WorkCover Authority of New South Wales (Inspector Morgenthal) v Rail Corporation New South Wales

Industrial Relations Commission (NSW)|2009-05-01|Before: Staff J, Mr P

CITATION: WorkCover Authority of New South Wales (Inspector Morgenthal) v Rail Corporation New South Wales [2009] NSWIRComm 76

PROSECUTOR Inspector Mark Morgenthal PARTIES: DEFENDANT Rail Corporation New South Wales

CATCHWORDS: Occupational health and safety - Rail authority - Rail mounted crane tipped over - Employee trapped in operator's cabin - Obvious risk to safety - Aggravating factors - Mitigating factors - General deterrence - Specific deterrence - Subjective considerations - Previous conviction - Guilty plea - Penalty imposed - Costs

Occupational Health & Safety Act 2000 LEGISLATION CITED: Transport Administration Amendment (Rail Agencies) Act 2003 Transport Administration Amendment (Rail and Ferry Transport Authorities) Act 2008

Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Inspector Ian Lancaster v Rail Corporation of New South Wales. Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 [2008] NSWIRComm 189 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 CASES CITED: Morrison v Coal Operations Australia Ltd (No 2) (2005) 41 IR 465 R v Thomson: R v Houlton (2000) 49 NSWLR 383 Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another (2000) 95 IR 383 WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 WorkCover Authority of New South Wales (Inspector Larkin) v Rice Growers Co-operative Limited (2002) 120 IR 123 WorkCover Authority of New South Wales (Inspector Riley) v Broken Hill Proprietary Company Limited (1998) 83 IR 427

PROSECUTOR Counsel: Mr I Taylor of counsel Solicitor: Ms K Longin WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: DEFENDANT Counsel: Mr P Kite SC Solicitor: Ms L Constantine Blake Dawson Lawyers

WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR MORGENTHAL) V RAIL CORPORATION NEW SOUTH WALES

Prosecution under section 8(1) of the Occupational Health and Safety Act 2000

1 Rail Corporation New South Wales ("the defendant") was established as a State owned corporation on 1 January 2004 under the Transport Administration Amendment (Rail Agencies) Act 2003. 2 On 1 January 2009, pursuant to the Transport Administration Amendment (Rail and Ferry Transport Authorities) Act 2008, the defendant became a New South Wales Government Agency, as that term is used in the amending Act. 3 As part of its operations, the defendant established the RailCorp Emergency Train Recovery Unit ("RETRU"). The RETRU is responsible for train recovery work on the defendant's network. Employees of the RETRU attend major and minor rail-based incidents, such as collisions, derailments, and major technical failures on rolling stock that could interfere with train operations. 4 On 21 January 2007, Mr Mohamad Elwazze, an employee of the RETRU, was operating a Cowan Boyd rail mounted crane that tipped over, coming to rest on its side. Mr Elwazze was trapped in the operator's cabin of the crane for over an hour until released by emergency services. He suffered swelling to his right hand, scars on his upper left arm, cuts and scratches on his left leg. His left little finger continues to suffer ongoing numbness. Mr Elwazze was hospitalised for four days. He returned to his duties approximately nine weeks after the incident. 5 The defendant was prosecuted by Inspector Mark Morgenthal of the WorkCover Authority under s 8(1) of the Occupational Health & Safety Act 2000 ("the Act"). That section provides:

(1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. 6 The defendant was charged with failing to ensure: The health, safety and welfare at work of all its employees, and in particular, Mohamad Farouk Elwazze. The particulars of the charge were: i. The defendant failed to ensure the provision and maintenance of a safe system of work for operating a 110 tonne diesel hydraulic rail-mounted crane manufactured by Cowans Boyd and referred to as "Cowans Boyd RC110-11T" ('the rail crane') such that employees, in particular the operator of the rail crane, Mr Elwazze, were not exposed to the risk of injury, and in particular failed to have a system of work that ensured that when the rail crane jib was being used to move a counterweight an appropriate system of work was used to prevent the rail crane tipping over and, without limiting the foregoing, failed to ensure that when the rail crane jib was being used to move a counterweight: a. The four hydraulically operated telescopic swing outrigger beams incorporating hydraulic jacks ('the outrigger props') were in place; or b. It was put in an operating mode that ensured that the self-levelling function operated. ii. The defendant failed to provide such information, instruction, training and supervision as was necessary to ensure the employees' health and safety at work, in particular by failing to ensure that the employees were given adequate instructions, training and supervision: a. To use an appropriate method to ensure the rail crane was kept level whilst operating the jib to move counterweights; and b. As to how the rail crane was to be operated when on superelevated tracks. iii. The defendant failed to have proper systems in place to identify, assess and control risks to health such that employees, including the operator of the rail crane Mr Elwazze, were not exposed to the risk of injury, in particular by failing to conduct any, or any adequate, risk assessment: a. In respect of the packing away of the rail crane in the particular circumstances that existed on that day; and b. Prior to operating the rail crane on superelevated track. iv. As a result of the abovementioned failures, Mr Elwazze was placed at risk of injury and was injured while employed at the site. The defendant pleaded guilty to the charge. Prosecutor's evidence 7 The prosecutor tendered an agreed statement of facts. It was agreed that: The incident 3. An incident occurred on 21 January 2007 at premises of RailCorp, namely a railway line junction near the Tewinga Road access gate near the Sefton Junction, New South Wales ("the incident site") causing injury to Mohamad Elwazze, an employee of RailCorp. 4. The incident involved the derailment of a diesel powered rail mounted Cowans Boyd RC110-11T rail crane ('the rail crane') being operated by Mr Elwazze.

The rail crane 5. The rail crane is a 110 tonne diesel hydraulic rail crane manufactured by Cowan Boyd unit of Carlisle, part of the Rolls Royce Industrial Power Group, to the requirements of the State Rail Authority and is referred to as a type RC110-11T. 6. The rail crane incorporates a carriage with full 360 degree slewing capabilities mounted on a large diameter roller bearing slewing ring. The carriage houses the main and auxiliary hoist winches, the haul unit, slewing unit, two-man operator's cab and main and auxiliary diesel engines. It has a three element telescopic boom. The boom is supported on a six-axle match-wagon when moving. 7. The carriage incorporates four independent hydraulically operated telescopic swing outrigger beams incorporating hydraulic jacks ('the outrigger props'). There is one outrigger prop at each corner of the carriage to provide suitable propping bases. 8. The rail crane incorporates a variable tilt system that ensures the carriage remains level as the crane is placed on a superelevated (canted) track. This tilt system is operational when the rail crane is put into 'free on rail' mode. If the rail crane is used in circumstances where the outrigger props are not in place then when put into 'free on rail' mode the variable tilt system will operate to give the rail crane increased stability. 9. When the rail crane is moved it is put into the 'in train' mode. In that mode the variable tilt system does not operate. This mode is used when the rail crane is transported along the rail line. 10. When the rail crane has the outrigger props in place it can be operated in 'propped' mode. The 'propped' mode is used where the outrigger props have been extended and locked into place. 11. The rail crane controls include a three-position control switch located on the drivers control console in the crane operator's cab. The switch sets the crane to operate in the 'in train', 'free on rail' or 'propped' mode. 12. When the rail crane is operated in either 'free on rail' or 'propped' mode a safe load indicator ('SLI') operates. Using sensors, the SLI system monitors all crane functions and displays the approach to rated load. If an overload condition is approached, the system warns the operator by means of an audible alarm, warning lights and finally motion cut. The SLI does not operate if the rail crane is in the 'in train' mode. 13. The rail crane was supplied with an operator's manual. The operator's manual provided instructions as to the steps to be taken to complete the task of packing up the crane prior to the crane being placed in 'in train' mode in order to move it. Those instructions detailed that the 'in train' position should be activated after the counterweight ballast had been moved and the jib had been stowed. Whilst the counterweight ballast was moved the operator's manual infers that the crane is to be either in 'free on rail' mode and so self-levels or alternatively is 'propped', with the outrigger props in place. In either mode the SLI would operate to warn a driver if the crane was being operated in a manner that rendered it in danger of tipping.

