalties.'
In the circumstances, I find that the defendant's level of culpability is mid-range.

DETERRENCE

I accept that contrition and remorse could not be greater than in these circumstances. Mr Bruce Holloway has suffered significant psychological symptoms as a consequence of the death of Mr Mace. He has sought medical treatment for anxiety and depression and continues to do so. The businesses that Haconby ran, Roundabout and Edward River have been sold. There is no need for specific deterrence as the defendant has ceased doing any tyre work and sold the businesses that did.
In imposing a penalty in relation to this offence, general deterrence must be provided for. The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the Act very seriously. However, whilst general deterrence is a matter that I must consider in the sentencing process it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all factors. I am satisfied that the changes in management practices and there is evidence before me of those changes. It is conceded by the Prosecution that I can take this into account on sentencing.

AGGRAVATING FACTORS

The death of Mr Mace, whilst not to be considered in the assessment of the objective seriousness of the offences, is a matter that is an aggravating factor and I have considered as such.
Similarly, I have considered that whilst the directors of Haconby were not informed of the occurrence of the first incident, the incident did occur and should have served as a warning that the manner in which the tasks were being performed was unsafe. That should have led to the work being stopped, however it did not. The fact that two incidents occurred on the same day, performing the same tasks is in my view also an aggravating factor.

MITIGATING FACTORS

The defendant has no prior convictions having operated the business for over a number of decades.
The defendant indicated its intention to enter a plea of guilty at the earliest possible opportunity, thus accepting full responsibility for its actions. The defendant is therefore entitled to the full allowance with respect to the utilitarian value of the plea being 25%.
The defendant has demonstrated remorse for the offence, and has taken significant steps in updating the WHS systems, and equipped workers to ensure that similar incidents do not arise.
The defendant co-operated with the SafeWork NSW investigation.
The defendant makes contributions and donations to charities and supports local social enterprises.

TOTALITY PRINCIPLE

In Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 704, Kirby P said: The principle of totality is applicable where the penalty imposed is by way of fine: see R v Sgroi (1989) 40 A Crim R 197 at 203. However, it may be that the principle of totality may not have the same force in the case of the imposition of fines, as opposed to the imposition of imprisonment where it has a special operation: see R v Brown (1982) 5 A Crim R 404 at 407.
This approach was approved in EPA v Barnes [2006] NSWCCA 246.
I have noted the totality principle and made reductions accordingly.

COSTS

The defendant has agreed to pay the defendant's costs and disbursements as agreed or assessed.

PENALTY

My orders are: 1. The defendant is convicted. 2. The appropriate fine in matter number 297593/2016 is $300,000 but that will be reduced by 25% to reflect a plea of guilty. The appropriate fine in matter number 297574/2016 is $100,000 but that will be reduced by 25% to reflect a plea of guilty. 3. I impose a fine of $300,000 in total. 4. I order pursuant to s 122(2) of the Fines Act 1996 that 50% of that fine is to be paid to the prosecutor. 5. I order the defendant to pay the prosecutors costs as agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 August 2018

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Judgment (17 paragraphs)

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Cases Cited (9)