WorkCover Authority of New South Wales (Inspector Ian Hannah) v Keough's Plant Hire Pty Ltd

CATCHWORDS: Appeal - breach of OH&S Act - whether monetary penalty imposed was sufficient - magistrate imposed penalty based on local court limitations - objective seriousness of offence - plea of guilty - appropriate penalty exceeds the jurisdiction of an Industrial Magistrate - penalty fixed was manifestly inadequate - proper principles in fixing penalties - whether applicant can appeal as of right or must seek leave - order of magistrate set aside - penalty imposed.

Crimes (Local Courts and Appeal Review) Act 2001 ss 23 56 Fines Act s 10 LEGISLATION CITED: Industrial Relations Act 1996 s 197(1) & (2) Occupational Health and Safety Act 2000 s 8(1)

Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Drake Personnel Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 NSWIRComm 341 Inspector Gregory Maddaford v Coleman [2004] NSWIRComm 317 Lawrenson Diecasting Pty Ltd v Workcover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 CASES CITED: R v Doan (2000) 50 NSWLR 115 Ridge Consolidated Pty Ltd v WorkCover Authority of New South Wales (Inspector Mauger) (2002) 115 IR 78 U-RECT-IT Pty Ltd v WorkCover Authority of New South Wales (Inspector de Silva) [2004] NSWIRComm 266 WorkCover Authority of New South Wales (Inspector Mansell) v Orica Australia Pty Ltd (2002) 116 IR 158

APPELLANT Mr P Skinner of counsel Solicitor: Mr J Deo Shaw McDonald Pty Ltd, Solicitors LEGAL REPRESENTATIVES:

RESPONDENT Mr R J M Ford of counsel Solicitor: Mr P Day Denniston & Day Lawyers

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH

CORAM: Walton J, Vice-President Marks J Backman J Friday 20 May 2005

WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR HANNAH) v KEOUGH'S PLANT HIRE PTY LTD

Application by WorkCover Authority of NSW for leave to appeal and appeal against a decision of Industrial Magistrate Dowd given on 16.7.2004 in matter no. 00026713/04/190 (transferred from CIMC Sydney proceedings matter no. CIM 200856003/04

1 These appeal proceedings were initiated by the appellant, Inspector Ian Hannah of the WorkCover Authority of New South Wales, by way of the filing of a document entitled "Application for leave to appeal and appeal" from a decision of his Honour, Magistrate Dowd, in the local court of Wagga Wagga, delivered on 16 July 2004. That decision was delivered in connection with a prosecution by the appellant brought against the respondent for a breach of s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"). The respondent had pleaded guilty to that breach and his Honour imposed a monetary penalty of $3,500. 2 The factual background is not in dispute. The defendant company had carried on business as a plumbing contractor in the Wagga Wagga area over many years. It was contracted by Wagga Wagga City Council to undertake certain trenching work in March 2002. It was necessary for the defendant to excavate a trench and lay a sewer pipe along it. That work appears to have been carried out on 19, 20 and 21 March 2002. On 20 March 2002 a construction engineer employed by Wagga Wagga City Council visited the site and directed the attention of two employees to the fact that there was no shoring or guarding being used in the trench. A director of the defendant, John Anthony Keogh, who had overall responsibility for the supervision of the work, was informed of this by the Council Inspector. Mr Keogh attended the site on 20 and 21 March 2002 and instructed employees working there to ensure that the trench was shored up and that trench guards were put in place. He left the site at about 1:00 pm on 21 March 2002. The shoring trench guards consisted of metal planks, approximately 150 mm wide, which were placed against the sides of the trench at distances of between 1 and 2 meters. They were then secured against the trench sides by using adjustable jacks comprised of metal planks which could be extended by moving a threaded insert. 3 At about 2:00 pm on 21 March 2002 an employee of the defendant company, Ian Bailey, was working inside the trench. Mr Bailey had been employed by that company as a plumber for about a year and had worked as a plumber for approximately 10 years. He was the supervisor of two other employees involved in the work. Mr Bailey stood within the trench and passed out the trench guards to the employees working at street height. As he was doing so the trench collapsed, burying Mr Bailey up to his chest and causing injuries in the nature of a broken jaw in two places, a punctured lung, eight broken ribs, two ribs separated from the sternum and pulmonary contusion to his upper body. He had to be dug out of the collapsed trench and was taken to Wagga Wagga base hospital. He made a recovery after some considerable time. 4 It seems that no trench guards had been in place at the position where the trench collapsed. 5 There was an alternative system for the removal of the trench guards which could have been used by the defendant company. That consisted of removing them working from the top of the trench rather than the bottom of the trench. 6 Other relevant factual matters included the lack of any safety induction process with respect to the particular site, and the lack of consultation between the persons working there and the job supervisor. Since the accident the defendant company has put its workers who usually dig trenches through a course which provides induction training for persons undertaking construction work, and the defendant company has formally adopted the Safe Work Method Statements issued by the Council. The defendant company was said to have cooperated fully with the WorkCover Authority during the course of its investigation. It has 16 employees and has been conducting work in the Wagga Wagga area for approximately 20 years. The defendant company entered a plea of guilty a few days before the proposed hearing. 7 In the course of an ex tempore judgment the learned magistrate fixed a penalty of $3,500. This was in circumstances where the maximum penalty for an offence under s 8(1) of the OH&S Act was $550,000, although the jurisdictional limit on a penalty which might be fixed in the local court was $55,000. In the course of his Honour's ex tempore judgment, his Honour recited details of the circumstances in which the incident occurred and made reference to steps taken by the defendant company since the incident to ensure compliance with its obligations under the OH&S Act. His Honour also took into account by way of mitigation the involvement of the defendant company in communal activities, and the creation of job opportunities for young people in the area. He characterised the defendant as "a good corporate citizen". 8 His Honour then said that he considered "that the liability is indeed at the bottom of the range, and I say that bearing in mind those injuries that were sustained but also bearing in mind the previous record of the defendant and the particular circumstances whereby the accident occurred. I intend to reflect that in the monetary penalty".

