WorkCover Authority of New South Wales (Insector Petar Ankucic) v McDonald's Australia Limited and Another

WorkCover Authority of New South Wales (Insector Petar Ankucic) v McDonald's Australia Limited and Another - [2000] NSWIRComm 277 - NSWIRComm 2000 case summary — Zoe

SECOND DEFENDANT: McDonald's Properties (Australia) Pty Limited (ACN: 008 496 928) FILE NUMBER: IRC1104; 1106 of 1998 CORAM: Walton J Vice-President CATCHWORDS : Safety of employees - Occupational health and safety - Offences under s17 of the Occupational Health and Safety Act 1983 - Fatal accident - Plea of guilty - Penalties - First defendant a company coordinating a chain of family restaurants - First defendant had a license agreement with the employer of the deceased employee for the operation of the restaurant in which the incident occurred - Second defendant a subsidiary of the first defendant and the registered proprietor of the land on which the premises situated and the lessor of the premises to the employer - Charges brought against other defendants including employer in respect of the same incident - Prosecutions in respect of certain of the other defendants discontinued - Appropriate penalties - Principles - Submission that sentencing should be based on an assessment of the culpability of the various entities concerned and that nature and quality of the offence should be determined having regard to the amount of control exercised by the defendants as opposed to the other entities - Parity principle - Whether Court should ensure parity between the offenders whether prosecuted or not - Principle of parity only operated to the extent of like with like - Differences in sentences arising from different circumstances will not violate the principle - Principle of totality - Two defendants facing different charges - Principle does not require the two defendants in this case to be treated as effectively one identity - Culpability of each party to be weighed - By a plea of guilty defendants admits all of the elements of the offence - In assessing appropriate penalty the decision of the Court will. be affected by the factual basis from which the Court proceeds, including the actions, history and other personal circumstances of the offender - Nature and quality of the offence and not merely result of the offence to be considered - Foreseeability of risk - Prior offence - Mitigating factors - Degree of mitigation sought by the defendants not justified by submissions relating to reliance placed by the defendants on the other entities - Contrition and remorse - Assistance to family of deceased - Co-operation - Occupational Health and Safety Act 1983 s17 LEGISLATION CITED : Occupational Health and Safety Act 1983 Alcatel Australia Limited v WorkCover Authority of NSW (1996) 70 IR 99 Austin v Metropolitan Demolitions Pty Limited (1990) 38 IR 359 Axer Pty Ltd v Environmental Protection Authority (unreported, Court of Criminal Appeal, Matter No. 60763 of 1992, 22 November 1993) Camilleri's Stock Feeds Pty Limited v Environmental Protection Authority (1993) 32 NSWLR 683 Christopher Tom Jurisic (1998) 101 A Crim R 259 Department of Mineral Resources of NSW (Chief Inspector Bruce Robert McKensey) v Kembla Coal and Coke Pty Ltd (unreported, Walton J, Vice-President, IRC142 of 1998, 16 August 1999 Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 370 Dowling v Overtop Pty Limited (1998) 86 IR 319 Drake v WorkCover Authority of NSW (1999) 90 IR 432 Ferguson v Nelmac Pty Limited (unreported, Wright J, President, IRC97/3421-3423, 24 May 1999) Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 Griffiths v The Queen (1977) 137 CLR 293 Haynes v CI & D Manufacturing Pty Limited (1995) 60 IR 149 Haynes v CI & D Manufacturing Pty Ltd and another (No. 2) (1995) 60 IR 455 Huang (1994) 78 A Crim R 111 Ibbs v The Queen (1987) 163 CLR 447 Inspector Callaghan v Saunders Constructions Pty Limited (unreported, Matter No. CT1062 of 1993, 26 November 1993) R v Gallagher (1991) 23 NSWLR 220 R v Holder [1983] 3 NSWLR 245 Inspector Hannah v Rice Growers Co-Operative Limited (unreported, Fisher CJ, CT88 of 1990, 20 November 1990) Kalajzich (1997) 94 A Crim R 41 Fernando v Fernando (1997) 95 A Crim R 533 Lawrenson Diecasting Pty Ltd v WorkCover Authority of NSW (Inspector James Swee Ch'ng) (1999) 90 IR 464 Lowe v The Queen (1984) 154 CLR 606 McLaughlin v ICI Australia Operations Pty Limited & another (unreported, Fisher P, Matter Nos. 1512, 1518 and 1520 of 1988, 20 December 1990) McMillan, Britton & Kell Pty Ltd v WorkCover Authority of NSW (Inspector Blake) (1999) 89 IR 464 Neill v The Queen (1982) 149 CLR 305 Nesmat Pty Limited v WorkCover Authority of NSW (1998) 87 IR 312 Pearce v The Queen (1998) 72 ALJR 1416 Postiglione v The Queen (1997) 189 CLR 295 R v Allpass (1993) 72 A Crim R 561 R v De Simoni (1981) 147 CLR 383 CASES CITED : R v Dodd (1991) 57 A Crim R 347 R v Engert (1995) 84 A Crim R 67 R v H (1980) 3 A Crim R 53 R v Holder [1983] 3 NSWLR 245 R v Lett (unreported, NSW Court of Criminal Appeal, Hunt CJ, Sully and Levine JJ, Matter No. 60112 of 1994, 27 March 1995) R v Olbrich (1999) 166 ALR 330 R v Vusumuzi Twala (unreported, Court of Criminal Appeal, Matter No. 60187 of 1993, 4 November 1994 ) Saffron (No 3) (1989) A Crim R 123 Signato v R (1998) 73 ALJR 162 Slattery (1996) 90 A Crim R 519 State Rail Authority of NSW v Dawson (1990) 37 IR 110 Tyler v Sydney Electricity (1993) 47 IR 5 Veen v The Queen [No 2] (1988) 164 CLR 465 Warman International Limited v WorkCover Authority of NSW (1998) 80 IR 326 Wong v Melinda Group Pty Ltd (1998) 82 IR 118 WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Matter No. CT 1280 of 1995, 2 April 1997 WorkCover Authority of NSW (Inspector Mayo-Ramsay) v Capral Aluminium Ltd (1999) 90 IR 256 WorkCover Authority of NSW (Inspector McDonald) v Commonwealth Steel Company Ltd (1999) 90 IR 297 WorkCover Authority of NSW (Inspector Milligan) v State Rail Authority of NSW (unreported, Kavanagh J, Matter Nos. IRC7032-7036 of 1997, 13 October 1999) WorkCover Authority of NSW (Inspector Tyler) v The Roads and Traffic Authority (unreported, Kavanagh J, Matter No. IRC1284 of 1998, 31 August 1999) WorkCover Authority of NSW v Atco Controls Pty Limited (1998) 82 IR 80 WorkCover Authority of NSW v BHP Company Limited (1998) 83 IR 427 WorkCover Authority of NSW v Broken Hill Proprietary Company Limited (1998) 83 IR 427 WorkCover Authority of NSW v Capral (1998) 82 IR 468 WorkCover Authority of NSW v Rowson (unreported, Cullen J, CT1156 and 1157 of 1993, 30 June 1994) WorkCover Authority of NSW v Waugh (1995) 59 IR 89 WorkCover Authority v Air Express International (Australia) Pty Limited (1996) 83 IR 64 WorkCover Authority v Nicholson's Air Service Pty Limited (unreported, Fisher J, Matter Nos. CT1008 and 1009 of 1995, 8 April 1998) WorkCover Authority v Sarkem Limited and ICI Australia Operations Pty Limited (unreported, Fisher P, Matter Nos. IRC605 and 606 of 1997, 27 February 1998).

[15]

Prosecution of McDonald's Australia Limited (the first defendant) 3 The first defendant is a company incorporated in New South Wales (whose registered address is situated at 21-29 Central Avenue, Thornleigh, New South Wales) which co-ordinates McDonald's Family Restaurants throughout Australia by means of franchise arrangements and the direct operation of the restaurants. Approximately 71% of the restaurants are operated by franchise. 4 The first defendant had a license agreement with a company known as Lyndhurst Trading Co Pty Limited ("Lyndhurst") by which Lyndhurst operated a McDonald's Family Restaurant at the premises. At the time of his death, Michael Johnston was an employee of Lyndhurst and had been so engaged for a period of approximately 2 weeks. Lyndhurst operated the restaurant from its opening on 14 December 1992. 5 The prosecution of the first defendant was brought pursuant to s17(1)(b) of the Act. The alleged breach of that section was set out in the following terms in the summons, as amended: On 8 March 1996 at premises located at the corner of Burrelli, Stewart and Corrimal Streets, Wollongong, New South Wales (the defendant) being a person who had to any extent control of plant in non-domestic premises which was provided for the use or operation of persons at work (not being the person's employees) DID FAIL to ensure the said plant was safe and without risks to health contrary to Section 17 (1)(b) of the Occupational Health and Safety Act , 1983, in that the defendant failed to ensure plant and in particular kitchen equipment made available to Michael Ian Johnston a person not in the employ of the defendant at work at the said premises was safe and without risks to health. 6 The particulars of the charge against the first defendant were as follows:

The defendant at all relevant times was a licensor of a chain of restaurants known as McDonald's Family Restaurants.
At all relevant times the defendant was a licensor of a McDonald's Family Restaurant to a company known as Lyndhurst Trading Co. Pty Ltd [ACN: 003 168 427] at premises located at the corner of Burrelli, Stewart and Corrimal Streets, Wollongong in the State of New South Wales.
On 8 March 1996 at the said premises Michael Ian Johnston (19 years) an employee of Lyndhurst Trading Co. Pty Ltd was fatally injured when he came in contact with an exposed inner core of a cable attached to kitchen equipment known as a 'clamshell' grill.
It is alleged the defendant as licensor of the said McDonald's Family Restaurant was a person who had to any extent control of plant made available to persons (not its employees) as a place of work.
It is alleged the defendant being a person who had to any extent control over plant and in particular kitchen equipment known as a 'clamshell' grill made available for use or operation of persons at work (not being the persons employees) did fail to ensure the said plant was safe and without risks to health in that the defendant failed to ensure that: a) The defendant failed to ensure the cable attached to kitchen equipment known as a 'clamshell' grill was adequate for its intended purpose. b) The defendant failed to ensure the kitchen equipment was installed in a manner that did not give rise to risks to health and safety to persons using and operating the said equipment. c) The defendant failed to ensure the kitchen equipment was used and operated in a manner that did not give rise to risks to health and safety to persons not in its employ.
As a result of the said failures the 'clamshell' grill provided by the defendant exposed persons not in its employ and in particular Michael Ian Johnston to risks to health and safety when the said grill was being used at work.
As a result of the said failures Michael Ian Johnston was electrocuted when he came in contact with an exposed inner core of an electric cable.

[16]

McDonald's Properties (Australia) Pty Limited (the second defendant) 7 The second defendant is a company incorporated in the Australian Capital Territory (whose office is situated at 21-29 Central Avenue, Thornleigh, New South Wales). It is a wholly owned subsidiary of the first defendant and the registered proprietor of the land on which the premises are situated and the owner of buildings and improvements thereon. The second defendant is the lessor to Lyndhurst for the premises. 8 The prosecution of the second defendant was brought pursuant to s17(1)(a) of the Act. The alleged breach of that section was set out in the following terms in the summons, as amended: On 8 March 1996 at premises located at the corner of Burrelli, Stewart and Corrimal Streets, Wollongong, New South Wales the defendant being a person who had to any extent control over non-domestic premises made available to persons (not being the person's employees) as a place of work and in particular Michael Ian Johnston DID FAIL to ensure the said premises were safe and without risks to health contrary to Section 17 (1)(a) of the Occupational Health and Safety Act , 1983, in that the defendant being the lessor was a person who had to any extent control over the design, layout and specifications of the said premises failed to provide for and ensure the said design, layout and specifications did not give rise to risks to safety. 9 The particulars of the charge against the second defendant were as follows:

The defendant at all relevant times was a lessor to a chain of restaurants known as McDonald's Family Restaurants.
At all relevant times the defendant leased a McDonald's Family Restaurant to a company known as Lyndhurst Trading Co. Pty Ltd [ACN: 003 168 427] at premises located at the corner of Burrelli, Stewart and Corrimal Streets, Wollongong in the State of New South Wales.
On 8 March 1996 at the said premises Michael Ian Johnston (19 years) an employee of Lyndhurst Trading Co. Pty Ltd was fatally injured when he came in contact with an exposed inner core of an electric cable attached to kitchen equipment known as a 'clamshell' grill.
It is alleged the defendant as lessor of the said McDonald's Family Restaurant was a person who had to any extent control of the said premises made available to persons (not its employees) as a place of work.
It is alleged the defendant failed to ensure the said premises were safe and free from risk in that the defendant failed to adequately provide for and ensure in the design, layout and specification of the premises the following: i. The accessibility of power outlets to be used for mobile kitchen equipment. ii. The installation of Residual Current Devices for each power outlet used for mobile kitchen equipment. iii. That power outlets and switch board were adequately labelled. iv. The floor tiles used were suitable for the movement of mobile kitchen equipment. v. The suitability of the power outlet for mobile kitchen equipment.
As a result of the said failures Michael Ian Johnston was fatally electrocuted when he came in contact with an exposed inner core of an electric cable.

[17]

