SafeWork NSW v Macquarie Milling Co Pty Limited ; SafeWork NSW v Samuels

Evidence for the defendants - Mr Morand

1. Mr Michael John Morand (Mr Morand) affirmed an affidavit on 15 March 2019. Mr Morand is the Work Health and Safety Manager (WHS Manager) at Macquarie Milling and has been in this role since March 2017. Mr Morand also worked at Macquarie Milling between September 2013 and May 2015 as a Mill Manager.
2. As Mill Manager, Mr Morand was responsible for the day-to-day running of the mill, scheduling production, organising repairs to the machinery, including the chaff cutter, product quality control inspections and supervising workers. When Mr Morand began in this role he documented employees' skill sets and drafted Safe Operating Procedures (SOPs) for the blocking plant. He also conducted training and induction of all workers, including Mr Morand, and toolbox meetings. Mr Morand deemed Mr Mullen competent to complete his duties as a Packer/Labourer on 13 November 2013.
3. In 2013, the training and induction of new workers involved going through an Induction Checklist and placing the new worker with a more experienced worker who would demonstrate how to use the machinery. A new worker would remain with their buddy for 2 to 3 weeks or until being deemed competent.
4. The chaff cutting machine was located behind a wall, with two access doors from inside the mill and a gate from the outside. The area inside the wall was known as a "danger zone". Each of these access doors was alarmed and acted as "kill switches" for the chaff cutting machine. If a door was opened, power to the chaff cutting machine would be cut and the machine would immediately stop.
5. The chaff cutting machine was operated from a control box, or teaser box, which was an elevated platform with visual access to the chaff cutting machine. Access to the teaser box was from outside the wall and was restricted by a railing on the side of the teaser box. However, on occasion, workers used a ladder to access the chaff cutting machine. This was contrary to the safety procedure as it by-passed the "kill switch" doors. When Mr Morand noticed a ladder in place, he would remove it and instruct workers not to use the ladder and to access the chaff machine through the "kill switch" doors. Mr Morand did this as the Mill Manager between 2013 and 2015. Clearly the practice was still going on in October 2016.
6. When he was Mill Manager, Mr Morand did not keep a register of workers' competency in operating the chaff cutting machine. Prior to the incident there was no documented SOP for clearing blockages in the chaff cutting machine. The procedure to remove a blockage was for the feeder or teaser operator to access the chaff cutting machine through one of the "kill switch" doors and use a small pitchfork to remove the blockage, while the machine was off. This procedure was relayed to new workers verbally when being supervised by an experienced worker, as many of the workers had low literacy skills and could not read.
7. During his time as Mill Manager, Mr Morand was not aware of any near misses or injuries arising in connection with the operation of the chaff cutting machine.
8. In 2017, Mr Morand returned to Macquarie Milling to conduct a comprehensive review and upgrade of the Work Health and Safety policies and procedures. He was also responsible for implementing and ensuring compliance with Macquarie Milling's obligations under the Act.
9. Mr Morand undertook a risk assessment for the operation and maintenance of all plant at the mill, including the chaff cutting machine. He drafted and implemented SOPs and SWMSs for all processes at the mill and drafted position descriptions for the different tasks associated with the chaff cutting machine. Mr Morand provided workers with copies of their position description and explained to them the relevant SOP and SWMS. Mr Morand then assessed all workers' competency to safely undertake their role in operating the chaff cutting machine.
10. Mr Morand drafted a 'Chaff Cutter - Induction and Training' procedure which has been implemented since the incident. He also drafted and implemented a SOP relating the operation of the chaff cutting machine, which has been provided to workers, and a SWMS for each task relating to the operation of the chaff cutting machine and for changing the knives on the chaff cutting machine. Each SOP for each task associated with the chaff cutting machine was also displayed in the relevant area of the mill.
11. The SOP warns that the chaff cutting machine must be turned off before clearing jams and that tools or hands should never be put into or near moving parts.
12. Macquarie Milling reviews its SOPs and SWMS annually or if legislative or organisational change requires a review.
13. Since the incident, Mr Morand has conducted an audit of all machines at the mill to identify areas requiring further guarding. Mr Morand provided a copy of the relevant Australian Standard to the maintenance department with instructions so guarding could be installed accordingly.
14. Macquarie Milling has now installed guarding on all moving parts of all machinery at the mill, including the chaff cutting machine. The guarding, as per the relevant Australian Standard, cannot be removed other than by mechanical means. In mid-2017, Safework inspectors attended the mill and inspected the guarding on all machinery and indicated that the guarding was appropriate. It is clear from the evidence of Mr Morand that the rotating shaft on the chaff cutting machine was not the only unguarded machinery at the mill.
15. Mr Morand assists Mr Wailes to prepare for monthly toolbox meetings and is available to Mr Wailes and employees who have questions regarding Work Health and Safety.
16. Mr Morand conducts an inspection at the mill when he is on-site to ensure workers are performing tasks correctly and safely. He will raise any concerns with Mr Wailes so they can be discussed at the next toolbox meeting.
17. Mr Morand has also drafted a procedure regarding managers' responsibilities regarding workplace incidents, accidents and injuries, including near misses. This procedure was in place at the time of the incident but was not formally documented. This procedure has been discussed with workers at a toolbox meeting. New workers are advised of this procedure during their induction when they first commence work with Macquarie Milling.

