SafeWork NSW v Rex Australia Pty Ltd; SafeWork NSW v Wei Wang

Judgment

1. This case arises from an incident which occurred on 11 September 2018 on the factory floor of a glass wholesaler. As a worker was walking between an unloading table and a forklift, another worker lifted a trolley carrying unsecured glass panels on the tines of the forklift. The trolley fell forward from the tines of the forklift, causing unsecured glass panels to fall and strike the worker.
2. Rex Australia Pty Ltd ("Rex") has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (NSW) ("the Act") it failed to comply with that duty and thereby exposed Mr Lafaele Mulipola to a risk of death or serious injury contrary to s 32 of the Act.
3. The maximum penalty for the offence is a fine of $1,500,000.
4. Mr Wei Wang has pleaded guilty to an offence that being an officer of Rex, a corporation which was a person that had a work health and safety duty pursuant to s 19 of the Act, he failed to comply with his duty under s 27(1) of the Act to exercise due diligence to ensure that Rex complied with its duty under s 19(1) of the Act, and the failure to comply with his duty exposed Mr Lafaele Mulipola to a risk of death or serious injury, contrary to s 32 of the Act.
5. The maximum penalty for the offence is a fine of $300,000.

The Risk

1. The risk is described in the Summonses as follows: "The risk was the risk of workers, in particular Mr Mulipola, suffering death or serious injury as a result of being struck and/or crushed by an unsecured load being lifted by a forklift."

Reasonably Practicable Measures

1. Paragraph 12 of the Rex Summons pleads particulars of the failure of Rex to comply with the duty under s 19(1) of the Act as follows: "12. The defendant failed to ensure, so far as is reasonably practicable, the health and safety of workers, in particular Mr Mulipola, in that it failed to take one or more of the following reasonably practicable measures, to eliminate, or alternatively minimise, if it was not reasonably practicable to eliminate, the risk: a. Conducting and documenting a risk assessment, or conducting and documenting an adequate risk assessment, on the task of transporting panels that had been unloaded from the machine, which: (i) Identified the risks associated with the task; (ii) Assessed the risks; and (iii) Identified the most effective control measures that should be implemented to control the risk; Such a risk assessment would have identified the risk of workers being struck or crushed by an unsecured load from a forklift, the unsuitability of a forklift for the task, and allowed consideration of how the task could be undertaken safely; b. Developing, implementing and enforcing a policy for the safe use of forklifts at the workplace that: (i) Prohibited the use of forklifts in the workplace during standard working hours, unless strictly necessary; (ii) Required a Traffic Management Plan (TMP) to be followed to separate workers from mobile plant; and (iii) Prohibited using forklifts to transport loads that were not secure or where the weight of the load was not evenly distributed, such as A-frame trolleys; c. Developing, implementing and enforcing a TMP at the workplace that: (i) Prohibited the use of forklifts in the workplace during standard working hours, unless strictly necessary; (ii) Specified controls for when forklifts were required to be used to ensure workers were separated from them during operation; (iii) Established an exclusion zone around the unloading area of the machine and specified that no one was to access the area during production, trolley loading and trolley changeovers; and (iv) Required workers to wear high visibility clothing; d. Developing, implementing and enforcing a safe operating procedure for transporting glass from the unloading area, which specified: (i) Forklifts were prohibited from lifting and transporting trolleys; and (ii) Set out a procedure for transporting trolleys from the unloading area that specified: i. Workers were to stand in a designated safe zone during production, trolley loading and trolley changeovers (and were prohibited from entering the exclusion zone); and ii. The glass was to be loaded evenly on both sides of A-frame trolleys and was not to exceed the rated load capacity of the trolleys; and iii. The glass was to be secured to the trolleys with bars or locking brackets; and iv. The trolleys were to be manually rolled to the next stage of production; e. Providing information, training and instruction to workers in the policy for the safe use of forklifts, the TMP and the procedure for transporting the glass from the unloading area; f. Providing supervision, or adequate supervision, of workers to ensure compliance with the policy, the TMP and the procedure for transporting the glass from the unloading area; g. Implementing an exclusion zone around the unloading area of the machine to restrict workers accessing it during production, trolley loading and trolley changeovers, for example chains to prevent access and/or painted lines on the factory floor."
2. The Wang Summons pleads that Mr Wang had a duty to exercise due diligence under s 27(1) of the Act which included taking reasonable steps to: 1. Ensure that the company had available for use, and used, appropriate resources and processes to eliminate or minimise risks to safety from work carried out as part of the conduct of the business. 2. To verify that such resources and processes were provided and used.