Statement of Agreed Facts 10 A statement of agreed facts, in the following terms (omitting formal parts), was admitted into evidence: 5. Prior to commencing trading at the premises on 14 December 1992, Lyndhurst entered into a 20 year license agreement with the First Defendant (the "License Agreement") and a concurrent 20 year lease agreement for the premises with the Second Defendant (the "Lease Agreement"), a wholly owned subsidiary of the First Defendant. 6. The Licence Agreement set out the grant of the license to Lyndhurst to use the "McDonald's System" and granted Lyndhurst certain rights and imposed on Lyndhurst certain obligations. 7. Paragraph 6 of the License Agreement set out the undertakings and obligations of Lyndhurst to the First Defendant. Lyndhurst, under the terms of the License Agreement, undertook to comply with every component of the "McDonald's System". The "McDonald's System" includes a designated menu of food and beverage products; uniform specifications; preparation methods; quality and appearance; and uniform facilities and services. 8. Paragraph 6.01(1) required Lyndhurst to adopt and use the formulae, methods and policies contained in the business manuals including training and cleaning procedures provided by the First Defendant. The License Agreement requirement to implement certain methods and policies contained in business manuals supplied by the First Defendant is intended by the First Defendant to provide a minimum standard only. The licensees of the McDonald's System were also required by both the License (CI 6.01(I)) and Lease (CI 3.08) Agreements, at their own expense to comply with all Federal, State and Local Laws, including the Occupational Health and Safety Act. For that purpose: a) The licensees remained at liberty to introduce such other policies and procedures as were necessary to satisfy these obligations. b) The licensees consult directly with suppliers and independent contractors. 9. Paragraph 6.01(c) of the Licence Agreement required Lyndhurst to use kitchen fixtures, lighting and other equipment, seating and signs in accordance with equipment specifications and layout designated by the First and Second Defendants. These aspects of the McDonald's Family Restaurants were specified by the Second Defendant based on advice that it receives from various specialist advisers and suppliers. 10. The "McDonald's System" is an extensive system which attempts to govern the minimum standards of operation of McDonald's Family Restaurants. The system includes the provision by the first defendant to licensees of maintenance guidelines and checklists for plant in a documented format to assist the licensees in complying with their statutory obligations. Similar to the design aspects of the Restaurants, these guidelines and checklists (including MRC 11A below) are developed in conjunction with specialist advice from suppliers to McDonald's and the Licensees, including Taylor Company Incorporated. 11. It is alleged by the First Defendant that on or about 14 June 1994, that it provided to licensee's a document known as Planned Maintenance (PM) Card 81. Lyndhurst alleges that it did not receive PM Card 81. 12. While PM Card 81 set outs the procedures to be followed for the maintenance of portable electrical equipment and in particular a system for checking power leads for damage to the insulation, it failed to: a) Identify the risk associates (sic) with the movement of portable electrical equipment associated with this maintenance. b) Provide adequate information to allow for the identification and management of electrical hazards, such as the risk of mechanical injury to cables and other electrical components by frequent movement. 13. However, the First Defendant prior to the accident below supplied documentation for the cleaning of the Clamshell Grill to Lyndhurst. The documentation provided by the First Defendant to Lyndhurst included a document known as Maintenance Requirement Card 11A - "Clean Behind Grills" ("MRC 11A") that required power to be isolated after the Clamshell Grill was moved from the wall but failed to appropriately take into account the risks associated with being unable to isolate the power until after the Clamshell Grill was moved. 14. The premises were known as a "90/70 series" type of building. The Second Defendant in consultation with various advisers was responsible for designing the layout and specification of the premises including the position of the power outlets, the labelling of the outlets and switchboards and the provision of residual current devices. 15. At all relevant times Lyndhurst employed Michael Ian Johnston ("Johnston"), aged 19 years at the premises at Wollongong. On 8 March 1996 at approximately 10.05pm Johnston was fatally injured when he came in contact with an exposed inner core of a live electric cable. At the time Johnston sustained the injury he was engaged in cleaning kitchen equipment known as a 'Clamshell' Grill at the said premises. Johnston had been employed by Lyndhurst for approximately two weeks and had received on the job training for the cleaning procedure. 16. Lyndhurst owned and operated two 'Clamshell' Grills at the premises. The work practice at the premises was to clean the two Clamshell Grills on a daily basis. The work practice also involved the employees using hot water and a cloth to wipe down the back of the hood; the cover of the electric outlet; the floor; and in addition were required to wipe over the cable of each 'Clamshell' Grill. While the cleaning was carried out the cable remained attached to a power outlet. This was contrary to the procedure set out in MRC 11A. 17. At the time of the accident Johnston had been directed by James Cantor, the second Assistant to the Store Manager to clean behind the Clamshell Grills including the external sides of the Clamshell grills and to clean the exhaust inlet ducts which were mounted on the wall at the rear of the Clamshell Grills. The position of the Clamshell Grills required the employees to move the Clamshell Grills away from the wall prior to cleaning behind the Clamshell Grills. 18. Although a number of people were working in the immediate area next to Johnston no one actually saw what occurred. According to Cantor some five minutes after Johnston had commenced cleaning he heard a "bang". On turning around Cantor could see Johnston in a half-fallen position with his head resting against a Clamshell Grill. Upon initial inspection, Cantor concluded that Johnston was unconscious. Cantor called out to another employee, Steve Worthington to assist Johnston. At this time another Store Manager, Jennifer Faughlin, came over with another employee and pulled the Clamshell Grill further away from the wall. The employees checked Johnston for a pulse and then rang for an ambulance. 19. The Clamshell Grill on which Johnston was working at the time of the accident was ordered in 1992 by Lyndhurst from a company known as Mercer Stainless Pty Ltd ("Mercer"), an agent of the manufacturer, Taylor Company Incorporated. When the manufacturer, Taylor Company Incorporated, a company based in the United States, supplied the Clamshell Grill it was hardwired internally but not supplied with external cables given the variation in power requirements between Australia and United States. 20. Mercer, which are regular suppliers to licensees of the McDonald's System and are aware of the surrounds and conditions in which the Clamshell Grill was to be used, was responsible for the supply of the external cable for the Clamshell Grill. However the external cable was not attached to the Clamshell Grill until it was installed. Mercer engaged the services of independent gold licensed contractors to supply cable length fitted with a plug to attach to the Clamshell Grill. 21. The Australian Standard AS AA Wiring Rules AS 3000 - 1991 (the "Australian Standard") sets out the safety requirements for all electrical installations in or on premises. Paragraph 1.4.1 states the methods of installation specified in the Standard shall be used to install electrical equipment. Where the Standard does not specify an installation method, equipment shall be installed in accordance with the generally accepted principles of safe and sound practice using methods that will protect the installation against mechanical or electrical failure under ordinary use, wear and tear, and any abnormal conditions which may reasonably be anticipated. 22. Paragraph 1.4.7.1 of the Australian Standard states "Any material immediately adjacent to or in contact with a conductor or cable shall be shaped so that it will not cause such abrasions of the conductor of its insulation, braiding, or sheathing as could lead to its mechanical or electrical failure". Paragraph 1.4.7.3 states "Cables run on the surface in places where they are liable to mechanical injury shall be adequately protected". 23. The external cable supplied and fitted to the said "Clamshell" Grill did not comply with the Australian Standard in that the cable specified was not adequately flexible for the designated purpose. Further the specified cable was not adequately insulated or protected. In particular the cable was inadequate in that it did not provide sufficient protection against mechanical injury from the wheels of the Clamshell Grill. 24. When Lyndhurst was supplied with the Clamshell Grill a handbook was provided by the manufacturer, Taylor Company Incorporated. The handbook for the relevant model 12 Clamshell Grill did not deal with cleaning behind the Clamshell Grill but only cleaning of the platens of the Grill. 25. A company known as J L Lennard Food Equipment Pty Ltd formerly known as Taylor HPL Pty Ltd ("Lennard") was responsible for the installation and commissioning of the Clamshell Grill at the premises on 2 December 1992. J L Lennard Food Equipment Pty Ltd is a subsidiary of Taylor Company Incorporated, the United States manufacturer of the Clamshell Grill. 26. Lennard provided training to the shift crew at the premises when they installed the Clamshell Grill. The training session included the cleaning and maintenance of the Clamshell Grill together with a practical demonstration of the cleaning procedure. The staff trained by Lennard then provided on the job training to other staff employed by Lyndhurst. According to Fiona Stubbs, the full-time Store Manager, employed by Lyndhurst at the premises, no instructions had been received by the staff to isolate the power supply to the Clamshell Grill prior to cleaning. 27. Lennard was also contracted by Lyndhurst, as were other electrical contractors from time to time, to carry out any maintenance work on the Clamshell Grill at the premises. This included regular planned maintenance in accordance with a schedule as well as fault repairs for all kitchen equipment at the premises. 28. In 1993, the First Defendant in conjunction with Lennard, arranged for Lennard to carry out inspections and repairs of Clamshell Grills as part of a program known as the "Beef Integrity Blitz" (the "Program"). The Program was implemented by the First Defendant to verify that the procedures used for storage, handling and preparation of food supplied by its outlets were in compliance with all of the necessary health standards. 29. A component of the Program required all Clamshell Grills in Australia at McDonald's outlets to be checked to ensure that they meet operating specifications. The inspections of the Clamshell Grills were carried out by Lennard in accordance with a specified checklist compiled jointly by McDonald's and Taylor Company Incorporated. The checklist included a reference to inspection of the electrical cable. 30. Lennard attended the premises and conducted inspections of the Clamshell Grills on dates including January 1994 and January, March, July and September 1995. 31. Examination by WorkCover of the Clamshell Grill and cable on the Clamshell Grill on which Johnston was working at the time of the accident revealed the following: a) The Clamshell Grill was an electrically powered Grill supplied by a 415 Volt AC 3 phase supply cable connected to a power supply outlet socket. The socket was positioned 440 mm above the floor and on the back wall behind the Grill. An isolating switch was positioned alongside the outlet socket which when activated would isolate the Grill. No residual current device was present. To gain access to both the outlet socket and the isolation switch the Clamshell Grill was required to be wheeled away from the back wall and placed up to a distance of one (1) metre away from the wall. The cable was attached to the Clamshell Grill 225 mm above the floor through the lower panel. Frequently, when Clamshell Grill was moved the cable was brought in contact with the floor surface. The floor, on examination, had a tiled surface, which was slightly abrasive. The cable was 1.8 metres in length and had been in place for some 4 years. b) The cable was 21 mm in diameter and contained five (5) insulated covered cores of which four (4) were 6 mm in diameter. Each core contained seven (7) strands of 1 mm diameter copper wire. The strands were coloured black, blue, white and red. The fifth core was 4.5 mm in diameter and coloured green to indicate an earth. The outer PVC sheathing of the cable was 2 mm thick and the sheathing on the southern Clamshell Grill had a flat surface worn along its length for a distance of some 870 mm. The length and position of the cable to the Clamshell Grill and outlet meant that the top side of the cable when visually inspected showed no evidence of wear and tear. It was only when the cable was lifted that it became apparent that the sheathing was worn by frequent contact with the floor surface. Two small sections along the worn surface had been abraded to such an extent that the inner cores of the cable were exposed. c) The configuration of the premises and location of the power outlet meant that power could not be isolated until the Grills were moved. Tests carried out on the night of the said accident by Integral Electricity showed that the cable on the said Grill was faulty. 32. It appears Johnston sustained a fatal shock when his left small finger came in contact with the inner cores of the cable. Post mortem results revealed that the charge exited through his ankle and lower leg, which was in contact with the Clamshell Grill. 33. Immediately after the fatal injury to Johnston, the First Defendant instigated a Nationwide Electrical Inspection Program, (hereafter N.E.I.P.). Each restaurant outlet was attended by a licensed electrician for the purpose of carrying out an inspection on all electrical equipment. In a number of outlets it was found that the cable attached to the Clamshell Grill on which Johnston was working ie. the movement of the cable across the floor surface had abraded the cable. 34. Subsequent to the incident, for the purposes of complying with notices issued by the WorkCover Authority of New South Wales pursuant to Section 31KA of the Occupational Health and Safety Act, 1983, and in relation to this matter, the First Defendant reviewed its records dating back to 1993 in relation to Clamshell Grills. These records do not disclose any record of a cable being damaged in the way that the cable at the premises was damaged. 35. As a result of the N.E.I.P. program the Defendants jointly with licensees of the "McDonald's Systems" instituted a number of changes. These included the following: a) Provision of Residual Current Devices for every power outlet located within each restaurant, including retrofitting all established restaurants. b) The requirement that power plugs and outlets located on grills, fryers and hotcake Grills be replaced to the Marachel type plug and outlet. c) The provision of accessible isolators for all Grills, fryers and hotcake grills, including retrofitting all established restaurants. d) The replacement of cables for all Grills, fryers and hotcake Grills with Flexolex cable. e) The provision by the First Defendant to Lyndhurst and other licensees of additional or amended instructions (as appropriate) for cleaning behind the Clamshell Grill as part of the McDonald's System. f) The Defendants engaging a specialist health and safety manager to assist in all aspects of Occupational Health and Safety, including the overall design and development of buildings for future McDonald's outlets. g) The First Defendant revising and updating its existing Hazard Management System and conducting Health and Safety/Hazard Management workshops nationally in September to November 1996 reinforcing the First Defendant's existing Health and Safety Program. h) Improvement of the First Defendant's periodic inspection program including implementation of a daily inspection procedure at restaurant level and amendments to the first defendants PM Card 81 and Safety Inspection Checklist. i) The immediate review of all restaurant building designs. j) A complete investigation by the First Defendant and the relevant suppliers and expert advisers of possible alternative cable routing for Clamshell Grill. 36. The First Defendant, McDONALD'S AUSTRALIA LIMITED [ACN: 000 697 763], has had the following prior convictions recorded: 09.11.93 OHS S.15 FINED $3,500 37. The Second Defendant, McDONALD'S PROPERTIES (AUSTRALIA) PTY LIMITED [ACN: 008 496 928], has had no prior convictions recorded.

[18]

Clarification of the Statement of Agreed Facts 11 Where a prosecution seeks to have a court take a matter into account in passing sentence (in addition to the plea or statement of agreed facts), it will be for the prosecutor to bring the matter to the attention of the court and call evidence in support of it. Similarly, the offender will need to produce evidence as to matters it seeks to have taken into account: R v Olbrich (1999) 166 ALR 330 at 336-337. 12 As to the standard of proof required, the sentencing judge may not take facts into account in a way that is adverse to the interests of the accused unless those facts have been established beyond reasonable doubt. If facts are to be demonstrated in favour of the defendant those circumstances must be proved on the balance of probabilities: Olbrich at 337. 13 The plea and the statement of agreed facts constitute a factual basis upon which the court may assess penalty. The prosecutor and the defendants relied upon additional evidence in relation to aggravation and mitigation which will be considered later in this judgment. However, there were some particular aspects of the statement of agreed facts which were unclear. 14 During the course of the proceedings the Court raised with the parties two matters going to the content of the agreement statement of facts. In relation to paragraph 18 of the agreed statement of facts an issue arose as to whether Mr Johnston was cleaning behind the grill at the time of the accident (and therefore whether the grill had been pulled away from the wall). A statement taken from James Cantor, the second assistant to the store manager, was tendered. This made clear that Mr Johnston had pulled the grill away from the wall and was cleaning behind the grill at the time of the accident. 15 As to paragraph 11, the defendants pointed to a memo sent from McDonald's to all stores on 14 June 1994 attaching a copy of Planned Maintenance Card, Maintenance Requirement Card 81 (MRC 81). The prosecutor raised as an issue whether the memo was received. The prosecutor failed, however, to establish that Lyndhurst did not receive the document beyond reasonable doubt. The Court will approach this matter upon the basis that the document was supplied to Lyndhurst by the defendants (although Mr Harmer, solicitor, who appeared for the defendants, properly conceded that this conclusion does not dispose of the question of a system failure in that the defendants are unable to verify the receipt by Lyndhurst for the purpose of ensuring compliance with the system).

[22]

The final determination of the apportionment of each of the above between the Defendants will be determinative of the ability of the Defendants to raise matters in mitigation. 3. In order to properly and correctly assess the culpability of each Defendant to the Wollongong Proceedings, the Commission should have considered and determined all facts in relation to all of the matters comprising the Wollongong Proceedings. 4. If the Commission sentences any Defendant in the Wollongong Proceedings prior to the final determination of all defended hearings (if any) or the entering of guilty pleas by all of the Defendants, the Commission may be led in to error in determining the appropriate sentence for an individual Defendant based on assertions of fact by a Defendant subsequently proven to be erroneous in the other related proceedings. 5. Further, the Commission should make appropriate arrangements when processing matters related to co-defendants, or those with relevant connecting factors, to ensure the Commission minimises the risk of disparity between penalties imposed on individual Defendants and therefore reduce the likelihood of appeal based on any allegation of lack of parity between Defendants. 20 This notice of motion was withdrawn (this being undertaken by the procedures adopted in a directions hearing held on 9 December, which will be referred to below, and confirmed by the defendants on 18 March). 21 Nevertheless the defendants have submitted that sentencing in this matter should be based upon an assessment of the culpability of these various entities and further that the nature and quality of the offence should be determined having regard to the amount of control exercised by the defendants "over the primary causal factors" (as opposed to other entities) and the existence of a system of work (created by the defendants) which, if adhered to, would have prevented the accident. The defendants made related submissions on the principles of totality and parity. 22 Leave was granted by Wright J, President, for the prosecutor to discontinue proceedings against Mercer brought pursuant to s17(1)(b) of the Act on 23 September 1998. 23 Lyndhurst entered a plea in relation to a charge brought against it pursuant to s15 of the Act. This plea was heard by the Court as presently constituted. 24 Various other prosecutions brought pursuant to s15 of the Act against Lyndhurst and prosecutions brought against Mr Green (a principal of Lyndhurst) were discontinued by leave of the Court on 24 November 1998. 25 On 9 December 1998, in proceedings before Wright J, President, there was a further refinement to the various proceedings as follows:

A plea of not guilty was noted in relation to the prosecution against Lennard (although a preliminary jurisdictional issue was foreshadowed in relation to that matter in relation to what was described as the proceedings in "McMillan, Britton and Kell Pty Ltd").
Leave was granted to amend the summons in the prosecution brought against the first defendant in Matter No. IRC1104 of 1998.
The first defendant entered a plea in relation to Matter No. IRC1104 of 1998 and the prosecutor sought leave to withdraw the remaining prosecutions brought against the first defendant. Leave was granted by the Court.
Leave was granted to amend the summons in the prosecution brought against the second defendant in Matter No. IRC1106 of 1998.
The second defendant entered a plea in relation to Matter No. IRC1106 of 1998.
Directions were given as to the filing and serving of all material relied upon for the pleas of guilty prior to the hearing of those matters. 26 The submissions of the prosecutor and the defendant as to sentencing upon the pleas of guilty were heard on 18 and 19 March 1999. On 19 March 1999 the Court reserved judgment in the matter. 27 On 28 April 1999 the Court relisted the matter to raise with the prosecutor and defendants three matters which were described by the Court as follows: One, the matter is primarily listed today as in the intervening period since the completion of submissions, I have been informed that the prosecution brought against Lennard will be discontinued by the prosecutor. That came to my attention during the course of the directions hearing in relation to a plea of not guilty in the matter of Lennard. This circumstance was not known at the time of the completion of the hearings.

[38]

In addition to the materials referred to above, the Defendants are aware that even in the limited material contained in the Prosecution Brief provided to the Defendants there is further material which is relevant to the "control" of Lennard, Mercer and the specialist subcontractor. 34 During the course of the proceedings on 29 June 1999 Mr Harmer identified that in relation to paragraph 4 that: We do put it as high as an application because we do not think we can do justice to our clients otherwise. We do seek a timetable to put on additional material and applications concerning that material but in doing so we appreciate the way in which this matter has emerged and it has been quite a lengthy process already ... 35 In substance Mr Harmer agreed that the submissions had exceeded the leave granted and that if an application was to be made that it should have been made by notice of motion, although he did so based upon his contention that the prosecutor had raised additional issues during the proceedings on 21 June. In any event, I consider that the document filed on behalf of the defendants on 25 June did exceed the leave given to the defendants. 36 A notice of motion was filed by the defendants on 6 July 1999 seeking leave to put on further evidence and submissions in relation to the question of any "ongoing control" exercised by Mercer and Lennard over matters relevant to the prosecution. 37 The defendants contended that the question of the existence of control by entities other than the defendants, and its impact upon this prosecution, was raised by the prosecutor for the first time during oral submissions on 21 June 1999. It was not possible, the defendants argued, to adequately respond to these concerns based upon evidence which had been filed prior to the question being raised and prior to the decision in McMillan, Britton & Kell Pty Ltd v WorkCover Authority of NSW (Inspector Blake) (1999) 89 IR 464. 38 On 21 July 1999 the Court heard argument on the notice of motion. The Court, in an ex tempore judgment, granted the motion and required the prosecutor and the defendants to file a program for the further evidence and submissions. 39 Short Minutes of Order were subsequently filed and initialled by the Court on 26 July 1999. The short minutes of order provided for further evidence to be filed by the defendants and the prosecutor in relation to this question as well as for further submissions to be filed by each party which would consolidate arguments raised in their earlier submissions made after 28 April 1999. The defendants filed further evidence on 10 September 1999 and consolidated submissions on 30 September 1999. The prosecutor filed consolidated submissions on these questions on 7 October 1999 and consolidated submissions in reply were filed by the defendants on 15 October 1999. The matter was again listed on 25 November 1999 for hearing and the Court then reserved decision in the matter. 40 An issue was raised by the Court with Mr Harmer as to whether any aspect of the conduct of the defendants' case as to mitigation might warrant a review of the discount which may otherwise be given to the defendants as a result of them having entered a plea. In their written submissions the defendants resisted any such approach. Having considered their submissions, I have concluded that the Court should not reduce or modify any discount the defendants should receive as a result of the plea of guilty in consequence of their conduct of this matter. Nor should the Court, in any other way, adversely affect the defendants as a result of any aspect of the course of the proceedings. 41 However, and making allowance for the issues raised by the Court on 28 April (and some shifting of the submissions of the prosecutor during the course of the proceedings), the manner in which the defendants have put their case in relation to their plea of guilty has prolonged these proceedings. 42 Having regard to the course of the proceedings, the resulting receipt of submissions over two stages and the very substantial volume of materials relied upon by the defendants, it is appropriate that the Court endeavour to summarise the submissions of the parties. For the same reasons the Court will review significant aspects of evidence before turning to the Court's conclusions. However, by the very nature of the extent of the materials and submissions it will not be feasible to summarise and review every aspect of them.