Evidence for the defendants - Mr Samuels

1. Mr Samuels affirmed an affidavit on 18 March 2019. He is the sole director of Macquarie Milling.
2. Mr Samuels purchased Macquarie Milling in May 1989. At this time, there were approximately 56 employees working at the mill. At present, the mill employs approximately 26 people. Many of the mill workers come from poor educational backgrounds and are illiterate. Mr Mullen had reasonable literacy skills.
3. Mr Samuels is responsible for the overall direction of the company, including keeping himself informed of the mill operations, stockfeed sales and expenditure.
4. Mr Samuels accepts that at the time of the incident Macquarie Milling did not have a documented SOP or SWMS regarding work being carried out on the chaff cutting machine.
5. It was and still is Macquarie Milling's practice to instruct workers 'on the job' how to undertake the tasks associated with the chaff cutting machine. Mr Samuels believes this is the most effective way to train workers in the operation of machinery as many of the mill labourers are illiterate.
6. Mr Samuels accepts that the risk of a worker sustaining serious injury from removing a blockage from the chaff cutting machine was not identified as a high risk activity. This was because the rotating shaft where the incident occurred was located in an area that was previously only accessible by entering the area of the machine through doors with kill switches. If the area was accessed, it was Macquarie Milling's practice to turn the machine off prior to cleaning or clearing the machine. Macquarie Milling should have conducted a risk assessment that identified the removal of blockages from the chaff cutting machine as a high-risk activity.
7. Since the incident, Mr Samuels became aware of the near miss incident involving Mr Towney and the same rotating shaft approximately 12 months before the incident. Mr Samuels and the Mill Manager were not informed of the near miss accident when it occurred.
8. Mr Samuels accepts that the risk posed by the rotating shaft should have been identified and a guard manufactured and installed over the rotating shaft of the chaff cutting machine. A written SWMS should have been developed for clearing blockages in the chaff cutting machine and should have been provided to workers prior to operating the machine, and a process should have been in place for workers to achieve competency in the safe use and cleaning of the machine. Macquarie Milling should also have implemented a comprehensive instruction and training program for all workers on the safe operation of the chaff cutting machine and the safe removal of blockages in the machine. Workers should have had their competency assessed prior to allowing them to operate the machine and clearing any blockages.
9. As the sole director of Macquarie Milling, Mr Samuels was the person who was ultimately responsible for ensuring the company met its WHS duties. Mr Samuels said that he failed to exercise due diligence and that he is sorry for failing to meet his WHS obligations.
10. The fence around the chaff cutting machine was removed in July 2015 as it had been identified as a fire safety hazard due to truck drivers throwing cigarette butts around the area, despite smoking being prohibited. Even before the removal of the fence around the chaff cutting machine, the rotating shaft was not guarded as the guard had been removed by a worker without Mr Samuel's knowledge.
11. Since the incident, Mr Samuels was advised that from time to time, the workers did not access the machine through the doors which activated the "kill switch". Instead, workers would descend from the teaser box via a makeshift ladder to the chaff cutting machine. Had Mr Mullen accessed the chaff cutting machine through the correct door which isolated the machine, the incident would not have occurred. Historically, maintenance fitters would remove the makeshift ladder. However, workers would later replace the ladder. Mr Samuels became aware of this practice after the incident.
12. Mr Samuels expressed regret on his own behalf and on behalf of Macquarie Milling that the incident occurred and for the distress created for workers, particularly Mr Mullen and his friends and family. Mr Samuels acknowledges that the incident could have been avoided if it had identified the risk and taken steps to reduce the risk. He accepts that he should have exercised greater due diligence regarding Macquarie Milling's WHS obligations.
13. On the day of the incident, Mr Samuels was working at the mill. He was approached by a worker who advised him that Mr Mullen has been involved in an accident and was injured. Mr Mullen went to the scene and was told an ambulance had been called. He then decided to drive Mr Mullen to the hospital himself as he thought it would be quicker than waiting for an ambulance. He remained at the hospital for around 4 hours to ensure that Mr Mullen was going to be alright and for his wife to arrive.
14. Following the incident, Mr Samuels telephoned Mr Mullen's wife a number of times requesting updates on Mr Mullen's condition and progress. All of those matters reinforce the view, expressed below, that Mr Samuels is genuine in his remorse and regret.
15. Mr Samuels and Macquarie Milling have cooperated with SafeWork in its investigations following the incident.
16. After the incident, SafeWork issued an Improvement Notice to Macquarie Milling and a guard for the rotating shaft was manufactured and installed. A toolbox meeting was held the day after the incident to discuss the incident and to develop a procedure for the safe performance of the removal of blockages. Staff were requested to report to Mr Samuels if a guard had been removed or was missing and it was communicated to staff that all machinery must be turned off prior to cleaning the machine.
17. After the incident, Mr Samuels organised for Mr Morand to conduct a comprehensive review and upgrade of Macquarie Milling's WHS policies and procedures.
18. To date, Macquarie Milling has spent approximately $90,000 on reviewing and upgrading its WHS policies and procedures. Macquarie Milling has renovated and extended the lunch room at the mill at a cost of approximately $80,000. This room is now able to accommodate the training and induction of workers.