Details of the incident 14. On 20 January 2007 the rail crane had been used at the incident site to assist another crane supplied by Gillespie Cranes to lift a class 422 locomotive that had derailed. 15. On the morning of 21 January 2007 Mohamad Elwazze, Engineering Operator Class 5, Antony Limonelli, Engineering Operator Class 5, Patrick Donoghue, Leading Hand, and Ross Seghers, Incident Manager, were at the incident site for the task of packing away the rail crane. 16. The process of packing the rail crane included moving three counterweights onto a match wagon, and one counterweight onto the carriage of the crane. 17. While there was a safe work method statement for operating the rail crane, no specific documented risk assessment was undertaken that considered the risks associated with packing up the rail crane on that particular day on that rail track. 18. Mr Elwazze had limited experience operating the rail crane due to the small number of recovery operations performed with the rail crane since commissioning. Mr Seghers decided that Mr Elwazze should operate the crane that day rather than the more experienced operator, Mr Limonelli, because Mr Elwazze was a crane operator and to give him more experience. 19. The first counterweight was placed on the rear of the crane by slewing to the right side of the crane. The jib was slewed back along the right side of the crane to its original position. The next three counterweights were lifted onto an intermediate position on the match wagon using the jib. Those three counterweights were then lifted onto a stowage position on the match wagon and secured. The jib was brought back to its original position. In each case the rail crane was located away from the cantered track. 20. Either before moving any counterweights, or at least before moving the last counterweight, the outrigger props on the rail crane were stowed. 21. Before the fourth counterweight was raised the rail crane was moved onto a section of the track closer to where the derailed locomotive had been located, that had been damaged as a result of the derailment of the locomotive. This was because the operators needed to come closer to the original derailment site to pick up outrigger timber. At the point to which the rail crane was relocated one track was higher than the other, a situation that is known as a 'superelevated track'. In this position there was an increased risk that the crane would tip over. 22. No documented risk assessment was undertaken that recorded additional risks that arose from the rail crane being positioned and operated on the superelevated track and the steps to be taken to address such risks. 23. After the rail cane had been repositioned onto the superelevated track Mr Elwazze was instructed to operate the jib of the crane to move the fourth counterweight from the rear of the crane to the match wagon. The jib was slewed to the right to pick up the fourth counterweight. The fourth counterweight was then lifted and Mr Elwazze began to slew to the right hand side of the crane. Mr Seghers was concerned that the jib of the crane would touch the overhead wires if it were slewed to the right side of the crane in this new position. No formal risk assessment was carried out for the movement of the jib to the left side of the crane. Mr Seghers instructed Mr Elwazze to move the fourth counterweight along the left side of the crane. Mr Elwazze stopped the crane and said to Mr Seghers that slewing to the left side of the crane was dangerous and could not be done. Mr Seghers said to Mr Elwazze that he should slew to the left side of the crane, that Mr Seghers would watch Mr Elwazze and if anything happened, Mr Seghers would stop Mr Elwazze. Before issuing this instruction RailCorp staff did not re-assess what mode the crane was in for the lift of the fourth counterweight, nor re-consider the crane's stability while positioned on the superelevated tracks. 24. The rail crane at this point was in the 'in train' mode with the outrigger props stowed. 25. Mr Elwazze slewed the jib to the left hand side of the crane as instructed placing the counterweight on the left side. The rail crane started to tip and then fell onto the ground coming to a rest on its side. 26. Mr Elwazze remained trapped in the operator's cabin for over an hour until released by emergency services. He suffered swelling to his right hand, scars on his upper left arm, cuts and scratches on his left leg and his left little finger suffers ongoing numbness. Mr Elwazze was hospitalised for four days. Mr Elwazze returned to his duties approximately 9 weeks after the incident. 