[44]

(e) The external cable and its insulation did not comply with the Australian standard for wiring AS 3000-1991. The cable was not sufficiently flexible for the designated purpose. 48 The prosecutor indicated that an important component in determining both the culpability of the defendants and their respective responsibilities were the licence and lease agreements. The plant (that is, the clamshell grill, the cable to the clamshell grill and the manner of operation and function of the grill) were the responsibility of the first defendant under the licence agreement. The first defendant had the right under the licence agreement to require a particular clamshell grill and the manner in which it would be operated. The second aspect pointed to was the layout of the restaurant. The grill had to be moved away from the wall in order to clean it and the isolation switch could only be reached when the unit was moved from the wall. This is the result of the design and layout of the particular restaurant which is the responsibility of the second defendant. 49 The prosecutor submitted that the location of the power supply and the isolation switch was the most significant issue in relation to the nature and quality of the offence. The situation of the isolation switch behind the grill in an inaccessible position (until the grill was moved) created the potential that in moving the grill a person could come into contact with the particular faulty cable and restricted the likelihood of the power supply being isolated by means of that switch. 50 The risks were obvious given that the employees were required to operate and clean high voltage equipment. The risk was foreseeable. Due to the positioning of the grill in the kitchen and the cleaning procedures the risk of an electrocution or exposure to electric shocks was foreseeable. The difficulty in isolating the power when cleaning the equipment was also obvious given the layout of the kitchen. The planned maintenance calendar did not actually refer to inspection of electrical equipment in relation to the grill. 51 There were simple remedial steps available, including the replacement of the cables with flexolex cable, the provision of residual current devices for power outlets and the provision of accessible isolators for all grills, fryers and hotcake grills. 52 The Court is entitled to take into account the defendants' pleas of guilty in mitigation. However, the objective seriousness of the offence is aggravated by the previous conviction of the first defendant. The conduct of the defendants in relation to taking of safety precautions both prior and subsequent to the breach is also relevant.

[45]

Submissions for the Defendants 53 Mr Harmer submitted that the Court should "take what is a common underlining substratum of facts, look to an array of entities who are involved in that substratum of facts and, under the principle of parity, properly apportion culpability between those various entities". He submitted that a number of parties have contributed to the overall situation including Mercer, Lennard, Lyndhurst and the two defendants (there was also a contribution by parties against whom prosecutions were never commenced). 54 He submitted that their culpabilities had to be assessed by reference to the degree of control and the respective legal obligations of the respective entities having some relationship to the incident. 55 In various parts of his submissions Mr Harmer used the expression 'McDonalds'. I understood this expression to be a shorthand reference to the system referred to in paragraph 10 of the statement of agreed facts incorporating also a reference to the first and second defendant acting in their respective corporate capacities. In order to properly convey the submissions put on behalf of the defendants, I have used the expression 'McDonalds' (where such expression has been used by the defendants). 56 It was submitted that the key steps which led to the accident were the defective cable, defective maintenance, training and operations contrary to the McDonald's system and the absence of a residual current device. The first three of those steps or causal factors were not the responsibility of McDonald's as McDonald's had properly relied upon the expertise of suppliers, installers and persons engaged in the maintenance of equipment as well as the obligations of licensees. 57 In relation to the positioning of the isolation switch behind the grill, Mr Harmer submitted: Our requirement, whilst defective if you like - and we acknowledge it in terms of it would have been superior by way of safety if the isolation switch was so located on top, it could have been turned off before one had to get behind the machine, we acknowledge that is a deficiency and we plead guilty to that and that is part of the agreed facts. We nevertheless say, having pulled the equipment away out from the wall, the procedure is very clear that you immediately isolate it, then you start cleaning it which included wiping down the cable. Its that departure that we say is critical leading to this particular incident. 58 Mr Harmer also relied on the fact that Mr Johnston was working behind the grill for some five minutes before the incident occurred. If the McDonald's procedure of turning the switch off before cleaning had been applied by Mr Johnston then the accident would not have occurred. However, Mr Harmer does not include the isolation switch as part of the four central factors. He made a submission as to that matter as follows: We acknowledge a deficiency based on the layout of the restaurant whereby you had to move out the grill to isolate or turn off the equipment, whilst that is something that is a deficiency and, in terms of the act, a reasonably practical step that could have improved safety on the day, we submit that, in the context of this particular prosecution, that wasn't a contributing factor to the actual accident. 59 Similarly, by reference to MRC 11A, it was submitted: We also say in the outline that that factor was not directly related in the chain of causation. Similarly we say in relation to MRC11A, which was the document that required isolation prior to cleaning, but the design and layout of the restaurant required moving of the equipment before isolation. As we have established, particularly through the additional paragraphs from the statement of Mr Cantor, whilst we acknowledge that is another reasonable practical improvement he could have made throughout the system, it wasn't in these specific circumstances attributable to this accident. 60 Mr Harmer acknowledged that the defendants held a pivotal point in the whole system and that the defendants had an ability to compel improvements in the operating system but submitted that it was reasonable for the defendants to rely upon advice received such as that received from Mercer and Lennard. 61 As to the licensees, it was submitted for the defendants that the defendants provided "assistance" to the franchisees by way of setting certain minimum standards. McDonald's carried out audits of compliance of the system where checks were undertaken in accordance with a checklist. 62 Overall, he submitted that the role of the defendants was comparatively minor in terms of the overall contribution to the accident, and that having regard to the nature and quality of the offence, the defendants' failures were not serious for the following reasons:

[68]

Supplementary Submissions by the Prosecutor and the Defendants 70 The additional submissions of the defendants concerned the specific involvement of various other entities, principally Lennard, Mercer and independent contractors engaged by Mercer in relation to the accident. They also addressed the question of the impact on these proceedings of the failure of WorkCover to prosecute certain of these entities and the withdrawal of proceedings against others. The defendants submitted that the failure to prosecute or the withdrawal of proceedings in no way detracts from the contribution of these entities to the overall failure to maintain a safe working environment. 71 The defendants submitted that in assessing the nature and quality of the breaches by the defendants, the Court should ensure parity between the different offenders and should adopt a particular approach to the assessment of the value and quality of the offence. This issue shall be later discussed in the consideration of the principle of parity. 72 The defendants submitted that Lennard, Mercer and the independent contractors engaged by Mercer to supply the cable for the clamshell grill had "control" (for the purposes of s17 of the Act) of various matters relevant to the incident at various times prior to 8 March 1996. Furthermore, the defendants alleged that Lennard and Mercer continued to have such "control" on 8 March 1996 by reason of their ongoing integral system wide involvement with the defendants' operations. In the alternative, the defendants submitted that even if Lennard, Mercer or the independent contractors engaged by Mercer did not have "control" of matters relevant to the incident on 8 March 1999, the presence of a historical contribution by these parties to the incident is a relevant matter to consider in mitigation of the defendants' breaches. 73 The defendants made submissions detailing the contribution of the various entities to the incident of 8 March 1996. The defendants submitted that various acts of Lennard contributed to the incident even in circumstances where Lennard did not have "control" such as to be able to be prosecuted under s17. The defendants pointed out that the clamshell grills are manufactured exclusively for McDonald's worldwide by the parent company of Lennard and the manuals relating to the operation of the clamshell grill were also produced by Lennard's parent company. Lennard also conducted training classes for the owners and operators of the defendants' restaurants in relation to the correct grill cleaning procedures and using and maintaining clamshell grills. 74 In addition, the defendants pointed to evidence which was said to support the conclusion that Lennard exercised "control" pursuant to s17 of the Act over matters relevant to the incident both prior to and on 8 March 1996. The following factors were said to indicate Lennard's "control" over matters prior to 8 March 1996: (i) Lennard installed the clamshell grill and could have advised either the defendants or the franchisee that the matters alleged against the defendants should be carried out before the clamshell grill was connected. (ii) Lennard provided training to the shift crew at the time of installation of the clamshell grill and a practical demonstration of the cleaning procedure of the clamshell grill. Lennard could have adjusted this training to remove some or potentially all of the risks associated with matters being prosecuted against the defendants. (iii) The unrefuted evidence of Inspector Fox was that the cable was wearing during its entire life. Lennard failed to identify this wear on the clamshell grill cable pursuant to the Clamshell Grill Evaluation Checklist. (iv) Lennard carried out planned maintenance at the Wollongong franchise on the clamshell grill on 13 September 1995. (v) Lennard conducted other inspections and maintenance of the clamshell grills at the Wollongong restaurant on other dates throughout 1994, 1995 and 1996 which, adopting appropriate safe working practices of isolation of the clamshell grill, failed to identify the problem with the cable. 75 The defendants identified a number of materials which were said to indicate the existence of ongoing "control" by Lennard on 8 March 1996. The material cited by the defendants in this regard may be summarised as follows: (i) Lennard was involved in supplying clamshell grills in Australia to be placed in new restaurants opened by the defendants. This involvement gave Lennard a continuing opportunity to identify safety matters which could be improved and advising either the defendants or individual restaurants of possible improvements. Lennard also provided training to the crews in each new restaurant in relation to the proper operation and use of the kitchen equipment, including the clamshell grills. (ii) The defendants submitted that Lennard performed an ongoing role as advisers to the system. Lennard, as approved suppliers to the defendants and their franchisees, continuously provided advice in relation to ways of improving the services and equipment (including clamshell grills) which they provided to the defendants and their franchisees. (iii) The defendants submitted that Lennard was responsible for the rectification of specific issues at restaurants of the defendants and their franchisees. Lennard was responsible for servicing all but 44 of the approximately 211 restaurants operated by the defendants in New South Wales and provided advice on modifications necessary to ensure that equipment conformed to Australian Standards. Lennard also tested and rectified clamshell grills which were not achieving the required specifications, designed, implemented and scheduled the Planned Maintenance Program and installed upgraded clamshell grills in accordance with the Clamshell Grill Replacement Program. (iv) The defendants submitted that Lennard performed an ongoing role as a result of its close business relationship with the defendants. The defendants contended that the Business Relationship Agreement reflected a close commercial relationship in which each party relied on the other for their expertise. As such, Lennard was in a position to identify safety issues concerning the matters which have given rise to the defendants' breaches. 76 The defendants submitted that the actions of Mercer contributed to the incident. Mercer was responsible for manufacturing some kitchen equipment and for co-ordinating the importation, supply and positioning of kitchen equipment in the Wollongong restaurant, including the clamshell grill and power cables. As Mercer was responsible for placing the equipment in the restaurant, it was in a position to have identified any difficulty associated with the location of the clamshell grill and, particularly, the location of the isolation switches. In addition, Mercer developed the Installation Checklist and could have identified the isolation switches as being inappropriately placed and notified the franchisee. The defendants alleged that in relation to these matters Mercer exercised "control" in the sense referred to in s17 of the Act at various times prior to 8 March 1996. 77 The defendants also submitted that Mercer continued to exercise "control" for the purposes of s17 by virtue of its ongoing involvement with the importation, supply and positioning of kitchen equipment in new restaurants opened by the defendants throughout 1995 and 1996. As part of this process, Mercer provided detailed technical drawings of the layout of the kitchens and a representative of Mercer visited each of the new restaurants upon completion to carry out a restaurant hand-over. Throughout 1995 and 1996, it was said that Mercer continued to provide advice to the defendants and their franchisees in relation to ways of improving the services and equipment, including development of the Clamshell Grill Replacement Program and the Kitchen Replacement Program. The ongoing business relationship between the defendants and Mercer also demonstrated that Mercer was in a position to identify safety issues relating to the defendants' restaurants. 78 The defendants also addressed the question raised in relation to the instruction issued by the defendants following the accident requiring circuit breakers to be activated prior to the equipment being cleaned. The defendants submitted that the charges as particularised are limited to matters which do not include the "isolation of power or disconnection of power before the movement of the grill generally". This is not, it was contended, a matter which is proper to be considered in relation to the nature and quality of the offence. 79 If the Court considers that it is appropriate to consider the "isolation of power or disconnection of power before the movement of the grill generally", the defendants submit that the design of the restaurant was intended to remove the necessity to isolate equipment at the circuit breaker. Requiring persons to access the switchboard was considered to be more hazardous than appliances in the restaurant and had the potential to isolate the wrong equipment and then work on "live" equipment. 80 In its consolidated submissions, the prosecutor noted that although there are not strictly co-offenders in respect of offences under the Act, the Court should adopt an approach to sentencing in the case of different offences arising out of the same factual circumstances which shows consistency and not disparity in punishment: Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326. However, in the absence of the prosecution of another party at which facts are determined and remarks on sentencing are given, the Court cannot strictly apply the parity principle. The Court is limited to considering factors such as reliance by the defendants on the expertise of other entities. 81 The primary submission of the prosecutor in respect of the arguments advanced by the defendants as to the "control" said to be exercised by Lennard and Mercer was that it is not appropriate for the Court to determine these issues. The entities concerned were not parties before the Court and have not had an opportunity to put relevant material before the Court. To adopt the approach proposed by the defendants and to determine whether certain entities had "control" is, it was said, tantamount to conducting a trial of those entities in their absence. 82 In the alternative, the prosecutor submitted that the evidence filed by the defendants does not establish that either Lennard or Mercer exercised "control" in the sense outlined by the Court in McMillan, Britton & Kell. That is, neither entity possessed a degree of control over the workplace which involved an ability to compel corrective action to secure safety. 83 The prosecutor argued that there is no evidence that either Lennard or Mercer had any ability to compel corrective action on behalf of the defendants or its franchisees. Lennard did provide advice and maintenance services to the defendants, however, the evidence suggests that these services were provided at the request of the defendants or its franchisees. The role of Mercer in the McDonald's system, on the other hand, was limited to assisting in the setting up of new restaurants. Furthermore, the prosecutor noted that there was no evidence that the safety issues that arose in the Wollongong restaurant also arose in other restaurants. As a result, involvement in the McDonald's system provided Lennard and Mercer with no opportunity to identify safety issues which gave rise to the defendants' breaches. 84 The prosecutor conceded that Lennard participated in planned maintenance programs, including maintenance attendances at the Wollongong restaurant on 19 January 1994 and in September 1995. The cable may have begun to wear over its lifetime, but no evidence was given as to the rate of deterioration or how evident the deterioration would have been at the time when maintenance was undertaken by Lennard. 85 The prosecutor also submitted that the instruction to turn off power by switching off the circuit breaker was a simple remedial step, which was introduced immediately after the accident. The existence of a simple and straightforward step, which could have been introduced prior to the accident, demonstrated the seriousness of the offences.

[69]

Initial Evidence for the Prosecution 86 The prosecutor tendered some documentary materials and called Patrick Joseph Fox, amplifying the information contained in the agreed statement of facts. Eleven photographs were tendered. Five photographs were taken on the evening of 8 March 1996 at the site of the accident and included a picture of 2 clamshell grills and electric supply cable (including worn sections of the cable and exposed strands of the core of the cable). There were a number of other photographs taken of the electric supply cable, including photographs simulating the position of the cable when a clamshell grill is wheeled away from its power source at a wall for cleaning purposes. The prosecutor also tendered a sketch depicting the electric supply cable with exposed strands, a photograph of a planned maintenance system, maintenance requirement card for grills ("MRC 11A") produced by the McDonald's Corporation in 1991, a safety inspection checklist and a planned maintenance system, including the maintenance requirement card for electrical maintenance (MRC 81). I shall later refer to MRC 81 in the discussion of the evidence of the defendants. 87 Paragraph 10 of the statement of agreed facts identifies that the first defendant stipulated the requirements for cleaning grills in MRC 11A. This was the procedure used prior to the accident. As will be discussed later, this document was amended by the first defendant after the accident by the bringing into existence of a further document entitled "Station Observation Checklist". MRC 11A emphasised the need to clean behind grills, but the principal caution to which employees are directed is fire hazards and to the heat of grease. After a number of preliminary steps are taken the document identifies the procedure to be followed. The power was initially turned off at the "grill switches" and not the power switch or circuit breaker. Cleaning was then undertaken on the front and upper parts of the grill. When this process was completed, a procedure is indicated for cleaning behind the grill as follows: 9. With the upper platens in the down and 'stand by' position, pull the grill away from the fire wall. Check back of upper platen for grease build up. If grease is apparent, wipe down area with a hot solution of McD APC from the sink proportioner. Wipe clean and dry area. Turn OFF interlock system, disconnect the power supply, and turn OFF circuit breaker.

[74]

Using a hot solution of McD APC from the sink proportioner, a nylon pot brush and high/low brush, scrub all of the areas listed in order in Step 11 including the floor. 88 The physical layout of the premises was such that the grill must be pulled away from the fire wall for the purposes of cleaning and before the disconnection of the electricity supply. MRC 11A does not take into account the risks associated with being unable to isolate the power supply until the grill was moved. This, no doubt, accounts for the concession by the defendants in paragraph 13 of the statement of agreed facts. The reference to a circuit breaker in this procedure appears to be a reference to the main power supply where circuit breakers are fitted. It is noted in paragraph 16 of the statement of agreed facts that cleaning was performed whilst the power cable was attached to the wall contrary to the requirements of MRC 11A. This, no doubt, represents a concession by the prosecutor based upon paragraph 9 of MRC 11A. However, that paragraph is not entirely clear as to the order of the steps to be taken in implementing the procedure and does not make emphatically clear (as later amendments to MRC 11A do) that the power must be disconnected as the first step once the unit was moved. Furthermore, the procedure in MRC 11A did not require the disconnection of power at the earliest opportunity by putting into place a procedure to ensure the disconnection of power at the outset of all cleaning procedures. 89 Mr Fox had been a Principal Inspector for the WorkCover Authority of NSW at the time of the accident and attended the premises on the night of the accident (at which time he took the photographs which were produced by the prosecutor in these proceedings). Mr Fox also investigated the accident on behalf of the WorkCover Authority. He is now retired and hence he is not the prosecutor in the case. 90 Mr Fox gave evidence that the electric supply cable was of a rigid construction and did not rotate. It extended whenever the clamshell grill was moved from its position adjacent to a wall for the purposes of cleaning (and at the point of full extension when the grill was moved from the wall for the purpose of cleaning was suspended approximately 75 mm above the ground). During the course of this movement and because of its rigid nature the cable would drag along a tiled floor which was abrasive in nature (the floor was so designed to prevent skidding). It became flattened on one side and eventually worn to a point where the internal core cables were exposed. 91 The prosecutor produced 2 electric supply cables for the clamshell grills. One cable exhibited earlier signs of wearing so that the inner core cables were not exposed. The other cable, with which Mr Johnston had come into contact on the night of the accident, had a number of exposed cores. The exhibit and photographs show one section of the cable with exposed white and blue cores (but with no exposed strands). Another section of the cable showed an exposed core with a red sheathing. However, that red sheathing had also been worn to a point where the live electrical conductors situated within the red inner core had been exposed in 3 places. Mr Johnston came into contact with these inner cores. 92 In cross examination Mr Fox indicated that, due to the inflexibility of the cable, the wear to the cable had occurred on one side only. The cable had been fitted to the clamshell grill since the restaurant was first opened which was for a period of approximately 4 years. He was uncertain of the period of wearing but expected that the wearing had commenced from the time that the unit was installed. 93 He indicated that the wear on the cable was not capable of detection by visual inspection unless the cable was disconnected or a person specifically examined the cable for the purposes of identifying cracks in the cable. The wear on the cable would be identified if the cable was being inspected for the purposes of checking its integrity. The cable which was installed failed to meet Australian standards. It was supplied to Lyndhurst, the operator of the restaurant, by Mercer. The Inspector was not aware as to whether Mercer had relied upon a specialist independent contractor to supply the cable. 94 Mr Fox also explained in cross examination that there was no residual current device fitted in relation to the power supply for the equipment. The only means of isolating the unit was to use the isolation switch. A residual current device detects the difference between current flows. In the result, if a residual current device was fitted, it would have activated to automatically cut the flow of electricity where a person came into contact with the exposed wires, as Mr Johnston had in the present case. 95 Mr Fox was not familiar with whether the residual current devices were utilised generally or extensively throughout the restaurant industry. 96 Mr Fox agreed in cross-examination that the defendants had provided the WorkCover Authority with extensive volumes of documentation requiring considerable work in their preparation. He also agreed that the defendants had given the WorkCover Authority "appropriate co-operation".