Consideration

1. I have had regard to the objects in s 3 of the Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999.

Objective seriousness of the offence

1. The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v R (No. 2) (1998) 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].
2. 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 limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
3. The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] NSWSC 432 at [61].
4. 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.
5. The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.
6. 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 attaches to the failure to guard against an event the occurrence of which is probable rather than 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."
7. 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 an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."
8. At paragraph 53 his Honour dealt with the proper approach to considering the objective seriousness of offences under the Act, saying: "It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken."

Macquarie Milling - objective seriousness

1. Counsel for the defendants submitted that workers, including Mr Mullen, had developed a practice of accessing the area of the chaff cutting machine by climbing over a barrier from the teaser/control box and descending a makeshift ladder. By doing so, the workers circumvented the "kill switch" doors. Maintenance fitters, and Mr Morland, would remove the makeshift ladder from time to time, but the operators continued to replace it and use it.
2. Counsel for the defendant submitted that the use of the makeshift ladder by Mr Mullen and other employees should be taken into account to somehow reduce the objective seriousness of the offence. Counsel for the prosecutor submitted that, if anything, the repeated use of the makeshift ladder increased the objective seriousness of the offence.
3. Persons with a work health and safety duty under the Act must have regard to the fact that sometimes workers will not take sufficient care for their own safety. They also have to take account of the fact that it is human nature to take short cuts, particularly to get a job done quicker or more effectively.
4. It is concerning that besides removing the makeshift ladder from time to time, and instructing employees that they were not to use it, the practice continued. Clearly stronger measures were called for on the part of the defendants.
5. It is also concerning that Mr Morland, who saw the makeshift ladder and had it removed on several occasions, failed to notice that the rotating shaft was unguarded. He must have been in reasonably close proximity to the rotating shaft of the machine when he took action in relation to the makeshift ladder. The evidence did not explain why Mr Morland failed to notice that obviously dangerous aspect of the chaff cutting machine.
6. I find that the use of the makeshift ladder, a practice which led to workers being exposed to increased risk, and which continued over a long period of time without strong enough action being taken, does not decrease the objective seriousness of the offence. In my view it increases the objective seriousness.
7. My findings about Macquarie Milling's level of culpability are based upon the following: 1. Employees of Macquarie Milling were placed at risk of death or serious injury. The risk of a worker being dragged into the unguarded rotating shaft was obvious, identifiable and foreseeable; 2. The existence of the risk was known or should have been known as the risk was identified in: 1. SafeWork NSW Code of Practice Managing the risks of plant in the workplace; 2. Australian Standard, AS 4024 (Series) Safety of Machinery; 1. Simple remedial steps were available which would have completely avoided the risk. Firstly, the rotating shaft should have been guarded. Secondly, machine operators should have been prevented from accessing the shaft area of the machine while the machine was still running; 2. The likelihood of the risk coming home was quite high, as not only was the shaft rotating, but it had protruding bolts which could easily catch upon clothing worn by an operator; 3. The injuries sustained by Mr Mullen were a manifestation of that risk; 4. Macquarie Milling should have foreseen the risk. I find this because: 1. there had been a previous incident regarding a worker being dragged into the rotating shaft; 2. Macquarie Milling had previously been prosecuted in respect of a similar incident; 3. Macquarie Milling had been served with a large number of improvement and prohibition notices in relation to the guarding and safety of machinery at its premises; 1. Macquarie Milling failed to have any documented SOP or SWMS for clearing blockages on the chaff cutting machine; 2. Macquarie Milling failed to have any documented SOP or SWMS requiring the machine to be switched off before a blockage was cleared; 3. There was no assessment of competency of workers in operating the chaff cutting machine prior to the accident; 4. A dangerous practice had developed of workers bypassing the doors (and the kill-switch) to access the chaff cutting machine via a ladder, but this practice was not effectively prevented.
8. I find that the level of culpability of Macquarie Milling is in the mid-range.

Roland Albert Samuels - objective seriousness

1. My findings about Mr Samuel's level of culpability are based upon the following: 1. Mr Samuels failed to exercise due diligence to ensure that Macquarie Milling undertook a risk assessment which identified that the removal of blockages from the chaff cutting machine was a high risk activity; 2. Mr Samuels failed to exercise due diligence to ensure there was an adequate system in place to ensure he would become aware of any near misses; 3. Mr Samuels failed to exercise due diligence to ensure that a SOP or SWMS was developed for the task of removing blockages from the chaff cutting machine; 4. Despite being present at the mill, Mr Samuels failed to gain an understanding of the hazards and risks arising from the guard covering the chaff cutting machine being missing; 5. Despite being present at the mill, Mr Samuels failed to gain an understanding of the hazards and risks arising from the workers accessing the chaff cutting machine via a ladder, thus bypassing the kill-switches.
2. I find that the offender's level of culpability of Mr Samuels is in the lower half of the mid-range. To some extent Mr Samuels was let down by the managers below him.

Deterrence

1. 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 Limited v Nash (2016) NSWCCA 37 at [180].
2. The penalty must reflect the need for specific deterrence. The offender is still conducting a business. Its operations involve the continuing use of milling machinery, which is potentially dangerous to operators if duties under the Act are not observed.