Background

1. The parties presented an Agreed Statement of Facts (PX 1, Tab 1) and this material is summarised below.
2. Rex conducted a business as a glass wholesaler, processing and manufacturing glass products. Rex operated its business under the trading name K & K Glass.
3. Mr Wang was the Managing Director and was responsible for managing all aspects of the business, including production, work health and safety, financial expenditure, and administration. Mr Wang attended the workplace one to three days per week except when he was travelling overseas or unwell. At the time of the incident on 11 September 2018 Mr Wang was in China. The day-to-day operations of the factory were managed by two Production Managers who reported to an Operations Manager.
4. At all material times, Rex employed the following persons: 1. Mr Maurice Fitzgerald as the Operations Manager. 2. Mr Stewart Wareing as a Production Manager. 3. Mr Jason Dang as a Production Manager/Supervisor. Mr Dang managed a team of about 14 people, including Mr Jin Hui Shen and Mr Lafaele Mulipola. 4. Mr Mark Zhou as the Equipment Manager. 5. Mr Luke Docherty as the Dispatch Manager. 6. Mr Shen was a Water Jet Operator. Mr Shen held a forklift license and operated a forklift at the workplace from time to time. 7. Mr Mulipola was a Machine Operator. Mr Mulipola had worked for Rex for approximately seven years and was the main operator of the Double Edge and Wash line machine.

Double Edge and Wash Line Machine

1. In February 2017, Rex purchased a "Double Edge and Wash" line machine ("machine") to manufacture glass panels. The machine was purchased from China and was installed in or around February 2017. The machine replaced a similar machine. The machine was assembled by engineers from the Chinese manufacturer with assistance from Mr Zhou.
2. The machine consisted of different components including a feed table, two edging machines, a wash machine and a glass unloading table. Glass panels were placed onto the feed table and once processed were removed from the unloading table manually by hand and placed on A-frame trolleys. Workers pushed the trolleys to the next stage of the production line for further treatment.
3. In August 2018 an automated system was installed by the manufacturer on the machine for removing glass panels from the unloading table. The system comprised of a robotic unloading arm, a rail assembly system and two L-frame trolleys. The rail assembly system consisted of floor mounted rails (similar to train tracks) which were raised slightly above the factory floor. The rails were cut into the concrete so as not to protrude or cause a trip hazard.
4. The automated system, operated by the robotic arm lifting glass panels from the table and placing them on to L-frame trolleys, mounted on the rail assembly system. Once a trolley was loaded it moved on the rails to a different position, enabling a second trolley to be loaded.
5. The previous machine, which Mr Mulipola had operated, did not have an automated unloading system. The processed glass was manually removed from the unloading table onto A-frame trolleys.
6. At the time of the incident, on 11 September 2018, the machine had not been fully commissioned.