[116]

The first defendant provided to the licensees "resources" to meet their obligations with respect of inspection and maintenance as follows: i) A planned maintenance system for tracking, inspection, repair and maintenance of equipment. The 1996 planned maintenance calendar was annexed to the statement. It contained a heading "grill" which contained no specific inspection or maintenance requirements. However, under the heading "rooftop/refrigeration/misc" and by reference to MRC 81 there is a reference to "visually inspect electrical equipment" and "conduct annual electrical maintenance report (qualified electrician only)". ii) There was also annexed to the statement a document entitled "maintenance requirement card 81". This maintenance card was produced by 'McDonald's' and related to "electrical maintenance". The maintenance related to "all equipment and power outlets" and required a monthly check (carried out at a store level) and an annual check to be carried out by a qualified electrician. The monthly check required the manager to do a visual check on "all mobile equipment" and with respect of power leads, to "check for cuts or tears in insulation". The annual check required the checking of electrical equipment and there was supplied an electrical equipment maintenance report sheet which included an entry for "clam grill". There was a series of sub-entries which included "plug" and "lead". iii) The occupational health and safety program. There was annexed to the statement a document which was supplied to licensees as part of this program and laid down a series of safety obligations as part of McDonald's "corporate policy". This required a series of general obligations to maintain a safe system of work. The occupational health and safety package contained a safety inspection checklist, again produced by "McDonald's". That safety inspection checklist included the following requirements: "all wiring in good repair" and "all equipment in good repair, safe to use and safely secured". iv) The first defendant initiated a visit by Lennard to every restaurant with a clamshell grill as part of a "beef integrity program". Lennard conducted an inspection of the grill so as to ensure that "they were in good repair and that they met McDonald's operating specification". In addition to this "blitz" in June 1995 the first defendant advised that regular planned maintenance should be carried out on the grills including the inspection by servicemen at least every 6 months. This led to an operations bulletin being produced by "McDonald's" which indicated, under the heading "clamshell minimums", that there should be planned maintenance at certain intervals at a 6 month interval. It was further indicated that these inspections included inspection of component parts and inspections behind and inside the grills. There does not seem to have been any specific requirement for the inspection of power leads or cables. 109 The material contained in Exhibit I in the proceedings indicated that under the original announcement of the program the "inspection stage" of the Beef and Clamshell Blitz Program was conducted by a "McDonald's Operations person" and "Taylor HPL (or their agents)". As demonstrated by communications from the first defendant to Lennard on 10 February 1995 (found in the defendants' supplementary evidence), that program was conducted by the first defendant (see also paragraph 28 of the statement of agreed facts). 110 Paragraph 28 of the statement of agreed facts states that the Blitz was designed to verify that the procedures used for storage, handling and preparation of food supplied by its outlets were in compliance with all necessary health standards. Paragraph 29 of the statement of agreed facts states that a component of the 'Blitz' required all clamshell grills at restaurants of the defendants and franchisees in Australia to be checked to ensure that they met operating standards. It also stated that a checklist had been jointly prepared by 'McDonalds' and Lennard which included a reference to inspection of 'electrical cable'. 111 In their supplementary submissions the defendants contended that the Blitz included the inspection of "the clamshell grill cable". A memorandum dated 17 March 1995 (produced as part of the defendants' supplementary evidence) showed that a document entitled "Clamshell Grill Evaluation" was used during the Blitz program. This document referred to an evaluation of "cord frayed or split" under a heading "Mechanical Evaluation" and referred to a series of tests consistent with that description, such as checking that the turrets move freely, grease migration under the right side panel, etc. 112 The planned maintenance program scheduled on a six monthly basis and notice of details of the program was issued on 16 June 1995 by Taylor HPL (corresponding with an operations bulletin being issued, it would appear by the first defendant, in June as to the same matter). It was a separate initiative to the "Beef Integrity Blitz". The planned maintenance program had as its purpose the maintenance of grills within "Factory and McDonald's specifications" and to "identify and prevent where possible potential future mechanical failure of expensive components". It did not specifically address electrical maintenance or cables attached to the grills. The program did not appear to include electrical maintenance or electrical cable inspection. 113 It was put by the defendants that the original intention of the program was to be an annual inspection in line with the schedule established in MRC 81 (by reference to Tab 9 of exhibit I). However, if this was the intention, the document in question does not make this clear referring to the objectives of the program as "ensuring that the grills are operating to their highest capability" and ensuring "that the units are fully operational by making sure that the proper adjustments are maintained within factory and McDonald's specifications and that the mechanical components are in proper working order". 114 The defendants also submitted that whilst an examination of the clamshell grill lead is not specifically referred to in the maintenance program, the program should nonetheless be seen as incorporating such a requirement. One aspect of this submission is that the program required inspection of key components and functional and mechanical evaluation of all areas critical to the efficient operation of the grill and that this requirement would have brought in the earlier 'Blitz' evaluation, ie. the clamshell grill checklist. However, there are two difficulties with this proposition. Firstly, the first defendant in developing the program did not make this clear. Secondly, to the extent that the 'Clamshell Grill Evaluation' is relied upon, the reference to checking cords, as earlier mentioned, appears under the heading "Mechanical Evaluation" which raises some doubt as to whether any specific attention was being directed to electrical cables (noting that MRC 81 dealt specifically with this area). 115 The materials in exhibit I showed that Lennard installed a clamshell grill at the premises on 2 December 1992. There was then undertaken "clam grill evaluations" on 19 January 1994. The prosecutor summarised the evidence as to maintenance performed by Lennard for Lyndhurst at the premises as follows:

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16 April Planned maintenance 116 Ms Berney's statement essentially concerned steps taken by the first defendant after the accident. In summary these steps included:

The implementation of 10 safety measures recommended by the WorkCover Authority to prevent a recurrence of the accident. Ms Berney indicated that each area has been "addressed" by the first defendant.
A number of general safety initiates. These safety initiates included the nationwide electrical inspection program, a clean behind grill station of service checklist, a procedure for moving and cleaning of portable electrical equipment, the appointment of an external independent consultant, the recruitment of inhouse Employee Health and Safety Manager, equipment review, a hazard management system and a health and safety strategic plan. 117 The 10 areas recommended for improvement by Inspector Fox were set out in a document accompanying Ms Berney's statement. The document was entitled "progress with 'areas to be addressed' according to the WorkCover Authority of NSW as of 20 November 1996". The document indicated the "areas to be addressed", "who is responsible" and the "status" of the area. These changes have been referred to in the agreed statement of facts. I will shortly outline the submissions of Mr Harmer going to those matters. However, it is useful to provide some of the details from this evidence and, in particular, to refer to some of the recommendations of Mr Fox and the corresponding information introduced by the first defendant. The recommendations are set out below (and identified in italics). In each case the response by the first defendant is recorded against the recommendation.
There is to be developed an accountable periodic inspection document. This resulted in the MRC 81 being revised.
There is to be installed an accessible isolation switch for the clamshell grill to enable isolation before moving the grill. The installation of an accessible isolation switch was addressed for all new restaurants and remodels for all grills and fryers. An upgrade program for existing restaurants was initiated and commenced in October 1996. An interim procedure was adopted until the upgrade was completed which included the isolation of grills at the circuit breaker before cleaning took place. The restaurant upgrade program also addressed labelling of all power outlets and switchboards with labelling that can be easily understood by restaurant staff.
It was recommended that the capability of cable access in the grill through the rear vertical panel be investigated instead of the base or bottom panel. After discussions with grill manufacturers to investigate alternative measures, an interim measure was adopted in August 1996 which involved changing the routing of a cable from under the unit. Rather than the cable exiting from the bottom and running straight down to the floor the cable was routed out the bottom through a 90o bend towards the rear of the grill which eliminates a pressure point from occurring between the grill and the floor immediately beneath the grill. In addition to this routing change the cable was also replaced with a cable which can be rubbed back and forth over the abrasive tiles.
It was recommended that all non flexible cables be replaced with more flexible cables. In March 1996 an interim cable was implemented in all restaurants and for all replacement cables. Cables for all grills were replaced with flexolex cable as the minimum standard. Cables were fitted as part of a restaurant upgrade program. The approach was communicated to restaurants through a written equipment upgrade as well as a memorandum from the Managing Director to the system in September 1996.
The effectiveness and reliability of the installation of an earth leakage device on all electrical appliances was to be investigated. All new restaurants were supplied with residual current devices. The retro-fitting of residual current devices in all other restaurants commenced on 1 October 1996. 118 There was also accompanying Ms Berney's statement a number of documents relating to the general safety initiative reforms undertaken by the first defendant including the "Clean Behind Grills, Station Observation Checklist" and the specific initiatives arising from Mr Fox's recommendations. I refer to a number of those documents below.

[129]

Supplementary Evidence Filed by the Defendants 119 Pursuant to the Short Minutes of Order initialled by me on 26 July 1999, further evidence was filed by the defendants. It was to say the least voluminous. The material went to the relationship between the defendants and Lennard and Mercer and the alleged contribution of Lennard and Mercer and other parties to the incident of 8 March 1996. The material was, in part, objected to by the prosecutor. However, I have determined that the whole of the material shall be admitted into evidence. In my view, the material tendered by the defendants in respect of their relationship with Lennard, Mercer and the independent contractors is admissible in sentencing proceedings and is relevant in that it casts light upon the level of culpability of the defendants themselves. The role performed by Lennard and Mercer in the McDonald's system in relation to the installation and maintenance of equipment, as well as the training of staff and the provision of advice, may clearly be pertinent to the reasonableness of the defendants' actions and the reliance placed by either of the defendants on these corporations in ensuring premises and plant were safe. Similarly, the extent of, or dimensions of, the risk to safety and health of persons throughout the system established by the defendants may also be relevant in assessing the seriousness of the offence. 120 The material filed in relation to Lennard appeared to concern three broad issues. The material went to Lennard's role in the installation of equipment in new restaurants opened by the defendants, it's ongoing role as adviser in the McDonald's system and the provision of maintenance to individual franchisees. Some relevant aspects of that material are: (a) A document entitled "Equipment Department Projects J L Lennard: 1995/1996" lists equipment projects undertaken by Lennard during 1995 and 1996. The list indicates that Lennard undertook the installation of various equipment, including clamshell grills, in new restaurants and completed a range of maintenance tasks in relation to that equipment.

[134]

The program was designed and implemented by Lennard. However, the documents tendered with the supplementary material indicated that the defendants also performed a significant function in relation to the maintenance programs. It would appear that the first defendant played a role in instigating the maintenance program and prompting Lennard to complete the program. Documentation associated with programs, such as the material to be sent to McDonald's franchisees, was submitted to the first defendant for comment and approval. Suggestions were subsequently made for amendments to the program, including for particular items to be checked for wear. Lennard also regularly reported to the first defendant concerning the progress of the program. (e) A number of documents tendered also helped elaborate upon the nature of the relationship between the defendants and Lennard. A document entitled "Together We Will …" detailed the aspirations of Lennard, and its US parent company, to provide services to the McDonald's system and work with McDonald's to ensure the ever changing tastes and expectations of each and every customer are met. A meeting between McDonald's representatives and representatives of Lennard held on 30 June 1995 examined the relationship between the two parties. The Meeting Summary outlined the expectations of Lennard, key performance indicators, available labour hours and the mission statement. The overall objective appeared to have been to ensure that McDonald's and Lennard worked effectively together to provide services to McDonald's franchisees. 121 In addition to the material filed in relation to Lennard, a further bundle of documents was tendered which related to the activities of Mercer and its relationship with the McDonald's system. The documentation appeared to be directed to the significance of the role of Mercer in the McDonald's system by virtue of its function of importing, supplying and installing equipment in new restaurants opened by the defendants as well as replacing equipment in existing restaurants. Mercer also performed some role providing after sales service and advice. I shall refer to some aspects of this documentation as follows: (a) Correspondence and other documents related to Mercer's role in importing, supplying and installing equipment, including the clamshell grills, in new McDonald's restaurants opened during 1995 and 1996 as well as replacing equipment in existing restaurants. The correspondence demonstrated that upon receiving a request for equipment from a particular restaurant, Mercer would provide a quotation, a list of equipment which could be supplied and a document specifying the contract conditions. Mercer also provided lists of equipment and prices directly to the defendants and placed purchase orders for equipment to overseas suppliers. (b) Part of the materials concerned Mercer's participation in the Clamshell Grill Replacement Program and the Standard Kitchen Replacement Program. Mercer developed a program for replacing clamshell grills at participating restaurants. The program detailed the standard kitchen packages, equipment lists, prices, installation guides and drawings indicating the installation method. The action plan for the program indicated that upon receipt of purchase orders, Mercer would provide a quote, produce schedule for installation and delivery, organise transport routes, prepare site crews and inform the store of the installation schedule. Site visits were also conducted to any sites of particular interest or if problems existed.

[148]

While the offender can only be sentenced for the offence for which it has been convicted, the court is "bound to take into consideration the circumstances surrounding the offence of which the prisoner has been convicted, so long as those circumstances are not inconsistent with the plea or verdict": R v De Simoni (1981) 147 CLR 383 at 396. Such an approach is consistent with the Court's proper evaluation of an offender's antecedent history where it does not lead to the imposition of a penalty disproportionate to the gravity of the particular offence(s) charged: see Veen v The Queen [No 2] (at 477). 125 These principles are applicable to imposing criminal penalties under this Act (see Nesmat at 321). 126 By a plea of guilty the defendant admits all of the elements of the offence with which the defendant is charged. However, in assessing the appropriate sentence the decision of the court will be affected by the factual basis from which the court proceeds including what the offender did and the history and other personal circumstances of the offender: Olbrich at 331. 127 It is now well settled that a penalty for a breach of ss15, 16 or 17 must reflect the objective seriousness of the offence (or as otherwise described, the nature and quality of the particular offence): WorkCover Authority of NSW v Waugh (1995) 59 IR 89 at 96 (applying Independent Cargo and Wool Services Pty Limited v Mingare (unreported, Fisher CJ, Glynn and Peterson JJ, Matter No. CT 1041 of 1992, 10 March 1994, at 4)); Warman International Limited v WorkCover Authority of NSW (1998) 80 IR 326 at 339; Inspector Hannah v Wonar Pty Limited (unreported, Fisher CJ, Glynn and Cullen JJ, Matter No. 1214 of 1990, 30 June 1992 at 9); Inspector Haynes v James Glass and Aluminium Pty Limited, (unreported, Fisher CJ, Matter Nos. 772-775 of 1991, 20 May 1994 at 6) and Air Express at 71. 128 Whilst the true nature of the penalty lies in the nature and quality of the offence and not merely the result of the offence, I agree, with respect, with Hungerford J in Wong v Melinda Group Pty Limited (1998) 82 IR 118 at 131 where his Honour stated: However, 'the occurrence of death or serious injury manifests the degree of seriousness of the relevant detriment to safety': per Hungerford J in Watson v Southern Asphalters Pty Limited (unreported, NSW Industrial Court, Hungerford J, CT 95/1260, 21 March 1996), p19; and 'the gravity or otherwise of the potential risk flowing from breach and its foreseeability are clearly relevant as are the measure of the gravity of the breach itself and the measure of culpability'; per Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 at 5. 129 Hill J in WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Matter No. CT 1280 of 1995, 2 April 1997, at 10) dealt with the relevance of the actual consequences of the breach as follows: While the gravity of the breach in a particular case may not necessarily be reflected in its actual consequences, the gravity of the consequences or likely consequences is nevertheless relevant in determining the gravity of the risk. In Hannah v Wonar Pty Limited the Full Court stated: 'The primary factor falling for consideration in relation to penalty, is the nature and circumstances of the offence. The result of the circumstances may be relevant in a very limited way, in the sense that it may illustrate the seriousness of the act or omission involved in the breach of statutory duty being assessed. Obviously a breach that was quite unlikely to lead to serious consequences, might be assessed on a different basis to a breach where there was every prospect of serious consequences.'

[150]

(See also Warman at 329) 133 However, the primary factor to be considered in assessing the penalty to be imposed is the objective seriousness of the offence. Particularly in relation to serious breaches under the Act, subjective factors must play a subsidiary role in the determination of penalty to the gravity of the offence itself. In Lawrenson Diecasting, after considering the decisions in Nesmat, Alcatel and Warman, the Full Bench of the Commission found (at 472-475): It is appropriate in many cases to afford a degree of leniency in recognition of a plea of guilty by the defendant. The Court is required to take into account a plea of guilty by virtue of s.439 of the Crimes Act 1900 (NSW). In Siganto v R (1998) 159 ALR 94, the majority of the High Court explained the rationale for this approach. In their joint judgment, Gleeson CJ, Gummow , Hayne and Callinan JJ observed (at 99): 'A person charged with a criminal offence is entitled to plead not guilty, and defend himself, or herself, without thereby attracting the risk of the imposition of a penalty more serious than would otherwise have been imposed. On the other hand, a plea of guilty is ordinarily a matter to be taken into account in mitigation; first, because it is usually evidence of some remorse on the part of the offender; and secondly, on the pragmatic ground that the community is spared the expense of a contested trial. The extent of the mitigation may vary depending on the circumstances of the case. It is also sometimes relevant to the aspect of remorse that a victim has been spared the necessity of undergoing the painful procedure of giving evidence.' ... As recognised in Alcatel , the extent of the reduction or "discount" in penalty which will be afforded in consideration of subjective features of a case will depend on the nature of the subjective factors and the circumstances of the case. For example, the decision of the Court of Criminal Appeal in Winchester (1992) 58 A Crim R 345 at 350 properly indicates that the degree of leniency to be afforded based upon an early plea of guilty will depend upon the whether or not the plea of guilty resulted from a recognition of the inevitable. It is also appropriate to consider the nature of any assistance provided by the defendant to the investigation of the offence.