Aggravating factors

1. The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999.
2. Counsel for the prosecutor submitted that an aggravating factor was that Mr Muller was a vulnerable person. Section 21A(2)(l) provides that the court may take into account as an aggravating factor the following: "The victim was vulnerable, for example, because the victim was very young or very old or had a disability, because of the geographical isolation of the victim or because of the victim's occupation (such as a person working at a hospital (other than a health worker), taxi driver, bus driver or other public transport worker, bank teller or service station attendant)."
3. Counsel for the prosecutor relied upon paragraph [53] of the decision of Beazley P in Attorney General for the State of New South Wales v DSF Constructions Pty Ltd [2019] NSWCCA 33. Her Honour expressed the view that "a person who is entirely or substantially reliant upon others for ensuring their health and safety is vulnerable to any non-compliance with any safety precautions and obligations prescribed by statute". Her Honour said that there had been no argument on the point and that she did not consider it appropriate to include that factor as a matter of aggravation. Clearly her remarks were obiter dicta. Justices Fullerton and McCallum expressed no view on the issue.
4. Counsel for the defendant pointed to the decision of the Court of Criminal Appeal in R v Williams [2005] NSWCCA 99. At paragraph [41] the court said that s 21A(2)(l) is not directed to vulnerability in any generalised sense. The examples set out in the sub-paragraph suggest that "it is vulnerability of a particular kind that attracts its operation".
5. In the context of a prosecution under the Act, it would be strongly arguable that a person who had a language difficulty and who had no training in the operation of a particular machine, was vulnerable within the meaning of the provision. The submission for the prosecutor went further. Counsel for the prosecutor submitted that Mr Mullen, like every other worker in the mill, was vulnerable if safety standards were not observed by the employer. As counsel for the defendant pointed out, this would mean that vulnerability was an aggravating factor in almost every prosecution under the Act.
6. Mr Mullen had been working at the mill for some time before this accident. He did have on-the-job training and he had quite a period of experience in working the chaff cutting machine. I find that he was not vulnerable within the meaning of the provision, and that vulnerability is not an aggravating factor on sentence in the present case.

Mitigating factors

1. Both offenders are otherwise of good character: s 21A(3)(f) of the Crimes (Sentencing Procedure) Act 1999. The steps which the offenders took after the incident demonstrate this. Mr Samuels has been operating the business of Macquarie Milling since 1989.
2. Both offenders have good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offenders have taken positive steps to guard against the risk of an incident such as this ever happening again. The offenders have brought their documentation and procedures into line with those which, on all the evidence, should have been in place before this accident occurred. Certain of the orders I propose to make will reinforce these matters.
3. Both offenders have shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. They have provided evidence that they have accepted responsibility for their actions and have acknowledged that the injury to Mr Mullen was caused by their actions.