27. By operating the rail crane whilst in the 'in train' mode the self-levelling function did not operate, nor did the SLI warning system operate. If the crane had been operated with the outrigger props in place in 'propped' mode, the crane would not have tipped over. Alternatively, if the crane had been placed in 'free on rail' mode, without the outrigger props stowed, the self-levelling function would have reduced the risk of the crane tipping over and the SLI warning system should have warned the operator before it tipped over. 28. Mr Elwazze was not given sufficient training as to how the rail crane was to be operated safely while positioned on superelevated track. 29. On the relevant day Mr Seghers gave Mr Elwazze instructions as to the direction to slew the Cowan Boyd rail mounted crane in circumstances where Mr Seghers did not hold a certificate of competency to operate and dismantle the crane. Changes to the system of work after the incident 30. After the incident RailCorp's solicitors engaged Conder Management Services ('CMS') to undertake an investigation into the incident. CMS prepared a report for RailCorp on 12 June 2007. That report was provided to WorkCover. 31. At around the time of the incident, RailCorp was implementing its improved Safety Management System (SMS), in particular including the consideration of safety related matters in the procurement of plant. 32. RailCorp determined following the incident that whenever a rail mounted crane is required RailCorp would procure the services of an external third party. RailCorp does not intend to use the Cowan Boyd rail mounted crane, the subject of the incident, in the future. 8 Also tendered by the prosecution were: (a) three factual inspection reports of Inspector Morgenthal, each dated 25 June 2007. The first report detailed observations made on 22 June 2007; (b) the second report detailed observations made on 23 January 2007; (c) the third report detailed observations made on 2 February 2007. (d) 20 colour photographs taken by Inspector Morgenthal on 22 January 2007; (e) 15 colour photographs taken by Inspector Morgenthal on 23 January 2007; (f) a prior conviction certificate for the defendant recording a conviction on 7 October 2008. Evidence for the defendant 9 Mr P Kite SC, who appeared for the defendant, read affidavits of Douglas Higgins, Chief Engineer, Rollingstock, Engineering & Planning, Asset Management Group and Clare Louise Kitcher, Group General Manager, Safety and Environment. Neither was required for cross-examination. 10 Mr Higgins has held the position of Chief Engineer, Rollingstock, since February 2008. Prior to then, he held the position of Manager, Maintenance Operations. His evidence included the following: (i) Asset Management Group currently has approximately 4,200 employees who are responsible for developing and maintaining RailCorp's infrastructure such as rolling stock, track, signals, overhead wiring, communications and control systems, structures, major projects, associated capital works and strategic asset management; (ii) the Rolling Stock Division's primary function is the maintenance of the defendant's passenger rolling stock fleet and incident recovery. At the date of the incident approximately 800 people were employed in this division.; (iii) the RailCorp Emergency Train Recovery Unit is part of the Rollingstock division. The Unit attends major and minor rail based incidents, such as collisions, derailments, and major technical failures on rolling stock that could interfere with train operations. At the date of the incident, eight employees were employed within the Unit. There are no contractors or labour hire workers presently engaged in the Unit; (iv) at the time of the incident, the Unit's equipment included the Cowan Boyd rail mounted crane, which was involved in the incident, jacking equipment, and other general train recovery equipment; (v) that he had responsibility for occupational health and safety ("OHS") across the Maintenance Operations sub-division. In addition, the defendant employs a dedicated corporate safety group which is led by Ms Kitcher; (vi) that he had attended the site shortly after the incident. He expressed his deep regret and said the defendant no longer uses the Cowan Boyd rail mounted crane. He said the defendant is committed to ensuring that other safety incidents of this nature, or at all, do not occur in the future. (vii) Mr Elwazze has worked within the Unit for approximately 15 years and has been employed by the defendant since 1980; (viii) prior to the incident, Mr Elwazze has completed several