[159]

As we have observed, the primary factor to look at in relation to the penalty to be imposed is the objective seriousness of the offence. Particularly in cases involving a serious breach of the OH&S Act, subjective factors, such as a plea of guilty, co-operation with the investigation and subsequent measures taken to improve safety, must play a subsidiary role in the determination of penalty to the gravity of the offence itself. While the court must keep in mind not only facts which establish the seriousness of the offence, but also those which tend to mitigate that seriousness or exculpate the offender (see Camilleri's Stock Feeds Pty Limited v Environmental Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P), the presence of the subjective factors referred to should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence. 134 In any event, it is appropriate to have regard to the objective gravity of the offence so as to arrive at a proper basis for sentencing against which other factors can be assessed: R v Dodd (1991) 57 A Crim R 349 at 354 and R v Lett (unreported, NSW Court of Criminal Appeal, Hunt CJ, Sully and Levine JJ, Matter No. 60112 of 1994, 27 March 1995); R v Allpass (1993) 72 A Crim R 561 at 563 and Lawrenson Diecasting at 476. 135 The maximum penalty for offences under s17 was doubled from $250,000 to $500,000 for corporations for offences committed after 1 February 1996 and before 1 September 1997 under the WorkCover Legislation Amendment Act 1995. 136 Both Ms McDonald, counsel for the prosecutor, and Mr Harmer for the defendants, submitted that the maximum penalty prescribed for the offences faced by the second defendant was $500,000. However, it was also agreed that the first defendant faced a maximum penalty of $750,000, due to a prior offence concerning that defendant. 137 Having regard to the provisions of s51A(1)(a) of the Act and the decisions of this Court in WorkCover Authority of NSW (Inspector Mayo-Ramsay) v Capral Aluminium Ltd (1999) 90 IR 256 at 259-262; WorkCover Authority of NSW (Inspector Tyler) v The Roads and Traffic Authority (unreported, Kavanagh J, Matter No. IRC1284 of 1998, 31 August 1999) and Alan Broomhand v BHP Steel Pty Ltd (unreported, Hungerford J, Matter No. IRC3440 of 1998, 17 September 1998), I consider that the submissions as to the maximum penalty were correctly made. 138 Section 51A of the Act was inserted in its present form by the WorkCover Legislation Amendment Act 1995 which commenced on 1 February 1996. The former provision was in a different form. It required a wilful repetition of the act or omission and had no application to a corporate defendant. 139 In this case the previous conviction occurred before 1 February 1996. In WorkCover Authority of NSW (Inspector McDonald) v Commonwealth Steel Company Ltd (1999) 90 IR 297 at 302, Hungerford J dealt with an issue arising in that matter as to convictions occurring before 1 February 1996 as follows: Here, s.51A(3) expressly applied the provisions of the section, as it says, "even if the previous offence concerned was committed before the commencement of this section". I have to say, but without finally deciding, that I have serious doubts Mr. King is correct on this point but it will have to await determination in a later case after full argument has been heard. 140 This issue was not argued before me with the prosecutor and the defendants approaching the prosecution upon the basis that the previous conviction of the first defendant involved the operation of s51A. Having regard to the provisions of s51A(3), and the approach adopted by the prosecutor and the defendants, it is appropriate to treat the prior conviction of the first defendant in the present matter as being within the scope of s51A(1)(a). 141 Furthermore, a number of principles may be identified in relation to the maximum penalty for the offence:

The maximum penalty in a general way indicates the seriousness which Parliament, representing the people, has viewed the offence and represents the starting point for the assessment of penalty as representing the worst case in the class of the defined offence: Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 370 at 380;
The maximum penalty may be appropriate where the level of culpability is so extreme that the community interest in retribution and punishment can only be met by such a punishment. The maximum penalty for any offence is a sentencing option reserved for cases which can be properly characterised as falling within the worst category of cases for which that penalty is prescribed: R v Vusumuzi Twala (unreported, Court of Criminal Appeal, Matter No. 60187 of 1993, 4 November 1994 at 2); R v Dodd (1991) 57 A Crim R 347 at 354. Such a case must involve an absence of any facts mitigating the objective seriousness of the crime (as distinct from any subjective features mitigating the penalty to be imposed): Kalajzich (1997) 94 A Crim R 41 at 51; Fernando v Fernando (1997) 95 A Crim R 533 at 536. It was pointed out by the Full Court of the Industrial Court of New South Wales in Independent Cargo and Wool Services at 4: The maximum penalty is designed to furnish out one end of the scale. Thus whilst penalties should not be compared in terms of some mathematical ratio "it must be true that in any given case the area available for consideration must be measured between no imposition of a penalty at one end and the maximum at the other. (at 4)
However, it does not follow that a lesser penalty than the maximum must be imposed if it is possible to envisage a worst case (see earlier extract from Camilleri's Stock Feeds; see also Saffron (No 3) (1989) A Crim R 123 at 126); Twala at 2.
A significant increase in the maximum penalty represents the level of community concern about conduct proscribed under the Act which should be reflected in the sentences which trial courts impose: Christopher Tom Jurisic (1998) 101 A Crim R 259 at 274; Slattery (1996) 90 A Crim R 519 at 524; Ferguson v Nelmac Pty Ltd (unreported Wright J, President, 24 May 1999 at 40).

[160]

Principle of Parity and the Notion of Contribution by Other Entities 142 The defendants submitted that in assessing the gravity of the offences, the Court should ensure "parity" between "offenders" whether prosecuted or not. This submission derives from submissions put by the defendants in mitigation as to the contribution of certain entities to the accident, particularly in relation to the installation and training in relation to the operation and maintenance of the clamshell grill. 143 The defendants also submitted that equal justice (as the underlying basis of parity) is a factor to be taken into account in assessing penalty, even when other parties involved in the factual matrix of the prosecution are not prosecuted. They contended the Court should adopt, in order to ensure parity, a particular approach to the assessment of the nature and quality of the offence. This contention was expressed thus: Similar to the submissions made by the Defendants on 18 and 19 March 1999 in relation to Mercer and the independent contractor responsible for the supply of the cable to the clamshell grill which was the genesis of the incident at Wollongong, the Defendants submit that in assessing the nature and quality of the breaches of the Defendants, the Commission, to ensure parity between offenders (whether prosecuted or not), should: (a) consider the overall nature and quality of the complete failure which constitutes the failure to maintain a safe working environment; (b) consider the contribution by each party (including those against whom proceedings either were not initiated or were discontinued) who had responsibility (at any relevant point in time in relation to the matters relevant to the Defendants breaches) under the Act for ensuring and maintaining the safe working environment regardless of whether the contribution arises from matters over which third parties have "control" as defined for section 17; (c) only then assess the nature and quality of the offences of the individual parties; and (d) then apply the relevant factors in mitigation for each Defendant. 144 Thus, the defendants submit that, having regard to the principles of 'equal justice', the Court should determine the contributions of each entity both with respect to the "control" exercised by those entities for the purposes of s17 and more generally (and alternatively) in relation to the contribution of such entities to the accident, including the exercise of expertise and skill of those parties. The defendants rely upon Wong v Melinda Group Pty Ltd (1998) 82 IR 118 and Nesmat to submit that the principle of 'equal justice' is applicable to entities which have not been prosecuted such as Lennard and Mercer. 145 It was further submitted by the defendants that having regard to the failure of Lennard to carry out certain maintenance work (being an omission subsisting at the time of the accident) it was "inappropriate for the proceedings against Lennard to have been discontinued with respect to an ongoing failure by Lennard to carry out such maintenance as was necessary to ensure that the clamshell grill was safe". It was also submitted that having regard to the evidence now placed before the Court, it was open to WorkCover within the time period provided by statute to have brought prosecutions against Lennard and Mercer pursuant to ss15 and 17 of the Act. 146 Whilst agreeing that the Court can take into account in mitigation the principle of parity and may especially have regard to the absence of prosecution of another party (and the reliance of the defendants upon the expertise or skill of another party, including the general contribution of another party to the circumstances of the offence), the prosecutor submitted that it was inappropriate for the Court to determine parity by the adoption of the procedures proposed by the defendants and further that: It is not appropriate for the Commission to determine that issue or to follow the procedure set out in paragraph 1.6 of the defendants' supplementary submissions on the grounds that the entities concerned are not parties before the Commission and have not had an opportunity to put relevant material before the Commission. To adopt the approach advocated by the defendants and to determine whether certain entities had "control" is tantamount to conducting a trial of those entities in their absence. 147 The principle of parity is important to the administration of justice as its operation ensures that there does not occur disparity in sentencing: Griffiths v The Queen (1977) 137 CLR 293 at 326-327. 148 The principle of parity has a distinctly different operation to the principle of totality, although both principles ultimately have as their purpose the avoidance of a justifiable sense that an injustice has occurred. Justice Kirby in Postiglione v The Queen (1997) 189 CLR 295 at 341 described the distinction in the context of the overall process of sentencing as follows: The sentencing judge must first reach a conclusion as to what seems to be the appropriate sentence having regard to the maximum fixed by Parliament for the worst case and the norm that is appropriate to the objective criminality of the case. The judge must then adjust that sentence, where appropriate, for the factors personal or special to the offender, discounted by any relevant considerations (for example co-operation with authorities or absence of remissions). But it still remains for the judge to look back at the product of these calculations and discounts. It is then that the sentencing judge must consider whether the resulting sentence needs further adjustment. It may do so because it is out of step with the parity principle requiring that normally like cases should be treated alike. Or it may offend the totality principle because, looking at the prisoner's criminality as a whole, the outcome is, in its totality, not "just and appropriate". The last-mentioned conclusion will the more readily be reached where the judge comes to the conclusion that the outcome would be "crushing" and, as such, would not hold out a proper measure of hope for, and encouragement to, rehabilitation and reform. (See also McHugh J at 306 and 313) 149 The principle of parity was succinctly stated in the joint judgment of Dawson and Gaudron JJ in Postiglione (at 301-302) as follows: The parity principle upon which the argument in this Court was mainly based is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated. On some occasions, different sentences may indicate that one or other of them is infected with error. Ordinarily, correction of the error will result in their being a due proportion between the sentences and there will then be equal justice. However, the parity principle, as identified and expounded in Lowe v The Queen , recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to "a justifiable sense of grievance". If there is, the sentence in issue should be reduced, notwithstanding that it is otherwise appropriate and within the permissible range of sentencing options.

[161]

Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality. 150 Whilst the principle of parity normally operates in relation to co-offenders or across the range of those convicted of the offence in question (see Signato v R (1998) 73 ALJR 162 at 170 and in relation to the same crime Postiglione at 309), this Court held in Warman (at 341) that where defendants (not being co-offenders) are prosecuted under different sections of the Act, the Court should nonetheless adopt an approach to sentencing which "shows consistency and not disparity in punishment in the same way as discussed by Mason J in Lowe" where there exists common factual circumstances giving rise to the charges. It should also be noted that the Court considered parity in Warman in the context of a labour hire company and the defendant who utilised that labour. 151 Hence, the decision in Warman would require that the defendants, even though prosecuted under different sections of the Act, shall be treated consistently in accordance with the principles in Lowe v The Queen (1984) 154 CLR 606. The principle is also applicable to the consideration of Lyndhurst and each defendant. Lyndhurst was prosecuted under a different section of the Act, but was the employer of the deceased worker under licence and lease arrangements with the defendants. The prosecution of Lyndhurst and the defendants arise out of the same factual substratum. 152 Nevertheless, the principle of parity only operates to the extent of comparing like with like. Differences in sentences arising from different circumstances will not violate the principle. These factors will include, in the case of the defendants, differences in the maximum penalty for the offence: Signato v R (1998) 73 ALJR 162 at 170. 153 In so far as the defendants' submissions are based squarely upon the principle of parity or equal justice, they find no foundation in Lowe or Postiglione. Nor do they find support in the modification of the operation of the principle as stated in Warman. In each of these decisions the principle was applied to offenders actually prosecuted in relation to a common incident (albeit, as found in Warman, the principle is not restricted to co-offenders facing the same charge in relation to prosecutions brought under the Act). The principle was not applied in relation to persons (natural or otherwise) not prosecuted. The principle was not applied to determine the culpability of such persons in law regardless of a prosecution being commenced or continued. Nor was it applied in such a manner as to require an assessment as to whether a prosecution should have been brought or continued. 154 However, it is necessary to consider the decisions in Wong and Nesmat and to further examine the extent to which the approach contended for by the defendants may otherwise be appropriate in considering their culpability under the Act. 155 In Nesmat (at 323), the court considered that the withdrawal of a prosecution against the Public Works Department, whose role was instrumental in the accident in that case and upon whom the defendants had relied, resulted in the sentence imposed giving rise to a "justifiable sense of injustice". The court considered that this factor beared upon the issue of the "nature and quality of the offence and the degree of culpability of the appellant". In that matter the Public Works Department had control of the site where work was performed and had entered into a contract with the appellant to perform work on its facility without advising the appellant that the place where the work was to be performed was 'live' or taking any steps to regulate access accordingly. 156 In Wong a window cleaner died after falling from a building owned by the defendant. The defendant was prosecuted pursuant to s17 of the Act. The defendant was the only person charged under the Act even though the window cleaner was not its employee and it had not been informed that work on window cleaning was occurring (contrary to its policy that work should not be undertaken). No steps had been taken to secure the safety of the window cleaner. The court concluded that the defendant was a victim of circumstances (at 732). 157 The fact that the defendant was the only person charged and was not informed of the cleaning taking place was considered relevant to determining penalty. The court had regard to "equity of treatment in terms of the relative seriousness of the offence" (at 122). The court also reviewed the culpability of various entities (such as the cleaning contractor who engaged the window cleaner) in assessing the source of the detriment to safety. 158 In my view, the court did not apply the principle of parity per se in Nesmat or Wong. The court did not assess the relative penalties appropriate to various offenders (regardless of the sections charged) but rather had regard to the nature of the detriment to safety occasioned and the contribution of the defendant to such detriment in assessing the objective seriousness of the offence committed by the defendant. In doing so the court had regard to the actual contribution of the defendant for the purposes of assessing penalty. Thus, in Wong the court had regard to the fact that the defendant was virtually wholly removed from the causal factors for the incident or the work actually performed by the window cleaner and even lacked knowledge of the performance of the work. 159 The relationship between the defendants and Lennard, Mercer and the independent contractors is relevant to the extent that it casts light upon the level of culpability of the defendants themselves. The role performed by Lennard and Mercer in the McDonald's system in relation to the installation and maintenance of equipment, as well as the training of staff and the provision of advice, may clearly be pertinent to the reasonableness of the defendants' actions. The culpability of the defendants should be assessed in light of the systems which were in place and the reliance which was placed upon third parties to provide various services both in relation to the particular restaurant involved in this case and in the system of safety employed in the entire McDonald's system. The absence of a prosecution of another entity merely serves to emphasise the unfairness that may be occasioned to a defendant in the assessment of the objective seriousness of an offence if a proper assessment of their contribution to an accident is not undertaken. 160 This approach is consistent with the approach in Nesmat and Wong. Nothing in the decision in Nesmat warrants the adoption of the further approach contended for by the defendants that the Court should assess, in the context of the sentencing of the defendants, whether a prosecution should have been continued against Lennard and Mercer. Nor is it consistent with the principle of parity or the abovementioned decisions for the Court to embark upon an inquiry in sentencing proceedings which, in substance, would require the Court to make specific findings as to the culpability of such entities under s17 and the 'nature and quality' of any offence committed by them. 161 Embarking upon an inquiry as to whether prosecutions should have been commenced or continued against various entities, or whether those prosecutions may have been successful, would involve the Court conducting a procedure which would be, as the prosecutor submitted, tantamount to conducting a trial of the other entities. In any event, the Court would, if it adopted the contentions of approach by the defendants, be required to make unqualified adverse findings concerning an entity which had no opportunity to answer the allegations made against it. Further, the inappropriateness of the procedure is further demonstrated by reference to the nature of the material relied upon for such findings which may be inadmissible against those entities in a defended prosecution and could not be properly challenged or tested. 162 I do not consider that such an approach was adopted by the court in Wong. However, if such an approach was adopted, I should note that I would not follow it. 163 In order to deal with the submissions advanced by Mr Harmer in this area, I have, for convenience, referred generally to 'the defendants'. However, in relation to the question of contribution, it is necessary to distinguish between the charges, as particularised, which were laid respectively against the first and second defendant. The charge against the first defendant was particularised as a failure to ensure that the plant, in this case the clamshell grill, was safe and without risks to health and safety. The charge against the second defendant, on the other hand, was particularised primarily as a failure to adequately provide for and ensure the design, layout and specification of the premises were appropriate, particularly having regard to the means of power supply to various equipment. 164 The submissions of the defendants in relation to the contribution of Lennard and Mercer concentrated substantially upon the alleged contribution of those parties to the safety of the clamshell grill. The only major exception was the contention that Mercer, through its involvement with placing kitchen equipment in restaurants of the defendants and their franchisees, was in a position to have identified the difficulties associated with the positioning of the equipment and particularly the placement of the grills and the isolation switches. Apart from the exception I have mentioned, however, the submissions as to contribution relate solely to the charge laid against the first defendant.