Removal of the Rail Assembly System

1. In or around late August 2018 to September 2018, Mr Dang expressed concern to Mr Wang about the rail assembly system and requested that it be removed.
2. The concerns related to the lack of space in the workplace, which interfered with the safety of workers operating nearby machines, and that the level of production at the workplace necessitated more than two trolleys. Mr Wang directed Mr Zhou to remove the rail assembly system.
3. A number of discussions took place between the senior employees regarding the removal of the rail assembly system and the introduction of a revised procedure for receiving and transporting panels that had been automatically unloaded by the robotic arm. These discussions took place between Mr Wang, Mr Zhou, Mr Fitzgerald, Mr Wareing, Mr Docherty and Mr Dang.
4. A revised procedure was trialled, as follows: 1. Timber blocks were placed on the ground in the unloading area. 2. A pallet jack lifted and placed an A-frame trolley onto the timber blocks. The purpose of placing the trolley on the timber blocks was to ensure that the trolley was at the correct height to receive the panels from the robotic arm and to prevent movement of the trolley during the unloading process. 3. Glass panels were automatically unloaded from the table to one side of the A-frame trolley. 4. The pallet jack was lowered and removed. 5. A forklift was used to transport the trolley approximately three metres. The tines of the forklift were placed under the trolley and between the wooden blocks. The forklift lifted the trolley and moved it away from the unloading area. 6. The forklift placed the trolley on the ground, where it was manually pushed by workers to the next stage of the production line for further treatment.
5. The "L-frame" trolleys were removed from the rail system and the revised procedure was implemented. Rex intended to monitor the revised procedure and improve it, in particular by replacing the wooden blocks with a clamp system designed to hold the trolleys in place while they were being loaded. Rex provided training to its workers on the revised procedure and how to position the trolleys for loading by the automatic arm. Rex instructed the forklift drivers to tilt loads back towards the driver once lifted into position. Workers, including Mr Mulipola, had been told not to stand in front of operating forklifts carrying loads, but to walk beside the trolley when it was lifting and transporting loads. During the lifting and movement of the trolley by the forklift, Mr Mulipola would stand to the side of the load and hold the glass panels to ensure they did not fall due to the vibrations of the forklift. Plastic tape was available for use at the workplace which could have been used to secure glass panels to A-frame trolleys for transportation. Prior to the incident Mr Mulipola had not secured the glass panels to the A-frame trolley using plastic tape.
6. Prior to the incident, the revised procedure had been in place for two to three weeks and it was undertaken seven to eight times per day.
7. Mr Dang supervised the task approximately six times prior to the incident. When supervising the task, Mr Dang checked to see that the mast of the forklift was tilted back towards the driver, to minimise the risk of the load falling forward towards the unloading table. Prior to 11 September 2018, Mr Dang observed the revised procedure being carried out without incident.

The Incident

1. On 11 September 2018, the machine had finished its cycle and approximately 18 to 20 glass sheets had been automatically unloaded onto one side of an A-frame trolley. The weight of the loaded trolley was approximately 700kg.
2. Mr Mulipola asked Mr Shen to collect the A-frame trolley for transportation to the next stage of the production line. Mr Mulipola was not wearing high visibility clothing.
3. Mr Shen drove the forklift to the unloading area. Mr Shen positioned the tines of the forklift under the trolley. Mr Mulipola told Mr Shen to wait until he was ready to lift the trolley. Mr Mulipola walked to a different part of the machine and was in the process of returning to assist Mr Shen, in particular by holding the glass panels as they were lifted and moved by the forklift.
4. As Mr Mulipola was walking between the unloading table and the forklift, Mr Shen lifted the trolley on the tines of the forklift. The trolley fell forward from the tines of the forklift causing the unsecured glass panels to fall and strike Mr Mulipola.
5. Mr Mulipola was pinned against the unloading table by the weight of the A-frame trolley and glass panels. Mr Mulipola was extracted from his position with assistance from other workers.
6. Mr Mulipola was conveyed to hospital by ambulance.

Injuries

1. As a result of the incident, Mr Mulipola sustained acute transverse fractures to his 11th and 12th ribs, three non-displaced acute fractures to the right transverse processes of his L2 and L3 vertebrae, a 14mm arterial enhancing ovoid subcapsular lesion and subcutaneous soft tissue contusion to his right lower back and right upper gluteal region. Mr Mulipola returned to work on 26 September 2018 undertaking suitable duties. Mr Mulipola was certified fit to return to his pre-injury duties on 19 October 2018. Mr Mulipola continues to work with the business.