4. The offenders entered a plea of guilty: s 21A(3)(k) Crimes (Sentencing Procedure) Act 1999. The court must take into account the fact that the offender has pleaded guilty, when the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) Crimes (Sentencing Procedure) Act 1999. It is appropriate to give both offenders a 25% discount for an early plea. The plea was entered upon the filing of an Amended Summons and an Agreed Statement of Facts.
5. The offenders gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. The offenders co-operated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to pay a fine

1. I am required to have regard to s 6 of the 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.
2. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 the Court of Criminal Appeal said: "First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to 'the means' of the defendant, pursuant to s 6 of the Fines Act 1996."
3. There was no submission about capacity to pay, so this issue does not arise.

Relevance of insurance policy

1. It was established by the evidence that both Macquarie Milling and Mr Samuels had an insurance policy which would indemnify them for any fine ordered by this court or for any costs in favour of the prosecutor. There was an excess of $10,000 for each insured under the policy.
2. Counsel for the prosecutor referred the court to the decision of Hillman v Ferro Con (SA) Pty Limited (In Liq) [2013] SAIRC 22 and H & S Chisholm Farms Limited v Waikato Regional Council [2018] NZHC 1885. Those cases held that any insurance against fines held by the defendant was relevant to sentencing. No doubt that is so, in that it removes capacity to pay as an issue for determination.
3. Counsel for the prosecutor also submitted that the existence of insurance was relevant to consideration of the appropriate fine. Counsel submitted that the existence of the indemnity in effect relieves the defendants from the legal consequences of their actions, if the penalty is a fine. It was also submitted that the existence of insurance meant that there was no genuine remorse, as the defendants were not accepting responsibility, at least in a financial sense, for their conduct. I have earlier found to the contrary.
4. Finally, counsel for the prosecutor submitted that the existence of insurance was relevant to additional sentencing orders sought in the written submissions. This matter will be dealt with separately below.
5. So far as its impact upon the appropriate fine is concerned, I am of the view that the existence of insurance is a neutral matter. Once it is understood that the insurance policy means that a personal burden is not being imposed on the defendants by a fine (except by way of the excess), there is no reason to adjust the fine upwards, since it is not effectively being imposed on the defendants themselves. However, the existence of the insurance policy is not a reason to adjust the fine downwards either. Part of the sentencing process, and one of the objects of sentencing, is to prevent crime by deterring the offender and other persons from committing similar offences - s 3A(b) Crimes (Sentencing Procedure) Act 1999. The District Court publishes on Caselaw each and every sentencing judgment under the Act. Thus the industrial community is informed of the significant penalties imposed for offences under the Act, which in theory should have a deterrent effect on persons other than the offender. Further, additional purposes of sentencing include to denounce the conduct of the offender, and have recognised the harm done to the victim of the crime and the community - s 3A(f) and (g) Crimes (Sentencing Procedure) Act 1999.
6. I therefore propose to set the fines for Macquarie Milling and for Mr Samuels without adjustment for the existence of the insurance policy.