9 The appellant alleged that the penalty imposed was manifestly inadequate and that his Honour "erred in the application of sentencing law to the facts as established before him". It sought that the penalty be quashed and that a substitute penalty be imposed by this court. 10 It will be observed that the appellant sought leave to appeal. Despite the seeking of leave, the appellant submitted during the course of the hearing of the appeal proceedings that there was an appeal as of right. The genesis of this controversy was said, by counsel who appeared in the proceedings, to have as its basis an amendment to s 197(2) of the Industrial Relations Act 1996 with effect on 7 July 2003. Section 197 of that Act is in the following terms: s 197 Appeals from Local Court (1) An appeal lies to a Full Bench of the Commission in Court Session against: (a) any order made under this Act by a Local Court for the payment of money or the dismissal by the Local Court of an application for such an order (including a dismissal on the ground that it does not have jurisdiction to deal with the application), or (b) any conviction or penalty imposed by the Local Court for an offence against this Act or the regulations, or (c) a civil penalty imposed under this Act by a Local Court for a contravention of an industrial instrument or the dismissal by the Local Court of proceedings for such a civil penalty. (2) The provisions of the Crimes (Local Courts Appeal and Review) Act 2001 that relate to: (a) appeals from a Local Court to the District Court or Supreme Court, and (b) the decisions of the District Court or Supreme Court on any such appeal, and (c) the carrying out or enforcement of any such decision, (including those provisions as applied by section 64 of the Local Courts Act 1982 ) apply, subject to the regulations under this Act, to any appeal referred to in subsection (1). (4) The Full Bench of the Commission in Court Session may refer a matter the subject of an appeal back to the Local Court with such directions or recommendations as it considers appropriate. (5) Section 179 (Finality of decisions): (a) applies to a decision or purported decision of a Local Court in proceedings to which this section applies in the same way as it applies to a decision or purported decision of the Commission, and (b) without limiting that section, applies to a decision or purported decision of the Commission in respect of proceedings to which this section applies.