Legal Obligations and Guidance Materials

1. Rex had duties under cll 34-38 of the of the Work Health and Safety Regulation 2017 ("WHS Regulation") to identify reasonably foreseeable hazards that could give rise to risks to safety, to eliminate or minimise them so far as was reasonably practicable, and to ensure that control measures were implemented and maintained.
2. Rex had a duty to manage, in accordance with Part 3.1 of the WHS Regulation, risks to safety associated with an object falling on a person if the falling object is reasonably likely to injure the person. Rex was obliged to manage the risk by eliminating it so far as is reasonably practicable (cll 54 and 35 of the WHS Regulation).
3. As the person with management and control of the forklift, Rex had a duty to ensure the forklift was: 1. equipped with lifting attachments suitable for the load to be lifted or moved. 2. operated in a manner that ensured that the risks to the operator of the forklift and other persons at or near the workplace that arise from systems of work and the environment in which the forklift is used are eliminated so far as is reasonably practicable, or if it is not reasonably practicable to eliminate the risks, minimised the risks so far as is reasonably practicable (cl 218(1) of the WHS Regulation).
4. Prior to the incident, the following industry guidance material had been published and was available to Rex: 1. The SafeWork NSW "How to Manage Work Health and Safety Risks Code of Practice", dated December 2011, relevantly provided: 1. A risk assessment should be done when there is a lack of understanding about how the hazards may interact with each other to produce new or greater risks and when changes at the workplace occur that may impact on the effectiveness of existing control measures (p 9); 2. Duty holders must choose the control that most effectively eliminates the hazard or minimises the risk in the circumstances. This may involve a single control measure or a combination of different controls that together provide the highest level of protection that is reasonably practicable (p 13); 3. Duty holders must always aim to eliminate a hazard, which is the most effective control. If this is not reasonably practicable, they must minimise the risk by working through the other alternatives in the hierarchy (p 14); 4. The most effective control measure involves eliminating the hazard and associated risk. The best way to do this is by not introducing the hazard into the workplace (p 14); 5. The Code provides guidance on how to develop and implement control measures and ensure they remain effective. 1. The SafeWork NSW "Managing the Risk of Plant in the Workplace Code of Practice", dated July 2014, which provides guidance to duty holders who have management or control of plant in the workplace. The Code relevantly provided: 1. If you intend to alter the design of the plant, change the way the plant is used or change a system of work associated with the plant, you should carry out the risk management process again. If you intend to use plant in a different way, you must ensure that the risks associated with the new use are assessed by a competent person (p 17); 2. Prior to making any alterations to plant you should consult with the designer and manufacturer to ensure all relevant safety issues have been considered. Any alterations you make to the plant will result in you assuming the obligations of a designer or manufacturer (p17). 1. The SafeWork Australia "General Guide Workplace Traffic Management" dated July 2014 (PX 1, Tab 13) provided the following relevant information: 1. To control risks associated with traffic management the first thing to consider is whether hazards can be completely removed from the workplace. For example, risks can be eliminated by physically separating pedestrian routes from vehicle areas. If it is not reasonably practicable to completely eliminate the risk then consideration should be given to substituting the hazard with something safer, eg replacing forklifts with other load shifting equipment like a walker stacker or pallet jacks; 2. The best way to protect pedestrians is to make sure people and vehicles cannot interact. 1. The SafeWork Australia "General Guide for Industrial Lift Trucks" dated July 2014 provided the following relevant information: 1. The weight, shape, size and composition of a load can change the way it can be lifted safely; 2. Loads should be firmly placed against the carriage or back-rest with the mast tilted back enough to stop the load slipping, falling or rolling off the fork arms. Loads that have the ability to slip, fall or roll off the fork arms or pallet should be restrained with straps or similar. 1. The SafeWork NSW "Take Forking Safety Seriously - Safety Guide for Businesses" Guidance Note (PX 1, Tab 15) provided: 1. One of the main reasons why workers are killed or seriously injured in forklift incidents in NSW includes being hit or crushed by a load that the forklift is moving; 2. Pedestrians are most at risk of being hit by a forklift if they are walking alongside it and assisting with loading/unloading; 3. The best way to make sure people are not hit by a forklift is to keep them away from forklifts, using physical barriers like guardrails or overhead walkways. Where this is not possible, schedule work so that forklifts and pedestrians are not in the same area at the same time by clearly marked walkways and safe zones; 4. Have a traffic management plan and site safety rules, to manage the risk of vehicles colliding with people; 5. Most serious injuries and deaths related to a falling load happen when the load isn't stable on the pallet, or because the operator did not use an attachment when one was needed. Typically, workers are most at risk of being hit by a falling load when they are trying to help the operator stabilise it, load or unload, or generally if working within striking distance. 1. Australia Standard 2359.2 - 2013 Powered industrial trucks - Part 2: Operations provides the following relevant information: 1. Workplaces should be designed to eliminate the need and opportunity for pedestrians to enter areas where industrial trucks are operating and to prevent trucks from entering pedestrian work areas (p 5); 2. Only loads which are safely arranged and which are within the actual capacity of the truck and or attachment combination shall be carried on a truck. NOTE: Unevenly distributed loads should have the heavy end against the carriage (cl 3.3(m)); 3. All personnel in the vicinity of operating trucks shall be made aware of and observe safe working procedures, including pedestrian safety requirements and separation distances (cl 3.4 (b)); 4. Before attempting to lift, adjust or place any load, the operator shall ensure that no person can be struck by the load if it moves, or falls (cl 3.7(b)); 5. The operator shall ensure the load is stable and evenly distributed prior to lifting and when travelling (cl 3.7(f)); 6. The load shall be uniformly distributed wherever possible. If this is not possible, the heavy end shall be placed against the carriage where practicable (cl3.7(g)); 7. The object of a traffic management plan is to achieve as far as practicable, complete physical separation of trucks and mobile plant from people within the work area so that users of trucks can avoid incidents involving pedestrians and collisions with other mobile plant (Appendix A).