[162]

Consideration 165 I shall first consider the objective seriousness of the offences. Having regard to the charges laid against the defendants, the statement of agreed facts and the evidence and submissions of the prosecutor and defendants, I consider that the detriments to safety occasioned by the defendants to be threefold as discussed below (with reference to the particular act or omission for each defendant and putting aside for present purposes the issues concerning the contribution by other entities and the defendants' reliance upon those entities in the system operated at the restaurants). 166 Firstly, there was a failure to ensure that the grill was disconnected from electricity before cleaning or steps in preparation for cleaning (such as moving the grill from the wall) were undertaken by employees so as to avoid the risk of electrocution. 167 The second defendant designed the premises in such a way as to effectively prevent the disconnection of the electricity at the power outlet before movement of the grill; a step necessary to be taken in the cleaning process. 168 The detriment to safety could have been removed by the second defendant altering the premises so as to situate the isolation switch at a location which was accessible and clearly identified by appropriate labelling without the requirement to firstly move the grill. 169 Control was exercised by the first defendant over franchisees, pursuant to the requirements of the licence and for the purposes of ensuring conformity with the McDonald's system. The first defendant issued MRC 11A to Lyndhurst specifying the requirements for cleaning behind grills (noting that Lyndhurst's contribution to this process will be separately discussed). 170 The stipulations for cleaning in MRC 11A were defective in that: (a) They did not take into account the risks associated with being unable to isolate the power supply until the grill was moved from the wall. (b) Having regard to the inadequate design of the premises (requiring the moving of the grill to isolate the power at the power switch), it did not make it clear that the power must be disconnected from the grill at the first available opportunity in the cleaning process. (c) Paragraph 9 of MRC 11A does not make clear that disconnection should occur as the first step to be taken immediately after the movement of the grill for cleaning. This was made clear in the document entitled "Clean Behind Grills, Station Observation Checklist" produced by the first defendant after the accident. (d) In any event, and in the absence of an alternative safe method, the first defendant could have required, as it did after the accident, that relevant circuit breakers be switched before work on the units commenced. 171 The nature and quality of the offence is evidenced by measures which were in place to safeguard employees from those risks both before the accident occurred and those introduced thereafter: WorkCover Authority of NSW v Capral (1998) 82 IR 468 at 478 and University of Sydney at 20 and 21. 172 The defendants submitted in their supplementary submission that the charges as particularised against the defendants did not include the "isolation of power or disconnection of power before the movement of the grill generally" and was, therefore, not appropriate to be taken into account in relation to the nature and quality of the offences. This submission is directed to the third issue raised by the Court on 28 April and is concerned with the use or otherwise of circuit breakers (see in this respect the defendants' supplementary submissions filed on 30 September in paragraph 4.2 and submissions in reply in paragraph 6.1) rather than the question of access to power switches at power outlets (in respect of which the defendants admitted certain failures). 173 In my view, the failure to use circuit breakers is applicable to the assessment of the nature and quality of the offence to the extent that it represents a simple remedial step which, in fact, was introduced immediately after the accident, although I agree with the defendants' submission that it is but one limited consideration in the assessment of the gravity of the offence. As to the difficulties associated with the use of circuit breakers raised by the defendants in paragraph 4.2 of the defendants' supplementary submission, there appears

[163]

to be little, if any, evidence in support of such propositions which, in any event, have to be judged in the light of the defendants' adoption of those procedures (albeit for a limited time period) after the accident. 174 By way of mitigation of failures associated with the requirements for cleaning imposed by the defendants, it was submitted that the inability to isolate the grill until movement from the wall was not directly related to causation because there was a five minute delay between moving the grill and electrocution. 175 I consider that this submission misconceives the appropriate test to determine the detriment of safety for the purposes of the section. Section 17, like ss15 and 16, requires that the liability of the employer be established by an examination as to whether there is a causal nexus between the breach of statutory duty and the detriment occasioned to the employee and not, as appears to be at least implicit in the defendants submission, by attention being given to the relationship between the conduct of the defendants and the actual accident or hazard that caused the fatality (see Drake v WorkCover Authority of NSW (1999) 90 IR 432 at 448 and 452; State Rail Authority of NSW v Dawson (1990) 37 IR 110 at 121; Haynes v CI & D Manufacturing Pty Limited (1995) 60 IR 149 at 157 and 159 and CSR Limited t/as CSR Wood Panels v WorkCover Authority of NSW (unreported, Bauer J, Matter No. CT1176 of 1994, 10 August 1995)). 176 The break in time between the movement of the grill and the cleaning operation and electrocution does not break the causal nexus in relation to the offence. The detriment to safety was occasioned by the failure to ensure the disconnection of power before the cleaning operation commenced or steps necessary to be taken in preparation thereof. 177 The procedure dictated by the restaurant layout requiring the equipment to be first moved before isolating power necessarily increased the risk that an employee would not adhere to a procedure designed to have the power supply disconnected before cleaning (assuming that such a procedure was in place). 178 It is important to bear in mind that the employee conducted the cleaning on equipment which, at least in relation to its electrical components, was known to be dangerous. This is plainly reflected in the maintenance instructions sent by the first defendant to the stores (namely, MRC 81). The exposed cable represented a risk to all employees engaged in moving or cleaning the grill. 179 Secondly, the second defendant failed to equip the restaurants with residual current devices. The introduction of the residual safety device would have, in the same way as the fail safe device referred to by Hill J in WorkCover Authority of NSW v Atco Pty Ltd (1998) 82 IR 80 at 84, prevented the accident from occurring. I note that the defendant accepted in its submission that the residual current device would have prevented the accident (although it submits that the residual safety device only arises at the end of the chain of causation not otherwise involving the defendants). 180 Thirdly, the defendants conceded that they failed to identify the risk associated with the movement of portable equipment in the procedures for electrical maintenance and to provide adequate information to allow the identification and management of electrical hazards such as the risk of mechanical injury to cables and other electrical components by frequent movement (although this matter relates essentially to the first defendant). This issue relates to a deficiency with MRC 81. However, the failure was more significant than was stated by the defendants. 181 The first defendant failed to adequately detect and eliminate a cable from use in the restaurants (incorrectly supplied by other entities) which contained at least two substantial defects. Firstly, the cable was inflexible and did not rotate so that there was invariably abrasion between the cable and the floor given the situation of the cable vis-a-vis the grill and its wall mounting (and the abrasive tiling supplied by the second defendant). The position of the cable was such that it made inspection difficult so that deterioration was not easily detectable by casual inspection. 182 Secondly, the external cable and its insulation did not comply with Australian Standard for Wiring AS3000-1991. 183 MRC 81 did require an inspection of electrical cable attached to mobile equipment but the inspections are conducted at a "store level" monthly and by a "qualified electrician" annually. That system did not include the system-wide, co-ordinated inspection and evaluation program which the first defendant had developed with Lennard. 184 This is not a case, as will be later discussed, where the first defendant relied entirely upon independent contractors in developing and implementing maintenance and prevention strategies. The first defendant developed specific maintenance requirements (partly in conjunction with other entities) which were implemented by those entities (and partly in conjunction with the first defendant). Whilst the first defendant should be given credit for the establishment of systems designed to achieve a safe work environment, it must also be assessed for the failures within those systems. 185 The Beef Integrity Blitz and Planned Maintenance Program have been earlier discussed in the review of the defendants' evidence. Each program suffered from some deficiencies in terms of the detriment to safety under consideration. The programs insufficiently directed inspection and preventative maintenance procedures to defective electrical cabling in relation to the clamshell grill for the reasons I have earlier discussed in the review of the evidence.

[166]

The obligation imposed by s.17(1)(b) on the appellant to ensure the plant was safe and without risk to health is to be so viewed and as assisting in the determination of whether it had at the relevant time the requisite degree of control over the subject plant as would make it liable. In other words, the proper operation of the section requires, in our view, the degree of control which a defendant has over plant or substances or non-domestic premises, as the case may be, to be to the extent to which that person is able to ensure safety by guaranteeing, securing or making certain. For that reason, the applicable meaning of "control" in the context of s.17, by reference to its ordinary meaning as earlier outlined, must, it seems to us, have about it the sense of not mere "sway", "checking" or "restraint" but rather controlling in the sense of "directing action" or "command" - the ability of a person to compel corrective action to ensure safety, having in mind the context and purpose of the statute, clearly seems to be necessary in order to enable safety to be ensured ... However, and comfortably with the context of the section, the phrase "to any extent, control" means no more than the person liable being able to compel (or direct or command) to any extent. 189 In my view, and having regard to the reasoning of the Court in McMillan Britton and Kell Pty Limited, these conclusions are equally applicable to the provisions of s17(1)(a) in relation to the exercise of control by the defendants over non-domestic premises which have been made available to persons (not being the employees of the defendants). 190 In McMillan Britton and Kell Pty Limited the defendant had been contracted to Baulderstone Hornibrook Engineering Pty Limited to provide specialist engineering advice in relation to the design and specification of anchorage points and reinforced steel hooks for the lowering of truss falsework panels. The Court concluded that the defendant had control pursuant to its contractual obligations to the point where the defendant had last given advice (where the defendant had a continuing obligation to provide advice on a case by case basis) and that Baulderstone Hornibrook Engineering Pty Limited had modified some of the hooks, the subject of the advice, and thereby assumed responsibility for the safe operation of the lowering device. 191 With respect to Lyndhurst, each defendant exercised various controls in relation to aspects of the restaurant operations at the premises and the design and layout of the restaurant, buildings and equipment by means of the obligations cast upon the franchisee under the licence and lease agreements. The nature of the control exercised varied depending upon the particulars of those legal relationships. However, the control exercised was direct and had a practical application. That control had as its central purpose ensuring that Lyndhurst conformed with a system (which the defendants described as the 'McDonald's system') and complied with the operating conditions therein. 192 It was a general condition and essential term of the licence that the licensee agreed not to breach any covenant, term or condition contained in the licence. The licence required that the licensee shall comply with the entire McDonald's system and "shall adopt and use every such component thereof, in the restaurant" (clause 6.01). 193 The significant elements of the obligations falling upon Lyndhurst under the licence and leave conditions were:

The licensee must comply with the entire McDonald's system.
Lyndhurst must adopt and use the formulae, methods and policies contained in the business manuals produced and distributed by the first defendant (cl. 6.01(a)).
Lyndhurst must comply with all business policies, practices and procedures imposed by the first defendant (cl. 6.01(b)).
Lyndhurst must maintain the restaurant building and equipment in good condition and repair in compliance with designated standards as may be prescribed from time to time by the first defendant (cl. 6.01(b)).
Lyndhurst must use kitchen fixtures, lighting and other equipment in accordance with equipment specifications and layout designs designated by the first defendant and keep the restaurant equipped in accordance with the equipment layout plans that are standard to the McDonald's system (cl. 6.01 (c) and (d)).
Lyndhurst must not make any alteration, conversions or additions to the building design, building or equipment without prior consent of the first defendant (cl. 6.01(e)).
Lyndhurst must not make any change in, alteration of, addition to or removal from the restaurant without in each instance obtaining prior approval of the second defendant. 194 The defendants emphasised that the methods and policies contained in the business manuals of the first defendant including training and cleaning procedures represented minimum standards only. The licensees of McDonald's are, pursuant to the licence and the lease, at their own expense, to comply with all Federal, State and local laws including the Occupational Health and Safety Act. 195 However, this is not a situation such as applied in WorkCover Authority of NSW v Rowson (unreported, Cullen J, CT1156 and 1157 of 1993, 30 June 1994 at 8-9) where the control had shifted from the licensor or lessor to the licensee or lessee due to the dependence of the licensee or lessor upon the basis of contractual obligations or the exercise of competence and skill by the third party, in this case Lyndhurst. 196 The licence and lease conferred upon the defendants the power to direct and compel corrective action to ensure safety within the operation of s17. Each defendant exercised that control in a number of material ways in relation to the premises and operations therein. The areas of control and the exercise of same by the defendants (and the obligations and rights of Lyndhurst in relation to same) were: (i) The second defendant established the layout and design of the building, fixtures and equipment of the restaurant, including the location of power switches and equipment. Lyndhurst could not vary the situation of plant and equipment without prior approval of the first and second defendants. The restaurant, and its environs, was part of a building series having standard features within the McDonald's system. In the result, the clamshell grill could not be fully cleaned by Lyndhurst's employees (noting that cleanliness was also a condition of the licence) unless the equipment was moved from a position next to a wall, which movement necessitated movement of the unit and the attached power cable in a fashion that gave rise to wear on the cable, exhibited in these proceedings, and which created the risk of the performance of work without disconnection from the power supply which has been earlier described. (ii) The manuals and policies of the first defendant stipulated the operational procedures to be adopted in cleaning grills. Lyndhurst also had an obligation under the licence to take steps in conformity with relevant laws. The defendants' control was not merely to set a 'minimum standard', in the sense of a simple and basic foundation upon which more complex or detailed regulation would be built by Lyndhurst; the maintenance cards and other operational requirements stipulated by the defendants contained an obligation which was both detailed and prescriptive. MRC 11A purported to lay down the procedures for cleaning behind grills. Lyndhurst had, under the licence, an additional responsibility to provide for the safety of employees, although not in a manner inconsistent with the requirements imposed by the defendants and within the dictates of the structure and design of the defendants' restaurant. Thus, Lyndhurst's obligations under the licence went to taking additional steps to those imposed by the first defendant. Hence, it could have put in place additional procedures to ensure that the first step taken in cleaning grills, having regard to the layout of the premises was to disconnect the power supply. However, this step would have been to remedy, by amendment, the deficiency in the procedure prescribed by the first defendant and not simply filling in a void in the procedures. (iii) The manuals and policies of the first defendant stipulated requirements for electrical maintenance. The respective obligations for the first defendant and Lyndhurst are those I have described in (ii) above, although in the case of special preventative maintenance programs such as the Beef Integrity Blitz, the franchisees were merely the recipients of arrangements otherwise put in place by the first defendant and Lennard. 197 Subject to Lyndhurst's obligations under the licence with respect to its employees, the control exercised by the defendants was both direct and significant in determining the system of work (in relation to the cleaning and maintenance of grills) in the restaurant operated by Lyndhurst. Even though the employees were those of Lyndhurst and Lyndhurst retained at all relevant times obligations for the training of each person and the provision of a safe system of work, the system of work was substantially governed by the controls exercised by the first defendant. 198 The submissions of the defendants in relation to the contribution of Lennard and Mercer concentrated substantially upon the contribution of those parties to the safety of the clamshell grill. The only major exception was the contention that Mercer, through its involvement with placing kitchen equipment in restaurants of the defendants and their franchisees, was in a position to have identified the difficulties associated with the positioning of the equipment and particularly the placement of the grills and the isolation switches. Apart from the exception I have mentioned, however, the submissions as to contribution relate solely to the charge laid against the first defendant. 199 The documentation tendered by the defendants established that a system was in place which was designed to address various issues relating to the kitchen equipment in its restaurants, including, to some extent, the safe installation and use of that equipment. The system in place involved the prescription of procedures for the installation of equipment, the provision of training for staff following installation, the availability of service personnel to perform specific repair and maintenance work for franchisees, as well as the implementation of safety and maintenance programs throughout the McDonald's system. It must be stressed, however, that that documentation was presented by the defendants in mitigation and there has been no testing of it or any countervailing material raised by Mercer or Lennard who have not appeared in these proceedings. 200 It is clear that these services were provided in a co-operative manner by the defendants in conjunction with various third parties, notably Lennard and Mercer. Depending upon the nature of the maintenance undertaken, the first defendant carried out a role in the design and specification of maintenance programs, supervised and, as required, modified their implementation. I will firstly discuss the role performed by Lennard and then the activities undertaken by Mercer. 201 Lennard performed a number of functions in the McDonald's system which may be relevant to this case. Lennard was involved in the installation of various equipment in the defendants' restaurants and provided training following installation. It was agreed that Lennard installed the particular grill in the Wollongong restaurant and provided training to staff at the restaurant during 1992. 202 Lennard provided various services to the defendants and their franchisees, including maintenance, testing and training services in relation to equipment in use in the restaurants, including the clamshell grills. The bulk of this work involved the completion of specific maintenance tasks as requested by the defendants or their franchisees. While Lennard clearly completed a great deal of work for the defendants and their franchisees, there is evidence that the franchisees were free to engage either Lennard or other service companies if they so desired. The business relationship between Lennard and the first defendant did not require franchisees to contact Lennard when a problem arose with any particular machinery or for other maintenance requirements. 203 Furthermore, the evidence established that the defendants did not adopt an entirely passive approach to the needs of their franchisees for occasional maintenance services. When a problem arose in relation to equipment or machinery, a franchisee could either contact Lennard directly to request a maintenance call or contact the first defendant, who would in turn arrange with Lennard for the repair work to be undertaken. The first defendant also regularly compiled lists of repair work assigned to Lennard and undertook to ensure that the work was, in fact, completed by Lennard. 204 Lennard also participated in various maintenance programs conducted in the restaurants. The defendants placed particular reliance upon the participation of Lennard in the Beef Integrity Blitz conducted in 1993 and the Clamshell Grill Planned Maintenance Program (also referred to as the clamshell blitz recovery program) which was implemented throughout 1995 and 1996. Particular emphasis was placed upon the Clamshell Grill Planned Maintenance Program. The purpose of the program was to facilitate six monthly maintenance reviews to be conducted on all McDonald's clamshell grills to ensure that the grills operated at maximum efficiency and to extend their competent life. The program involved an inspection of key components of the grills and the functional and mechanical evaluation of all critical areas of efficient operation. For the purpose of conducting the program, a checklist was developed in order to record the condition of various components and functions of the grill, albeit that the checklist as earlier mentioned did not include specific reference to the cable. The grill involved in this case was checked as part of the maintenance program in September 1995. 205 The program was designed and implemented by Lennard. However, in my view, the documents tendered by the defendants indicated that they also performed a significant role in relation to the program. The defendants instigated the project which resulted in representatives of Lennard formulating and enacting the planned maintenance program. Key documents relating to the design and implementation of the program, including the material sent to franchisees and the checklist, were devised by Lennard. However, those documents were commonly submitted to the defendants for comment and approval. A number of amendments were subsequently suggested by the defendants, including the indication that particular aspects of the grills should be checked for wear as part of the maintenance program. The defendants also closely monitored the progress of the maintenance program and reprimanded Lennard when it appeared to the defendants that the progress was not adequate. 206 Furthermore, the Beef Integrity Blitz was initiated by the first defendant in conjunction with Lennard. The program was implemented by the first defendant which jointly prepared a checklist for inspections with Lennard. Lennard then carried out the inspections. 207 The material submitted in relation to Mercer established that Mercer occupied a significant position in the McDonald's system. It was agreed that the grill involved in this case was imported and supplied by Mercer to Lyndhurst. The power cable was attached to the grill prior to installation by independent contractors contracted by Mercer. Mercer were also involved more generally in the McDonald's system. Notably, Mercer was involved in importing, supplying and installing equipment in new restaurants, participating in replacing certain equipment in existing restaurants through programs such as the Clamshell Grill Replacement Program and the Standard Kitchen Replacement Program, as well as some after sales service and advice. 208 As in the case of Lennard, in my view the evidence supports the conclusion that the defendants retained a substantial function in supervising the services provided by Mercer in the McDonald's system. For example, the defendants provided Mercer with updated lists of outstanding projects to be conducted by Mercer and requested that Mercer provide an update concerning the progress of each matter. Meetings appear to have been held to discuss the status of particular projects and action lists were provided by Mercer to the defendants. 209 The material submitted in relation to Lennard and Mercer entitles the defendants to some reduction in the penalty which may otherwise have been imposed, but not necessarily for the reasons advanced on their behalf. It is the very involvement in the maintenance of equipment in their restaurants which the defendants expressly sought to deny (at least by reference to the primary submission advanced by the defendants as to the 'control' exercised by Lennard and Mercer) in relation to the installation and maintenance of equipment, which entitles them to a reduction in penalty. In my view, the defendants (although primarily for reasons earlier discussed, the first defendant) are entitled to a moderate reduction in penalty in consideration of the fact that various preventative maintenance programs were implemented in relation to equipment in use in their restaurants. It is also notable that a centralised system was in place to facilitate the repair of any defects which occurred in the machinery. Initiatives were also undertaken to ensure the replacement of aging equipment and to ensure that installation of new equipment was completed correctly and training provided to staff. 210 It is also proper to consider to some extent the reliance of the defendants upon the expertise of other entities in the actual execution of services relating to the supply, installation and maintenance of equipment in use in the restaurants. The defendants conduct extensive operations throughout Australia and properly choose to have certain services provided by contractors, such as Lennard and Mercer. I particularly take into account the fact that the grill involved in this case was inspected as part of the Clamshell Grill Planned Maintenance Program approximately six months prior to the accident occurring. Although, I also note that the checklist had limitations as earlier discussed. 211 However, I do not consider that the degree of mitigation sought by the defendants can be justified by the submissions relating to the reliance placed by the defendants on Lennard and Mercer, nor by the information tendered in relation to the wider involvement of those entities in the McDonald's system. Whilst the defendants did contract with various entities to provide services to its franchisees, they nonetheless retained a significant role through the instigation, monitoring and evaluation of programs relating to the installation and maintenance of equipment. They were not, as the defendants themselves sought to describe it, entirely dependent upon Lennard and Mercer in relation to the safe installation and maintenance of the equipment in use in their restaurants. 212 In light of these findings, this case does not demand more extensive comments in relation to the delegation of duties to third parties. However, I would express my doubt that an argument such as that raised by the defendants would normally result in the very substantial reduction in penalty sought by the defendants. I do not consider that a person who has control of non-domestic premises made available as a place of work or control of plant provided for use or operation at work and who fails to ensure that the premises or plant are safe could escape the bulk of their culpability under s17 of the Act by seeking to delegate responsibility for maintenance to third parties. In many instances it would be quite proper to contract third parties to conduct maintenance, for example. However, some responsibility will normally remain to consider what services should be provided and, so far as possible, to ensure that the services were performed adequately. At the very least, the defendants in this case were involved to that extent, although for the reasons I have given, there was not sufficient fulfilment of their obligations under the section. 213 Mr Harmer submitted that the defendants did not have control over the primary causal factors which he submitted consisted of failures associated with the selection, installation and lack of maintenance of the clamshell grill cable. The defendants rely upon the decision of Hill J in WorkCover Authority of NSW v Atco Controls Pty Limited (1998) 82 IR 80 at 84-85. In that matter his Honour concluded that two factors had mitigated the objective seriousness of the offence. Firstly, the employer had not stood by and ignored the danger but attempted to rectify it. Secondly, the primary causal factors were ones over which "the defendant really had no control" (at 85). This conclusion was reached as the primary cause of the accident was that a forklift driver did not look behind him during the critical part of the period for which he was driving the forklift in reverse. Furthermore, an employee had parked in an area where he was directed not to park (although no signs had been erected indicating that no parking should occur). 214 In my view, the circumstances in Atco are not similar to circumstances applying in this matter. Firstly, the risks to safety were, as the defendants themselves submitted, avoidable. Secondly, the deterioration in the cable was difficult to detect but, as the defendants put it, capable of rectification by appropriate maintenance procedures (whether generally by preventative maintenance or special programs). Thirdly, the defendants did, for reasons earlier discussed, exercise control (to the extent earlier described) over both maintenance and detection procedures and procedures which regulated the cleaning operations of the restaurant (whereby an employee may come into contact with the electrical cable). Finally, in Atco Hill J distinguished (at 84) the failures of the defendant in that matter from an earlier accident where the same defendants had more significantly failed to meet their statutory obligations. In the earlier case, his Honour had found that if a safety switch or a fail safe device, had been installed (which was available) the accident would not have happened. The example of a fail safe device or safety switch in that case is analogous, in my view, to the failure to use a Remedial Safety Device by the second defendant in this matter. I shall nextly turn to the safety systems employed by the defendants. 215 The defendants submitted in mitigation that there was in existence a system of work which would have prevented the accident had it been adhered to by the employee. It was submitted that the defendants provided a detailed system of instructions and maintenance which, if complied with by Lyndhurst and Lennard, would have prevented the accident. Reliance was placed upon the following passage from Warman v WorkCover Authority of NSW (1998) 80 IR 326 at 342: The obligations imposed upon employers by the OH&S Act of course extends to guarding employees against harming themselves through human error or failing to follow otherwise safe work procedures. The fact that this system of work and the guarding of this machine proved to be inadequate was accepted by the appellant in its plea. Nevertheless, in the nature and quality of the offence for which a plea is to be fixed, regard must be had to the existence of a system of work which would have prevented the accident had it been adhered to by the employee. 216 In Atco, Hill J made the following observations as to the obligations falling upon employers under s16 of the Act (which are applicable, in my view, to prosecutions brought under s17 of the Act): This case is yet another illustration of the need for employers to exercise abundant caution, maintain constant vigilance and take all practical precautions to ensure safety in the workplace. It is essential that the approach should be a pro-active and not a reactive one; employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time in the workplace. (at 85) 217 In essence, the defendants' submission is to the effect that Lyndhurst failed to detect the worn cable as part of its day to day maintenance responsibility (although the defendants concede that Lyndhurst might have arguably relied upon Lennard's maintenance program) and departed from the requirements of MRC 11A regarding isolation of the equipment prior to cleaning (although there was a deficiency in Lennard's training where no instructions were received by staff to isolate the power supply to the clamshell grill prior to cleaning). As to Lennard, it is submitted that there was a failure to identify the inadequacy of the cable at the outset, a failure to train Lyndhurst staff and a failure to detect deterioration of the cable despite the role of maintenance. 218 Whilst the various measures taken by the defendants are factors to be taken into account in mitigation they do not amount to factors akin to that discussed in Warman. In that case an employee disregarded a previous safe practice whereby entry to a fast loop moulding machine was through a gate in a fence at which a cut off switch had been situated thereby normally stopping the machine before entry. The employee disregarded the practice and the accident occurred because he removed a piece of fence guarding from the machine thereby causing the cut off device not to be engaged. 219 Whilst I accept that the existence of settled safety procedures and instructions is a factor which is relevant to the assessment of the seriousness of the offence (see Department of Mineral Resources of NSW (Chief Inspector Bruce Robert McKensey) v Kembla Coal and Coke Pty Ltd (unreported, Walton J, Vice-President, IRC142 of 1998, 16 August 1999) at 33), that system must also include searching for and identifying all possible risks and instituting safety measures to guard against those risks: University of Sydney at 21. 220 In Inspector Hannah v Rice Growers Co-Operative Limited (unreported, Fisher CJ, CT88 of 1990, 20 November 1990), his Honour commented, in relation to an offence under s15 of the Act, that (at 7-8): It was true that it may be difficult to anticipate the way in which even an obvious and avoidable risk may work itself out. Most serious accidents are not anticipated. This does not excuse any employer from a failure to employ a safe system of work incorporating obvious and desirable safety measures. 221 In Atco, Hill J made the following observations as to the obligations falling upon employers under s16 of the Act (which are broadly applicable, in my view, to prosecutions brought under s17 of the Act): This case is yet another illustration of the need for employers to exercise abundant caution, maintain constant vigilance and take all practical precautions to ensure safety in the workplace. It is essential that the approach should be a pro-active and not a reactive one; employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time in the workplace. (at 85) 222 Although, as I have said, the defendants are entitled to a moderate reduction in penalty in consideration of the system of safety and maintenance which was in place, that system was not, in my view, sufficiently comprehensive, vigilant and proactive. In addition to a failure to establish simple steps that would have prevented the accident (which I shall discuss below), the system that was established by the first defendant had evident failings. There were deficiencies in MRC 11A and MRC 81, which I have previously discussed. The training of employees was dependant upon the passing down of information by Lennard to other employees along a chain without any independent supervision by the first defendant. 223 In relation to the maintenance program, at least part of the maintenance procedures adopted by the first defendant do not sufficiently direct themselves to the specific safety issue in question. There was no specific system of auditing or checking to determine the outcome of the maintenance program, notwithstanding, for example, the beef integrity blitz was conducted jointly as between the defendants and Lennard. Further, the nature of the inspections conducted which were directed to electrical cable did not sufficiently deal with the potential damage or deterioration of the cable where the risk to injury, as submitted by the defendants, was latent and not manifest. Inspector Fox in evidence indicated that a proper maintenance inspection would have revealed the wear and tear on the cable as opposed to ad hoc inspections by, for example, management. However, there was not a sufficient program of inspection and maintenance to detect failings in cable where the system employed by the second defendant through its design and layout of the premises invariably had the cable moving against an abrasive surface. The cable was inadequate for its purpose and contrary to Australian standards. It was installed in 1992. After that time the defendants had obligations to ensure that the design of the premises, the equipment installed for use therein as part of the McDonald's system and the system employed to maintain that equipment operated in a manner which in all the circumstances was safe having regard to the requirements of the Act. I note that the defendants relied upon WorkCover Authority of NSW v Broken Hill Proprietary Company Limited (1998) 83 IR 427, where it is said that a factor in mitigation was the existence of settled safety procedures and instructions. However, in that case Peterson J concluded that whilst there were safety procedures in place, the defendant had failed to provide a system (in that case an accreditation system) to make fully safe the operation (at 429). 224 Having regard to the evidence in this matter I consider that the risk to safety occasioned by the worn cable attached to the grill was reasonably foreseeable and avoidable by simple remedial measures. Both of these considerations are relevant to an assessment of the seriousness of the offence (see Lawrenson at 26). 225 In Kembla Coal and Coke Pty Ltd I stated (at 37-38): Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng , Matter No. IRC 3064 of 1997, 12 August 1999 at 39), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence: see Camilleri's Stock Feeds (at 700); James Moore v Vibro-Pile (Aust.) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at p17) and The University of Sydney (at 16).

[167]

The proper test of foreseeability in these circumstances it not whether a lawyer or engineer could conceivably have foreseen the risk which existed but whether or not the ordinary jury person or reasonable observer could have done so: see The University of Sydney (at p11). 226 Further, in the same judgment I stated: The existence of simple and straightforward remedial steps which could have been taken by the defendant to avoid the accident are relevant, in my view, to assessing the seriousness of the offence in this case: see WorkCover Authority of New South Wales v ACI Operations Pty Limited (unreported, Schmidt J, CT93/1025, 25 February 1994). Whilst the response by the defendants after the accidents was laudable, the actions taken were such as to reveal in clear terms the decisive steps which may have been taken by the defendants to actually prevent this accident and thereby demonstrate a flaw which existed in the previous system: WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (at 21-22). (at 36) 227 I have come to the conclusion in this case that the risk to safety was reasonably foreseeable and avoidable by simple measures for the following reasons:

It was reasonably foreseeable that in the absence of a step being taken to isolate the power before the cleaning operation the employee would be exposed to risk either through the movement of the grill and exposure to cabling accordingly or by employees not adhering to procedures designed to cut off power at the isolation switch.
The defendants also issued MRC 81 which governed electrical maintenance. This direction operated concurrently with MRC 11A at the time of the accident. It had a clear warning "electrical shock hazard" and related to all equipment and power outlets. The monthly check clearly referred to all mobile equipment and directed attention to checking "leads for cuts or tears in insulation". Thus, the defendants recognised by their procedures the risk associated with electrical cables attached to mobile equipment. A similar recognition of the risk was demonstrated in the checks required in the Beef Integrity Blitz.
A similar recognition of danger was shown in MRC 11A, at least to the extent of requiring employees not to pull by the power cord when disconnecting and requiring the power supply to be disconnected. However, MRC 11A failed to take into account the risks associated with being unable to isolate the power supply until after the clamshell grill was moved. Further, as MRC 11A demonstrated, on its face, the first defendant did not make clear to managers and supervisors of the franchisees or their employees that they were to ensure that a disconnection of power to the grill occurred prior to its movement for the purposes of cleaning.
Simple remedial measures were available to the defendants and were demonstrated by the steps taken after the accident. After the accident the first defendant, in addition to making accessible the isolators for all grills and attaching residual current devices, amended the instructions and procedures in MRC 11A through a document titled "Clean Behind Grills, Station Observation Checklist". This document made clear that, before an employee started cleaning, a procedure was to be adopted whereby the circuit breaker on the switchboard was located and switched to the off position. The employee would then turn off all power switches. This occurred within one week of the accident. Similar precautions were taken in a memorandum sent to all stores in the early morning of 9 March 1996 by the General Manager of the first defendant.

[168]

There were subsequently issued a series of labels which affixed a clear warning that the equipment had to be switched off "at power point or disconnect power plug or switch off circuit breaker before moving". MRC 81 was also changed essentially to ensure that a disconnection of power occurred before any equipment was moved for the purpose of cleaning. These changes were implemented directly by the first defendant and occurred in both restaurants directly operated by the defendants and in franchise stores. 5. The defendants introduced changes to the infrastructure of the restaurants after the accident by moving isolation switches and introducing residual current devices. Given that the defendants knew of the potential risks associated with the cleaning of the equipment and cables attached thereto, the failures resulting from the restaurant design must have been reasonably foreseeable. 228 Given the nature of these factors, it appears that the risk to safety was not only reasonably foreseeable but was, in fact, foreseen; thereby adding to the overall seriousness of the offence: see Axer at 8. 229 Furthermore, in the absence of an alteration to the restaurant design and equipment location, the introduction of residual current devices would have avoided the need (on an alternative basis) to switching off the circuit breaker each time the equipment was to be moved for cleaning purposes. There is no evidence in the proceedings as to the extent of the use of this form of device in the restaurant industry. Mr Fox, when cross examined on the issue, was not aware of the extent of use of such devices. The proof of a lack of use of the devices in the industry fell to the defendants in mitigation. 230 I also consider that the elements of both general and specific deterrence must play a role in the determination of sentence in this case. The defendants conduct a very large enterprise operating throughout New South Wales and a variety of potentially dangerous equipment is used in their restaurants. The defendants identified that their enterprise involved the employment of a large number of young persons, such as the deceased, with little or no previous work experience. In my view, the existence of a risk to safety in a business which engages a large number of young, inexperienced and vulnerable workers, particularly where the business utilises dangerous equipment, must enhance the seriousness of the offence. Such a circumstance compels the imposition of a sentence which will attract the attention of other persons or corporations operating enterprises with similar features to the necessity of vigilantly ensuring the safety of young and inexperienced workers. I note, however, that I also later take into account the engagement of a large volume of young workers in the defendants' restaurants, whilst the second defendant maintained a good prior record and the first defendant a single prior conviction, in the assessment of the evaluation of the subjective features of this matter. 231 Having regard to the nature and foreseeability of the accident and the simple remedial steps that could have been taken to prevent the accident as well as the nature of the workplace and the risks involved, and further, having taken into account the factors in mitigation raised by the defendants (including the establishment of various systems including general safety systems and particular systems directed to the cleaning of grills and electrical maintenance, together with the reliance placed upon various external agencies to deliver this system), I consider that the breach is serious. 232 I now turn to the subjective features of the matter. 233 There is no doubt that the measures taken by the defendants after the breach were commendable and involved a substantial expenditure both on their part and on the part of franchisees. I note that these changes have been earlier referred to in this judgment and are listed in paragraph 35 of the statement of agreed facts as well as with the information attached to Ms Berney's statement. These factors will be taken into account as factors in mitigation: Tyler v Sydney Electricity (1993) 47 IR at 5 and Alcatel at 103. 234 I have, however, also had regard to the statement by Maidment J in Inspector Callaghan v Saunders Constructions Pty Limited (unreported, Matter No. CT1062 of 1993, 26 November 1993 at 7) as follows: Commendable though it is to introduce appropriate occupational health and safety measures after the event it needs to be remembered that the legislation is not directed at ex post facto measures, it requires positive preventative steps being taken to ensure that workers are afforded safe working environments irrespective of their own laxities. 235 A further relevant consideration is the plea of guilty made by the defendants. Whilst the plea of guilty was not entered immediately, the defendants explained the delay in the entering of the plea as being due to the multiple charges which had been brought against them and the numerous particulars associated with those charges (many of which overlapped). It was submitted that some of the charges brought were inappropriate and the process of determining what the company should properly plead to was complicated. 236 An early plea of guilty will give rise to a reduction in the sentence imposed: Alcatel v WorkCover Authority of NSW at 107 and Nesmat Pty Limited v WorkCover Authority of NSW at 20. I have earlier set out the relevant principles in this regard from Lawrenson. In the present case I consider that the defendants' plea was made at a reasonably early time, although clearly not at the earliest available time. However, given the complications associated with this matter, as referred to by the defendants, I shall treat the defendants as having entered a plea at the earliest available time and provide a discount in sentence accordingly. 237 A related consideration is the co-operation offered by the defendants to the WorkCover Authority of NSW. This is a factor which can be taken into account for corporations: Alcatel v WorkCover Authority of NSW at 107. The discount for co-operation depends on the nature of the co-operation given, whether it had the potential to significantly assist the investigation, whether any information was provided which the defendant did not believe was already in the possession of the authorities and whether the consequences of providing such assistance was likely to increase the potential of prosecution or lead to the prosecution of others: Alcatel at 107. 238 The defendants relied upon the provision of relevant information to the WorkCover Authority of NSW such as providing a detailed statement on 3 April 1996 and subsequent statements on two further occasions. The defendants also provided a substantial quantity of documents and agreed to a statement of facts. The statement of Mr Jermyn of 3 April contained a mixture of information which could have assisted the authorities and other information which was designed to protect or mitigate the position of the defendants in relation to information given by the defendants to WorkCover. Mr Fox agreed that extensive documentation had been provided and that appropriate co-operation had been given. 239 In these circumstances, and on balance, I consider that a discount should be allowed for co-operation. I have also had regard to the decision in R v Gallagher (1991) 23 NSWLR 220 at 232, where it was held that care must be taken to ensure that the ultimate sentencing result that is produced, when applying a discount to take into account assistance, is not one that is out of touch with the circumstances of a particular offence. I also refer to the decision of the Court of Criminal Appeal in Huang (1994) 78 A Crim R 111 at 114. In that matter, the offender's co-operation with the authorities had been "exceptional in its completeness and extent". However, the court, in applying the decision in Gallagher (1991) 23 NSW LR 220, and allowing the appeal against sentence, held that the discount for such factors must nonetheless produce a result in the end which does not, having regard to the nature and quality of the offence, represent an affront to community standards. 240 The defendants also argued that the Court should have regard to the contrition and remorse of the defendants. This is really in the context of the consideration of prior record. It does appear that this Court has taken into account contrition by a corporation: WorkCover Authority of NSW v Broken Hill Proprietary Company Limited at 429-430 (also see Haynes v CI & D Manufacturing Pty Ltd and another (No. 2) (1995) 60 IR 455 at 457 "CI & D"). In particular, regard may be had to the assistance provided to the family of the deceased which is clearly evident in this case (see Neill v The Queen (1982) 149 CLR 305 at 315). 241 I turn then to the prior record of the defendants. In this case the first defendant has a prior conviction which may be taken into account in sentencing: Veen v R (No 2) (1988) 164 CLR 465 at 477 and Camilleri's Stock Feeds at 700. The second defendant has no prior record. However, for both defendants consideration should be given to the nature and extent of the enterprise being conducted, that is, a very large enterprise operating throughout New South Wales on an 18-24 hour operation, 7 days per week, using a variety of dangerous equipment. This process has been taking place over 25 years and has occurred in circumstances where a large number of young persons have been employed. Thus a prior conviction can be seen in this context and the previous good industrial citizenship of the second defendant recognised, including the engagement in McDonald's restaurants of a large number of young persons. Clearly this is a factor to be taken into account in mitigation together with other aspects of McDonald's character as a corporate citizen. However, there also needs to be borne in mind the caution stated in Haynes v James Glass & Aluminium Pty Limited (unreported, Fisher CJ, Matter Nos. 772-775 of 1991, 20 May 1994 at 6) which was followed in WorkCover Authority of NSW v Waugh at 96 as follows: While previous good industrial citizenship and the absence of prior convictions are profit considerations, their importance lies well behind the two primary aspects of the matter, namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce.