Costs

1. The parties have agreed to an order that the offenders are to pay the prosecutor's costs agreed in the amount of $37,500. I will make orders against both offenders, but the prosecutor is only entitled to recover $37,500 in total.

Additional orders apart from fine

1. Section 235 of the Act provides that orders may be made in addition to any fine that may be imposed. Such orders can be adverse publicity orders under s 236 of the Act, orders for restitution under s 237, work health and safety project orders under s 238, a work health and safety undertaking under s 239, an injunction under s 240 or a training order under s 241.
2. In written submissions, counsel for the prosecutor set out additional orders which the prosecutor sought. The orders proposed by the prosecutor are set out in Attachment A to the prosecutor's written submissions (MFI 1). The orders include a training order pursuant to s 241 of the Act, a WHS project order pursuant to s 238 and a WHS undertaking pursuant to s 239. The scheme of the orders proposed is that Mr Samuels himself would undertake a course in due diligence training, pursuant to s 241 of the Act, within six months. Then within two months of completion of that training order, Mr Samuels would have to, under a WHS project order pursuant to s 238 of the Act, prepare a work health and safety due diligence plan. Within two months of completion of that plan, there would be a meeting with the SafeWork NSW Inspectorate, to review and finalise the due diligence plan. Finally, the case would be adjourned for 12 months to a date specified by the court, so that the court could be satisfied, pursuant to a WHS undertaking under s 239 of the Act that the training order and the WHS project order have been satisfactorily complied with.
3. Mr Samuels in his affidavit indicated that he was willing to comply with a training order pursuant to s 241 of the Act and with a WHS project order under s 238 of the Act. Counsel for the defendant opposed the making of a s 239 WHS undertaking order.
4. I find that the evidence discloses a need for the making or such orders. My finding is based upon the following: 1. Macquarie Milling has a prior conviction of a similar nature to the present charge; 2. Macquarie Milling has a significant history of inspectors finding that machinery on the premises was unsafe; 3. Over the years a disturbingly high number of prohibition notices and improvement notices have been issued to Macquarie Milling; 4. The guarding over the rotating shaft had been removed many years before the accident occurred to Mr Mullen; 5. Mr Morland did not notice that the guarding was absent from the rotating shaft, even though when he removed the makeshift ladder from time to time, he must have been in the vicinity of the unguarded rotating shaft; 6. When Mr Morland came back into the employ of Macquarie Milling in 2017, his inspection of the factory disclosed that there were other machines which should have had guards, but which did not; 7. The mere existence of the insurance policy is not a factor.
5. Until this accident occurred to Mr Mullen, the safety standards in the Macquarie Milling premises were quite poor. So were the methods of training and instruction. The written safety documentation for the factory was virtually non-existent. This was in spite of the fact that Macquarie Milling operated business premises where there are a large number of mechanical machines, many of which were unguarded and could have done significant injuries to operators.
6. I raised with both counsel during oral submissions two practical matters. The first matter was whether any training should be conducted at the Macquarie Milling premises in Dubbo or in Sydney. I expressed the view that it would be far more beneficial to have on-site training at the mill, where such training could be tailored to the conditions to be observed by the trainer. The second matter concerned the involvement of SafeWork in the implementation of any orders. Counsel for the prosecutor indicated that SafeWork would be willing to go and inspect the premises, after implementation of the training plan and the WHS project. Subject to adjusting the draft orders put forward by the prosecutor to take into account those two practical considerations, I propose to make orders in the terms sought by the prosecutor.
7. Such orders are commonly made in other jurisdictions but not in New South Wales. Judge Scotting of this court made similar orders in SafeWork NSW v Wu and Zenger (Aust) Pty Limited [2018] NSWDC 211. Counsel for the prosecutor in these proceedings also appeared in Wu and Zenger. Those matters recently came back before Judge Scotting, and evidence was presented that the orders had been complied with and had, in effect, been a success. I find that these proceedings are appropriate cases in which to make similar orders.