Failures by Rex

1. Prior to the incident, WorkCover NSW had published a series of posters, including a poster titled "Are you using appropriate racking to store glass?" The poster specified ensuring that the rack is constructed to support the weight evenly and is load rated and applying restraints, such as bars, to stop glass falling.
2. Rex did not conduct and document a risk assessment, or conduct and document an adequate risk assessment which identified the risks, assessed them, and identified the most effective controls to manage the risks. The risks associated with the revised procedure were not identified or assessed by Rex, in particular the risk of a person being struck and/or crushed by a load lifted by the forklift.
3. The forklift was not suitable for the task of lifting A-frame trolleys loaded with glass panels that had been unloaded from the machine because: 1. The A-frame trolleys were not secured or evenly balanced. The robotic arm unloaded the glass panels onto one side of the A-frame trolleys only, meaning that the weight was not evenly distributed. The weight of the load was towards the ends of the forklift tines and not against the carriage. Rex did not use anything to secure the trolleys to the forklift, such as straps. The trolleys were placed upon timber blocks/dunnage to stop them moving when the robotic arm placed the glass panels on the trolleys. The revised procedure required workers to hold the glass and walk alongside the forklift to ensure the stability of the load. 2. The A-frame trolleys were not designed to be securely lifted by a forklift. The trolleys were not equipped with tine pockets or guides to ensure they were stable when lifted.
4. Prior to the incident, Rex did not have a Traffic Management Plan ("TMP") in place to achieve physical separation of mobile plant and workers. The revised procedure required a worker to stand and walk alongside the load as it was being lifted and moved by the forklift. This practice was not consistent with the available guidance material, which drew attention to the risk of being hit by a falling load when trying to help an operator stabilise it or working within striking distance, and specified minimum pedestrian safety requirements and separation distances.
5. Rex did not develop, implement and enforce a safe operating procedure for transporting glass from the unloading area. The A-frame trolleys used by Rex were not load rated. Rex did not use any device, such as bars or locking brackets, to restrain the sheets of glass on the loaded A-frame trolleys. There was nothing preventing workers from moving into dangerous areas at the workplace, such as the unloading area of the machine. There was no barrier or exclusion zone marked around the unloading area.
6. Mr Mulipola was not provided with any instruction or information in relation to not accessing the unloading area while the forklift was operating.
7. Prior to the incident Mr Wang did not take reasonable steps to ensure Rex had in place and used appropriate resources and processes to manage the risks associated with the systems for transporting glass panels at the workplace, in particular how they were to be safely removed from the machine.