formal training courses in relation to the safe operation of types of plant and safe work systems. He was also qualified as a train driver, crane chaser and a forklift driver. Mr Elwazze had received instruction and training in the operational and safety procedures for the crane; (ix) the Cowan Boyd rail mounted crane was a special purpose "wrecking" crane especially designed to be used in rail "wreck" recovery operations; (x) discussions took place to determine the appropriate time and day to undertake the recovery operation of the derailed locomotive. It was scheduled to occur on the weekend to allow RETRU staff time to inspect the site, prepare for the lift, and to allow more time to perform the recovery, without the weekday pressures and ensuring minimal disruptions to passenger services. A site inspection was undertaken on or about 18 January 2007 by Mr Craig Stanfield, Regional Manager. Mr Higgins also undertook a site inspection with Mr Seghers, the Incident Manager of the RETRU. An initial risk assessment was undertaken. It was noted that the track was super elevated near the derailed locomotive. Consideration was given if this would prevent the crane from being used, or present a problem with its use. It was considered that the crane's self levelling system would control the risk. Prior to the recovery on 20 January 2007, the RETRU gang attended the site on approximately three occasions to inspect the derailed locomotive and the site conditions. On 20 January 2007, the RETRU successfully recovered the derailed locomotive; (xi) having successfully completed the recovery of the locomotive, the defendant's crew were packing up the Cowan Boyd rail mounted crane on 21 January 2007 when the incident occurred. Mr Elwazze was operating the crane; (xii) at the time of the incident, the defendant was in the implementation phase of transitioning to a new RailCorp safety manual system ("SMS"). Prior to this system, a safety handbook for passenger fleet maintenance was in operation; (xiii) in accordance with the SMS prior to the recovery operation, the crane underwent a comprehensive inspection at the lift shop. A pre-start checklist for the crane was annexed to the affidavit. A pre-work briefing was presented by the Safety Facilitator Team Leader and a DVD training program shown to the employees. Work tasks were discussed by the team for the recovery operation and weather forecasts noted. The Rail Commander gave an on-site briefing on 20 January 2007 regarding issues associated with working in the rail corridor. This was documented in a "Protection Plan" signed by those in attendance and annexed to the affidavit. The "Protection Plan" identified the risks in undertaking the re-railing of the locomotive. Two SWMS for crane use in recovery operations were in place at the time of the incident. Another OHS system that was in place at the time of the incident was a RETRU procedure statement entitled "SettingUp/Working the Rail Crane on a Derailment/Worksite". This procedure was annexed to the affidavit. It included instructions for preparing the crane for in-train running (the packing up stage), retracting the outriggers and stowing the jib on the match wagon. The operating manual for the Cowan Boyd rail recovery train was also in place. This manual was annexed to the affidavit and included instructions in respect of preparing the crane for "in train" running; (xiv) a formal pre-work briefing was not undertaken on this occasion, nor was a risk assessment documented after Mr Donoghue, the Leading Hand and Mr Seghers inspected the worksite on 20 January 2007; (xv) following the incident, the defendant implemented a number of changes as follows: a) Mr Ian Moir, the Corporate Safety manager, attended the site to assist with the incident investigation; b) the defendant arranged for a counsellor to attend the site and be available to the employees; c) the pack up of the Cowan Boyd rail mounted crane was suspended on the day of the incident. Gillespie Cranes were subsequently engaged to attend to the recovery of the crane; d) the Cowan Boyd rail mounted crane remains suspended from use and stored at Chullora; e) a review into the incident was conducted by Mr Rocky Condello of Conder Management Services, an independent consultancy firm; f) arising from the Condello Review, the defendant accepts that it failed at the time it procured the crane to fully understand the inherent risks in the design of the crane and its operation and how to effectively control those risks; g) the defendant acknowledged that Mr Elwazze operated the crane using a trained operating