Penalty

1. My orders in relation to Macquarie Milling are: 1. The offender is convicted. 2. The appropriate fine is $240,000 but that will be reduced by 25% to reflect the plea of guilty. 3. Order the offender to pay a fine of $180,000. 4. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 5. Order the offender to pay the prosecutor's costs in the amount of in the amount of $37,500.
2. My orders in relation to Mr Samuels are: 1. The offender is convicted. 2. The appropriate fine is $30,000 but that will be reduced by 25% to reflect the plea of guilty. 3. Order the offender to pay a fine of $22,500. 4. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 5. Order the offender to pay the prosecutor's costs in the amount of $37,500. 6. Order pursuant to s 241 of the Work Health and Safety Act 2011 that: 1. Mr Samuels is to undertake a course in due diligence training for senior managers and company directors, within six months of the date of these orders; 2. Mr Samuels is to undertake a course in work health and safety risk management for supervisors and managers, within six months of the date of these orders; 3. The courses referred to in (6)(a) and (6)(b) above are to be conducted by a provider that is a Registered Training Organisation; and 4. The courses referred to in (6)(a) and (6)(b) above are to be conducted on site at the premises of Macquarie Milling, if such on-site courses are available. 1. Order pursuant to s 238 of the Work Health and Safety Act 2011 that: 1. within two months of completion of the Training Order set out in paragraph 6 above, Mr Samuels is to prepare a work health and safety due diligence plan (Due Diligence Plan) for the officers of Macquarie Milling Co Pty Limited, in particular himself, which outlines how the lessons learned through the Training Order in paragraph 6 above have been (or will be) implemented in the workplace, and in particular how the officers of Macquarie Milling Co Pty Limited will take steps to: 1. acquire and keep up-to-date knowledge of work health and safety matters; 2. gain an understanding of the nature of the operations of the business or undertaking of Macquarie Milling Co Pty Limited, and generally of the hazards and risk associated with those operations; 3. ensure that Macquarie Milling Co Pty Limited has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business; 4. ensure that Macquarie Milling Co Pty Limited has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information; and 5. ensure that Macquarie Milling Co Pty Limited has, and implements, processes for complying with its duties or obligations under the Act. 1. within two months of the completion of the Due Diligence Plan, arrange and attend a meeting with the SafeWork NSW Inspectorate, to review and finalise the Due Diligence Plan. 1. Pursuant to s 239 of the Work Health and Safety Act 2011, Mr Samuels is to enter into a work health and safety undertaking on the following conditions: 1. The matter is adjourned to Friday, 3 April 2020 and Mr Samuels is to appear on that date; 2. Mr Samuels is to appear before the court if called on to do so during the term of the adjournment; 3. Mr Samuels is not to commit any offence under the Act during the term of the adjournment; 4. Mr Samuels is to complete the Training Order in Order (6) above, and is to provide evidence of its completion to the court on the next occasion; 5. Mr Samuels is to complete the WHS project order in paragraph (7) above, and is to provide evidence of its completion to the court on the next occasion; 6. Mr Samuels is to notify the SafeWork NSW Inspectorate when he has completed the Training Order and the WHS Project Order to give the Inspectorate sufficient time to attend the premises of Macquarie Milling Co Pty Limited and satisfy itself that the orders have been completed, and the operation being conducted at the premises complies with the Act; 7. Mr Samuels is to notify the Prosecutor, and the Registrar of the District Court at the Downing Centre of any change of address for service. 1. Liberty to apply if there is any difficulty in the performance of these orders or if the parties wish to change the date in 8(a) above.

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: 11 April 2019