Systems of Work Following the Incident

1. Following the incident Rex revised its procedure for unloading glass panels from the machine, as follows: 1. A purpose-built trolley was clamped to the ground and chocked during the loading process (a pallet jack and wooden blocks were no longer used to support the trolley during the loading process). 2. During the loading process, workers stood in a designated safe work zone. An exclusion zone was created in the unloading area. The area was cordoned off with safety chains and by lines marked on the ground. Workers operating the machine monitored the exclusion zone to ensure there was no equipment or workers in the zone during production, trolley loading and changeovers of trolleys. 3. Once the glass panels were unloaded, the panels were secured to the trolley using specially fabricated arms/bars called locking brackets. The brackets ensured the glass panels were properly secured to the trolley and did not fall during movement. 4. Once the loading process was complete, the workers removed the clamps and manually pushed the trolleys to the next stage of the production line.
2. The new procedure did not involve using a forklift, thereby eliminating the risk of a load falling onto a person causing injury.
3. The new procedure was documented in a Standard Operating Procedure. The procedure specified there is to be "no lifting or transport of trolleys with cranes or forklifts".
4. Rex developed and implemented a Standard Operating Procedure for the Auto Loader - Double Edge Processing Line. The procedure required workers to wear PPE (high visibility vests) at all times on the factory floor.
5. Rex prohibited the use of forklifts to lift A-frame trolleys. Rex developed and implemented a Forklift Truck Operation policy. The policy specified that the forklift was not to be used in the factory during standard production hours unless absolutely required or when the forklift was in a dedicated loading zone. The policy set out a procedure for operating the forklift, including identifying a clear path of travel, clearing and cordoning off the travel zone, and having a spotter to ensure no-one entered the travel zone.
6. Rex developed and implemented a TMP, with designated safe and exclusion zones. The TMP provided that all staff were required to wear high visibility clothing. The TMP provided that no forklift truck was permitted on the factory floor unless a spotter was organised, there was a marked clear path of travel and any areas that presented a risk were barricaded. The spotter's task was to monitor the forklift movement and ensure that no one entered its path. The TMP also established an exclusion zone around the automatic unloader. No-one was allowed in the exclusion zone during the loading/unloading process. A worker was assigned responsibility to monitor and make sure no-one entered the exclusion zone while trolleys were being changed over.
7. Rex had its A-frame trolleys load tested to ensure they were not loaded with excess weight. The trolleys had a rated load capacity of one tonne.
8. Rex developed and implemented a Standard Operating Procedure for Glass Storage and Transport on A-frame trolleys. The procedure specified that glass was to be loaded evenly on both sides of the trolleys and was not to exceed the rated capacity. Glass is to be secured with locking brackets, and lifting or transport of trolleys with cranes or forklifts was prohibited.
9. Rex trained its workers in the above policies and procedures.

Prior Conviction under the Work Health and Safety Act

1. On 18 March 2015, Rex was convicted of an offence under s 32 of the Act for a breach of its duty under s 19(1).
2. The proceedings arose from an incident that occurred at the workplace on 21 June 2012 where a 21-year-old labourer was seriously injured after being exposed to a risk of being struck or crushed by glass panels used for the manufacture of shower screens when manually handling the panels. The panels were stored in an unrestrained manner on an A-frame trolley and fell on the worker. The worker sustained a fractured tibia and a fractured fibula to his right leg and underwent surgery (PX 1 Tab 1 par 52).

Background

1. Mr Wang affirmed an affidavit dated 16 July 2021 (DX 1). Mr Wang has university qualifications in Commerce and Business Administration from overseas. He first came to Australia in 1988 when he was sent by a company owned by the Chinese Government to set up business operations for them in Australia. During the 1990's Mr Wang resigned from this company, started the business K & K Glass and became an Australian citizen.
2. Mr Wang has experienced several severe health issues in recent years and has undergone numerous treatments and surgeries.

Apology

1. In his affidavit Mr Wang, on behalf of himself and Rex, expressed an apology and regret for the failings that contributed to Mr Mulipola's injuries. Mr Wang explained that he personally apologised to Mr Mulipola and took steps to ensure that only light duties were allocated upon his return to work.