11 It will be seen that, by reason of subsection 2 of s 197 the provisions of the Crimes (Local Courts and Appeal Review) Act 2001 as referred to are said to apply to any appeal brought under s 197(1). This raises for consideration whether or not the amendment made to s 197 displaces the judgment of the Full Bench of this Court in Drake Personnel Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 as contained within the joint judgment of the President, Wright J, and Vice-President, Walton J. It also raises questions as to whether the appeal is one as of right brought under s 23 of the Crimes (Local Courts Appeal and Review) Act 2001, or is an appeal as of right under s 56 of that Act. If Drake Personnel still applies then leave is required and the nature of the appeal is as described in the joint judgment referred to. 12 For reasons which we shall shortly state, we are of the opinion that the penalty fixed by the learned magistrate was manifestly inadequate and that the magistrate's discretion miscarried in the sense that his Honour failed to consider and to apply appropriate principles of sentencing. On whatever view one may take of the nature of the appeal and as to whether it is one which requires leave or is one as of right, it is clear that if leave be required it ought be granted; and, whether the appeal be by way of rehearing or whether it be an appeal stricto senso, confined only to a ground that involves a question of law alone, the appeal should be upheld. We have in mind also that in order to determine in an authoritative and appropriate manner the controversy raised by the parties we would require, by way of submissions, a great deal more assistance than has thus far been provided by counsel by way of written and supplementary oral submissions. We do not make this comment in any critical sense because, sometimes, it is not until issues are ventilated during the course of proceedings that the nature and extent of the controversy is revealed and that all of the matters which need to be considered in determining that controversy are identified. Furthermore, we are conscious of the fact that the appellant is a company carrying on business in Wagga Wagga and that the costs associated with the preparation and making of submissions in connection with the necessary legal argument will add to the costs already incurred by the respondent, in addition to the increased penalty which it will be required to pay. Accordingly, we propose to dispose of the proceedings in the manner indicated. 13 As we have said, the learned magistrate delivered an ex tempore decision. The transcript of the proceedings indicates that his Honour received little assistance from Mr Gordon appearing for the WorkCover Authority of New South Wales; nor, indeed, from the solicitor appearing for the respondent, concerning the appropriate sentencing principles to be applied and the proper approach to the fixing of an appropriate penalty. In our opinion, all judicial officers are entitled to receive appropriate assistance from legal practitioners. 14 The appropriate principles to be adopted in fixing penalties under the Occupational Health and Safety Act have been stated by Full Benches of this Court on many occasions. We instance Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464; Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; WorkCover Authority of New South Wales (Inspector Mansell) v Orica Australia Pty Ltd (2002) 116 IR 158; Ridge Consolidated Pty Ltd v WorkCover Authority of New South Wales (Inspector Mauger) (2002) 115 IR 78. In summary terms the starting point is the objective seriousness of the offence. This is the pivotal point from which a penalty must be assessed by reference to the maximum applicable penalty fixed by the legislature. In fixing that amount, the court is also required to take into account the question of deterrence. It is only when that assessment is made that the court is entitled to take into account mitigating factors such as a plea of guilty, contrition, the defendant's general commitment to occupational health and safety matters, steps taken by the defendant after the incident by way of enhancement of the commitment to occupational health and safety matters, cooperation with the investigating authority and the like. There may also be an application of the provisions of the Fines Act, in an applicable case. 15 During the course of his decision, the learned magistrate rejected a submission made on behalf of the respondent that penalty should be fixed "at the bottom of the range". Mr Gordon stated that he would "concede it is not one of the more serious breaches, but we don't think it is in the very low range either your Honour". Mr Skinner of counsel, who appeared for the appellant on the appeal before us, said that his client would be bound by this assessment. 16 Whilst Mr Gordon informed his Honour that the maximum penalty was $550,000 and that the jurisdictional limit which could be imposed by a local court was $55,000, he was not informed of the line of authority typified by a decision of the Full Bench of this Court in U-RECT-IT Pty Ltd v WorkCover Authority of New South Wales (Inspector de Silva) [2004] NSWIRComm 266, which was delivered after the hearing before the magistrate in these proceedings. However, that judgment reflects a well-known line of authority such as may be found in the judgment of the New South Wales Court of Criminal Appeal in R v Doan (2000) 50 NSWLR 115. These authorities establish that, for the purpose of these proceedings, the objective seriousness of the offence and the deterrent factors would result in an appropriate penalty being fixed by reference to a maximum penalty of $550,000. The jurisdictional limit only operates in relation to the penalty finally assessed on this basis. In this case, and assuming, as the prosecutor submitted, that the learned magistrate had applied the maximum permissible discount, being 25 per cent for an early plea of guilty and 10 percent for all other factors, this would result in the objective seriousness of the offence and deterrent factors reflecting penalty for these factors of approximately $5,400. We are unable to comprehend how such a penalty could be characterised as anything other than manifestly inadequate in the circumstances of this case. 17 We should add that the learned magistrate made no reference to any deterrent factor other than in dealing with a submission made on behalf of the respondent that the provisions of s 10 of the Fines Act should be applied in favour of the respondent. 18 In summary, we are of the opinion that the reasons for decision of the learned magistrate do not reveal, either explicitly or by implication, that his Honour applied the relevant sentencing principles. This is an error of law. Further, the penalty was manifestly inadequate.

19 Having identified these errors we are of the opinion that it is appropriate that the court as currently constituted should fix an appropriate penalty. Although we are of the opinion that, viewed objectively, the offence is a most serious one, having regard to the danger created by the work methodology adopted by the respondent we are prepared to apply the concession by the appellant that it should be bound by the representation made to the magistrate to the effect that the offence was "not one of the more serious breaches, but we don't think it is in the very low range either…". We are conscious of the application of the principle, known shortly as "double jeopardy", which dictates a conservative approach to the fixing of penalty in a prosecution appeal of this kind. We refer to the statement of principle and the relevant authorities contained within paragraph [107] of the judgment of the Full Bench in Inspector Gregory Maddaford v Coleman [2004] NSWIRComm 317. We also consider a discount of 35 per cent should be applied. In fixing the discount, we shall assume in favour of the defendant, availability of a full discount of 25 per cent with respect to an early plea, albeit that there was no indication that such a plea would be entered until a few days before the hearing. It will be seen that the resultant penalty would exceed the monetary limit that could be set by a magistrate. 20 Having regard to all of these considerations, we fix a penalty in the sum of $25,000. 21 The appellant did not seek any costs order in its favour. 22 Accordingly, we make the following orders: 1. To the extent that leave to appeal is necessary, leave is granted. 2. The appeal is upheld. 3. The order for the payment of penalty made by Industrial Magistrate M Dowd on 16 July 2004 is quashed. 4. The respondent is fined the sum of $25,000 with a moiety to the appellant.

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