[169]

Principle of Totality 242 The defendant submitted that having regard to the principle of totality the defendants should be treated "as one in relation to assessment of a single offence and a penalty assessed for that offence and only thereafter, once the possibility of double counting has been avoided, should there be apportionment placed on the respective contributions of the two". In support of this submission the defendants relied upon Warman International Limited v WorkCover Authority of NSW (1989) 80 IR 326 at 339 (applying WorkCover Authority of NSW v Waugh (1995) 59 IR 89 at 100); Corbett v Raymond Borg (unreported, Hungerford J, CT1281-1282 of 1995, 17 May 1996 at 12); and Moore v E W Cox Pty Limited (1996) 37 IR 143 at 149. 243 This submission was supported upon the basis that whilst there was a distinction between the contribution of the two defendants in relation to the matter, there were a range of factors indicating the appropriateness of that approach; namely, the second defendant is a wholly owned subsidiary of the first defendant and there was a common substratum of facts and significant areas of overlap in responsibility having regard to the defendants being effectively co-parties to lease and licence agreements governing the design of the building, equipment and other operational consideration. 244 It was submitted that there are assertions against both defendants going to the design and layout of the restaurant and, in assessing penalty, the two entities should be taken as one in relation to a franchise package. As to the differences in maximum penalty for the offences charged against the two defendants, Mr Harmer acknowledged that this might interfere with the ability to treat defendants as one but that an approach could be taken which permitted the varying maximum penalties to be taken into account in apportionment of penalty between the two defendants after an overall penalty assessment had been made for them as a single entity. He submitted an assessment can be made of "a single culpability in terms of contributions to the risk which were present on this particular occasion". The Court should avoid double counting. The prosecution opposed the submissions of the defendants in relation to the principle of totality. 245 In Warman (at 339) the court held that the principle of totality must be applied in sentencing and adopted the statement of the principle enunciated in Waugh (at 100) as follows: The principle of totality allows a court when sentencing to avoid a straight forward arithmetical addition of sentences appropriate to each individual offence where the offences are similar, thus avoiding doubling of penalty by enabling the judge to consider a single overall penalty which includes the circumstances of a second or further offence. 246 The principle of totality was so stated in Camilleri's Stock Feeds (at 703-704) in which the Court of Criminal Appeal adopted the statement of the principle in R v Holder [1983] 3 NSWLR 245 at 260 as follows: The principle of totality is stated by Street CJ in R v Holder [1983] 3 NSWLR 245 at 260:

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"... The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences. The effect of this practical consideration is always to produce an ultimate aggregate which is less than that which would be arrived at by a straight-forward adding up of the terms appropriate for the offences if each were viewed alone. In carrying out this process of adjustment, it is both inevitable as well as proper that the ultimate decision be arrived at in the light of the totality of the criminality involved in all of the offences. As has been said more than once in this Court, where the principle of totality comes into effect, it is more often than not of little importance how the ultimate aggregate is made up (that is to say, whether by a series of aggregate terms or by a series of concurrent terms, or by partly one and partly the other). The important factor is the practical significance of the sentencing order." 247 In Postiglione v The Queen (1997) 189 CLR 295 at 307-308, McHugh J stated the principle as follows: The totality principle of sentencing requires a judge who is sentencing an offender for a number of offences to ensure that the aggregation of the sentences appropriate for each offence is a just and appropriate measure of the total criminality involved. In Kelly v The Queen O'Loughlin J, sitting in the Full Court of the Federal Court of Australia, applied the following unreported remarks of King CJ in R v Rossi :

[173]

When an offender stands for sentence in relation to several offences, it will invariably be necessary to pay regard to the principle of totality. 249 The principle formulated in these cases does not, on its face, assist the defendants' contention. The principle of totality enunciated in these decisions operates in circumstances where a single defendant was convicted of a number of offences. The principle requires a judge who is sentencing an offender for a number of offences to ensure that the aggregation of the sentences imposed for each offence is a just and appropriate measure of the total criminality involved. However, the present matter does not concern a single offender facing multiple charges, but two defendants facing different charges. There is a common substratum of facts, but the defendants, as was conceded by Mr Harmer, have different "contributions". 250 The defendants also referred to Moore v E W Cox Pty Limited. However, that matter concerned a single defendant facing charges under ss15 and 16 of the Act. Fisher J adopted the view that essentially the same successive failures were involved in an offence under s15 and an offence under s16 and, therefore, it would be appropriate to impose a single penalty (at 149). Whilst his Honour does use the expression the "same successive failures", this decision is distinguishable from the present matter in that the decision concerned a single defendant. To that extent, the telescoping of the penalty in Moore appears to be consistent with the principle of totality earlier stated. 251 The defendants' submission is not, in my view, assisted by the decision in Corbett v Borg at 12. In that matter the court applied the principle of totality where a single defendant was facing two charges arising under s50 of the Act. 252 Similarly, two recent applications of the principle by this Court concerned a defendant facing multiple charges arising from the same incident: see WorkCover Authority of NSW (Inspector Milligan) v State Rail Authority of NSW (unreported, Kavanagh J, Matter Nos. IRC7032-7036 of 1997, 13 October 1999) and WorkCover Authority of NSW (Inspector Keenan) v The Crown in the Right of the State of New South Wales (unreported, Schmidt J, Matter Nos. IRC598 and 601 of 1998, 6 December 1999). 253 Moore was considered by the Industrial Commission of NSW in McLaughlin v ICI Australia Operations Pty Limited & another (unreported, Fisher P, Matter Nos. 1512, 1518 and 1520 of 1988, 20 December 1990). In that case charges were brought against two companies - ICI Australia Operations Pty Ltd ("ICI") and Sarkem Ltd ("Sarkem"). ICI acquired ownership from Sarkem and took over management of Sarkem's chemical plant. ICI employed management and it appears Sarkem employed operational staff. 254 ICI was charged under s15 of the Act and Sarkem was charged under s16 of the Act. Sarkem sought that the Commission apply 'the practice' in Moore which was said to involve successive failures under ss15 and 16 resulting in a single penalty. However, his Honour refused to apply the approach in Moore on the basis that "the gravamen of the offences are not the same" and that "the summonses against Sarkem address separate and distinct failure(s) and should be dealt with separately". 255 Moore was again considered in WorkCover Authority v Sarkem Limited and ICI Australia Operations Pty Limited (unreported, Fisher P, Matter Nos. IRC605 and 606 of 1997, 27 February 1998). In that case the prosecutor and the defendant agreed that the charges under ss15 and 16 of the Act involved essentially the same successive failure and that there was a "commonality of responsibility". His Honour also had regard to the fact that the defendant companies were very closely associated and that there was no distinction between the two entities in the hearing (at 12). His Honour accepted the contention of the defendant that it was appropriate to determine the penalty for offences "as if it were the one incident committed by one person" and then to share the penalty equally between the two defendants. 256 In WorkCover Authority v Nicholson's Air Service Pty Limited (unreported, Fisher J, Matter Nos. CT1008 and 1009 of 1995, 8 April 1998) the decision in Moore was not specifically considered. However, Fisher CJ considered charges brought against Nicholson's Air Services Pty Ltd under s16 of the Act and Agair Development Pty Ltd under s15 of the Act. His Honour found that the companies were in common ownership, the directors and management in both cases being the same. His Honour accepted the agreed position of the prosecutor and defendant that one penalty should be fixed in relation to the charges as being consistent with "a number of cases" and representing a "common sense approach". 257 In my view, the decision in Moore is not authority for the contention advanced by the defendants as to the application of the principle of totality in this matter. The decision concerned a single defendant facing a number of charges arising out of common substratum of facts. Further, and assuming for present purposes that it were appropriate to treat the successive failures (under one or more sections of the Act) of two related companies (in relation to a common substratum of facts) as resulting in the assessment of a single offence (with a later apportionment of penalty), the decision in McLoughlin v ICI is more to the point. Here, as in that case, the gravamen of the offences is not the same and the summons (and particulars thereof) address separate and distinct failures. 258 The decisions in WorkCover v Sarkem and ICI Australia Operations Pty Ltd and WorkCover Authority v Nicholson's Air Services Pty Ltd seem to arise from the particular set of facts arising in those cases and the consent of the prosecutor and the defendants to the approach ultimately adopted by the Court. The decisions do not particularly add to the reasoning in Moore and McLaughlin v ICI. Further, the decision in WorkCover Authority of NSW v Sarkem appears to have proceeded (no doubt as a result of the consent of the parties) without reference to the fundamental distinction between that case and Moore, namely that Moore concerned only a single defendant facing multiple charges. 259 However, it is appropriate to consider the decision of the Full Court of the Industrial Court of New South Wales in CI & D. The Court was not taken to this decision by the defendants or the prosecutor. This may be because the decision of the Full Court was quashed by the Court of Appeal in C&ID Manufacturing Pty Ltd v Registrar, Industrial Court of NSW (1996) 67 IR 440. However, it is appropriate, in my view, to consider the reasoning of the Full Court in that matter to the extent that it bears upon the issue of totality. 260 The court in CI & D considered the appropriate approach to penalty where two related companies, namely CI & D Manufacturing Pty Ltd (Manufacturing) and CI & D Industries Pty Ltd (Industries), were charged respectively under ss15 and 16 of the Act in relation to an accident resulting in the death of an employee. The court found: Should the prosecution of the closely related companies attract one penalty or two penalties assessed as against each company? The evidence available showed that Manufacturing at the time of the accident employed at the Somersby plant about nine workers and that for purposes related to company structure was a company wholly-owned by Industries. The personnel on whom the ultimate responsibility for ensuring the supervision of the employees rested at the time of the accident were the same.

[175]

We have considered whether it was within the authority of the Court to order the payment of the fine as if the respondents were jointly and severally liable for the total amount. Were such a course available any risk that the impecuniosity of one respondent would cause undue hardship would be avoided with management being able to determine the most convenient method of funding the fine. We have been unable to come to the view that such a course is open to the Court. In determining the way in which the totality of the fine should be apportioned, we have decided that Manufacturing and Industries are so clearly linked that each should bear the fine equally - $15,000 by Manufacturing and $15,000 by Industries. 261 The decision of the court was based, in my view, upon the nature of the relationship between the two companies. Some aspects of that relationship are described in the abovementioned extract from the judgment of the court on penalty. However, the particular aspects of the relationship are elucidated by reference to the earlier judgment of the Full Court (which considered an appeal from judgment of Schmidt J, finding the offences against the companies were not proven: see Haynes v CI & D Manufacturing Pty Ltd (1995) 60 IR 149). 262 A work incident occurred on the premises owned by Industries and leased to the associated and wholly owned company Manufacturing. The accident resulted in an employee of Manufacturing being killed. Industries was responsible for the direction and supervision of the employees of Manufacturing and itself employed the managerial staff to carry out those functions, including the overall management of the business of Manufacturing. The factual substratum for the decision was, therefore, relatively unique in that directly related companies were both responsible in various capacities for the management and control of the subject employees. 263 Nevertheless, the approach adopted by the court in CI & D does not sit comfortably with the principle of totality as stated in Holder, Camilleri's Stock Feeds and Postiglione and as applied in Pearce. Whilst the charges against the corporations in CI & D (and the assessment of penalty) were heard concurrently (and the defendants should have been assessed having regard to the principle of parity, which I have earlier discussed) the matter essentially concerned prosecutions brought against different corporate defendants for different offences under the Act. 264 The principle of totality operates to ensure that the total criminality of a defendant in relation to an incident is properly and justly assessed. It is difficult to envisage how the principle, so expressed, can be used to measure the criminality of more than one defendant no matter how closely related. The principle of totality can be distinguished from the principle of parity which is directly relevant to the assessment of the appropriate penalty for co-offenders. Upon the basis of the authorities I have earlier referred to, the principle of totality would not require the sentencing of the defendants to be undertaken upon the basis that they were effectively treated as a single entity facing two charges. 265 It is not entirely clear that the decision in CI & D would suggest any contrary approach. On one view, the decision in CI & D is based upon the unusual circumstances applying in that matter where both defendants had supervisory responsibility for the employees concerned. In any event, the decision is, in my view, distinguishable from the factual circumstances in this matter. 266 In this matter there is a connection between the defendants in the present matter. Both companies operate within the "McDonald's system" (although the relationships between corporations within that system were not fully explained). The second defendant is a wholly owned subsidiary of the first defendant. The second defendant has an interest in the property and buildings in which the restaurant is operated and the first defendant has an interest in the direct operation of the restaurant. These interests are given effect to respectively by the lease and licence agreements operating in relation to Lyndhurst which, Mr Harmer describes, is constituting a franchise arrangement. There is also a common substratum of facts in relation to the accident. 267 There are, however, a number of significant differences in this case from CI & D. Firstly, the premises in CI & D were owned by Industries and leased directly to the subsidiary company, Manufacturing. In this matter, whilst there is a franchise arrangement, the defendants exercise control in relation to a third party. The nature of that control differs depending upon the particular interest of the defendant as arising between the lease and the licence. It is true that there is a common purpose of control to give conformity to the McDonald's system but the result of these arrangements are that the control, for the purposes of safety of employees, is exercised differentially between the defendants. It is noted that even after the accident the contributions to the changes to the system of work and operations differed as between the defendants. The refit of premises was undertaken by both entities (suggesting a role in structure of the premises by the first defendant) but the contributions to the refit by the defendants were in differing amounts. 268 Furthermore, in CI & D both Manufacturing and Industries had direct responsibility for the employees. The court found (at 182) that the defendants had failed to supervise the employees. In relation to defences raised under s53 of the Act, the court found that both Manufacturing and Industries exercised control over the employer and manager of the employees respectively. This would appear to have reflected the court's finding as to the 'intimacy' of the relationship between Manufacturing and Industries. 269 Secondly, and consistent with the approach in McLoughlin v ICI Australia Operations Pty Limited, the gravamen of the offences in this matter are not the same as between the defendants. As previously mentioned, there are different summonses relating to different offences. The particularisation of the failures is different in each summons. Whilst charges were brought under differing sections of the Act in CI & D, the particularisation of the offence was closely related and to some extent interconnected, for example, in relation to the supervision of the employees. 270 Thirdly, the defendants faced the same maximum penalty in CI & D. Here, the first defendant has a prior conviction and, as I have earlier noted, thereby faces a higher maximum penalty than the second defendant. This raises practical difficulties for the approach contended for by the defendants. 271 In my view, the principle of totality does not require the two defendants to be treated as effectively one entity facing offences under s17 for the purposes of the assessment of penalty and should not be applied in this matter. Rather, there should be a proper weighing of the respective culpabilities of the defendants and, in this regard, attention should be paid in properly measuring the actual culpability of each defendant in relation to the detriments to safety involved in the accident. Where there is overlapping responsibilities then the Court will ensure that there occurs a proper apportioning of responsibility by the respective defendants.

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