Impact of COVID-19 on Business Operations and the Sale of K & K Glass

1. Mr Wang said that the sales of K & K Glass dropped by more than 30% due to the COVID-19 pandemic. This led to the closure of two factories and the reduction of staff numbers. Rex had approximately 300 customers. The majority of the company's glass products were produced locally and the business faced challenges from overseas competitors.
2. Mr Wang no longer has any direct involvement in K & K Glass. Rex sold K & K Glass on 25 June 2020 to another organisation. Mr Wang intends to wind up Rex when these proceedings end. Rex has not traded since August 2020 after K & K Glass was sold.

Financial Position

1. In his affidavit, Mr Wang provided limited financial information regarding his own personal income and the financial situation of Rex. Mr Wang's assessable income was $106,883 as at 30 June 2017, $95,476 as at 30 June 2018, $97,481 as at 30 June 2019 and $97,897 as at 30 June 2020. He is yet to submit a tax return for the 2021 financial year.
2. Rex had a $716,971 loss in 2017, a $1,268,889 loss in 2018, a $808,668 loss in 2019 and a $1,119,874 loss in 2020. Mr Wang stated that according to information attained from his accountant, as at 30 June 2021, Rex's total assets were $447,550, its total liabilities were $3,530,158 and the accumulated loss was $3,994,571.

Intention to Start New Business Operations

1. Mr Wang expressed an intention to commence a new business which would involve the importation of aluminium windows from China into Australia. Mr Wang stated that the ability to run such an import business would ultimately depend upon when COVID-19 restrictions lift and allow travel. Based on Mr Wang's current enquiries, the earliest this would potentially be possible is during 2022.

Other Evidence for the Defendants

1. The defendants tendered three volumes of financial documents (DX 2, DX 3 and DX 4) which ran to 489 pages. There was no index to this material. Little or no effort was made in submissions to direct the court to any relevant document.
2. The defendants also tendered the affidavit of their solicitor (DX 5 and DX 6) which annexed 284 pages of financial documents. Again, there was little or no reference to this material in submissions. These annexures were not even paginated.
3. The court cannot be expected to trawl through hundreds of pages of financial documents on its own. Indeed, it could lead to error, if a judge looked through all of that material and drew conclusions from it, without hearing submissions from counsel.

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 (NSW).

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 The Queen (No. 2) [1988] HCA 14; (1988) 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] NSWCCA 242; (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 [1988] HCA 67; (1988) 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. In Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27] the High Court said: "The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending."
4. 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].
5. 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] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.
6. 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. 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.
7. The Court of Criminal Appeal has examined the sentencing process with regard to the Act 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. Justice Basten at [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."
8. Further at [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 [event] 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, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."
9. At [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."
10. My findings about the defendant's level of culpability are based upon the following: 1. The risk of a worker being stuck or crushed by an unsecured load being lifted by a forklift was an obvious and foreseeable risk. The relevant guidance material clearly stated the specific risk of workers being hit by a falling load. 2. The likelihood of the risk occurring was relatively high in the circumstances where: 1. no effective controls for separation of workers and forklifts, such as a TMP or designated exclusion zones, were in place; and 2. the revised procedure required a worker to stand and walk alongside the load as it was being lifted and moved by the forklift. 1. The potential consequences of the risk were serious injury or death. This can be appreciated best by viewing the CCTV of the incident (PX 1, Tab 8). 2. The available guidance material set out control measures to separate forklifts and workers, such as clearly marked walkways, safe zones and TMPs. 3. There would have been no significant burden or cost in taking such measures to ensure safety. They were promptly implemented straight after the incident. 4. Mr Mulipola suffered serious injuries. It is very fortunate indeed that there were no fatal head injuries suffered. 5. The maximum penalties for the offences are $1,500,000 for the corporate defendant and $300,000 for the individual defendant, which reflects the legislature's view of the seriousness of the offence. 6. Prosecutions involving forklifts, and in particular unsecured loads falling off forklifts, often come before this court. Counsel for the prosecutor listed many such cases in his written submissions (MFI 1, par 27).
11. I find that the level of culpability of Rex is in the mid range.
12. I find that the level of culpability of Mr Wang is in the mid range.

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; (2016) 93 NSWLR 338 at [180].
2. The penalty must reflect the need for specific deterrence. Rex is no longer engaged in business and thus specific deterrence is not relevant. Mr Wang has expressed an interest in commencing an aluminium window import business. Specific deterrence must be taken into account for Mr Wang. His new business would involve handling of imported aluminium windows and the continuing engagement of workers.

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. Rex has a previous conviction: s 21A(2)(d) Crimes (Sentencing Procedure) Act 1999. The incident which led to that previous conviction bears a similarity to the facts of the present case. The court should take the prior offence into account in determining the sentence imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence: Veen v The Queen (No.2) [1988] HCA 14 at [14]; (1988) 164 CLR 465.

Mitigating Factors

1. Mr Wang does not have a record of previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999.
2. Both offenders has shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. In his affidavit, Mr Wang provided evidence that he has accepted responsibility for his actions as a director. I regard Mr Wang as also speaking for Rex in this regard. Mr Wang has acknowledged that the injury to Mr Mulipola was caused by the actions of Rex and by his own offence as a director.
3. Both 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 Rex and Mr Wang a 25% discount for their early pleas.
4. No other mitigating factors were relied upon by counsel for the defendants.

Capacity to Pay a Fine

1. I am required to have regard to s 6 of the Fines Act 1996 (NSW) 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: Mahdi Jahandideh v The Queen [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 at [79] 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. Counsel for the Prosecutor submitted that if the intention is that Rex is to be wound up, then capacity to pay is not a relevant matter in relation to the corporate defendant. In any event, Rex received $1 million for sale of its stock (DX 6, p 140). The Prosecutor submitted that there was no evidence to prove that Rex had a limited capacity to pay and, even if there was, any inability of Rex to pay does not affect the importance of general deterrence. I accept both submissions.
4. In relation to Mr Wang personally, counsel for the defendants announced at the commencement of the sentence hearing that: 1. Mr Wang has an unencumbered joint interest in a home unit in Sydney. 2. He also jointly owns three investment units with his wife. These assets are mortgaged but generate rental income. 3. He has $170,000 in a Citibank account.
5. None of this was disclosed in Mr Wang's affidavit. Understandably, counsel for the prosecutor was content to rely on these admissions without the need for formal proof.
6. Counsel for the prosecutor had clearly read the financial material closely. He pointed out that on 8 June 2021 $500,000 was deposited to a Westpac account called "Investment Loan Account". This discharged the loan. Mr Wang did not explain what this loan was for or where the $500,000 came from.
7. Counsel for the prosecutor also pointed to a different Westpac loan and to credits of $122,000 on 21 April 2021 and $249,985 on 30 April 2021. Mr Wang gave no explanation as to where these monies came from.
8. Counsel for the prosecutor pointed to yet another Westpac account, which recorded credits of $200,000 on 20 May 2021 and $600,000 on 19 June 2021. Again, Mr Wang said nothing in his affidavit about these monies.
9. Counsel for the prosecutor also pointed out that there was a Citibank account which on 20 May 2021 had an opening balance of $292,190.20. By 18 June 2021 this had been reduced to $170,584.10. Presumably this is the Citibank account with a credit of $170,000, referred to by counsel for the defendants during the opening of the case. Why that account was reduced by $120,000 in the space of a month just before the hearing, and where that money went, was not explained by Mr Wang.
10. Neither defendant has discharged the evidentiary onus of convincing the court that it should exercise its discretion to limit the amount of the fine.

Costs

1. The prosecutor seeks an order that the defendants are to pay the prosecutor's costs.

Penalty

1. My orders are: Penalty for Rex Australia Pty Limited (2020/241852): 1. The offender Rex Australia Pty Ltd is convicted. 2. The appropriate fine is $300,000 but that will be reduced by 25% to reflect the plea of guilty. 3. Order Rex Australia Pty Ltd to pay a fine of $225,000. 4. Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor. 5. Order Rex Australia Pty Ltd to pay the prosecutor's costs. Penalty for Wei Wang (2020/241876): (1) The offender Wei Wang is convicted. (2) The appropriate fine is $60,000 but that will be reduced by 25% to reflect the plea of guilty. (3) Order Wei Wang to pay a fine of $45,000. (4) Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor. (5) Order Wei Wang to pay the prosecutor's costs.

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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: 23 July 2021