position that did not allow the crane to self level, causing the crane to overbalance when the crane's centre of gravity extended beyond its outermost footing; h) the defendant acknowledged that the crane had previously been operated this way. The Condello Review suggested that the procedures in place, including the manufacturer's operating manual, were not clear on this issue; i) the defendant acknowledged that it failed to identify that there was a latent deficiency in the applicable safe work procedures and in the operator's understanding of how the crane should be operated; j) the defendant invited Mr Condello to give a briefing on his review to all employees of the RETRU and discussions took place between the employees, managers from the defendant and safety personnel. (xvi) during Mr Elwazze's stay in hospital, he was visited by members of the RETRU. The defendant put in place a return to work plan and an injury management plan to assist his return to full duties. He was also provided with psychological counselling and physiotherapy at the defendant's expense. Mr Elwazze continues to work for RailCorp in the RETRU; (xvii) one of the defendant's key occupational health and safety philosophies is "A SAFE RAILWAY, A SAFE WORKPLACE, A SAFE CULTURE." Since the incident, significant steps have been taken to improve safety management systems across the Rolling Stock divisions. These include: a) a Safety Change Assessment and Reporting Determination ("SCARD") procedure. This procedure identifies issues and would have identified the latent deficiency in the defendant's understanding of the Cowan Boyd crane; b) the SCARD process determines whether the proposed new equipment will introduce a minor or significant safety risk change. The SCARD may identify safety hazards relating to new equipment which may lead to the equipment not being purchased; c) a dedicated Maintenance Operations Safety Facilitator was appointed in November 2007. The Safety Facilitator is responsible for implementing SMS programs and protocols, developing and implementing business plans for ensuring safety improvement across the Rolling Stock division; d) a dedicated Maintenance Operations Quality and Compliance Officer was appointed in February 2007. The officer is responsible for ensuring that obligations arising from legislation, corporate policies or business unit codes of practice are registered within Maintenance Operations. Both the facilitator and the officer have responsibility for conducting workplace and procedural audits. (xviii) the defendant also has a number of safety committees. The Flemington Safety Committee meets approximately monthly and is attended by an elected member of the RETRU. There is also a Peak Safety Meeting held once a month which considers safety issues across the division. At the time of the incident, there had been no lost time injuries within the RETRU for the previous two years; (xix) Maintenance Operations Hazard Review Meetings take place approximately once a month and provide a forum to consider current hazards and determine whether the SWMS or SWI's are appropriate and working. These meetings were introduced in March 2006; (xx) the defendant also has an incident reporting telephone hotline which allows employees to report any injury. Calls are recorded in a database which is monitored by the Division Safety Facilitator. Procedures for reporting a hazard are also displayed on safety notice boards which explain what employees need to do if they identify a workplace hazard; (xxi) monthly team briefs are held within the Rolling Stock Division. At these meetings, managers report on a number of safety related matters, including if there are any outstanding safety issues. Employees have an opportunity to raise any safety issue. Employees also have access to the defendant's dedicated Safety Intranet; (xxii) all new employees are required to participate in a week long induction. Once employment commences, Rolling Stock Division employees receive training in accordance with the requirements of the defendant's SMS; (xxiii) audits of compliance with SMS are regularly conducted within the Rolling Stock Division. These are undertaken by Mr Higgins and provided to the General Manager, Line Managers and Front Line Managers. The last audit was in November 2008; (xxiv) the defendant holds an annual Safety Conference at the Convention Centre in Darling Harbour. The conference is open to all employees to attend and is always attended by members of the Rolling Stock Division. Topics often include new safety initiatives, and presentations from injured workers and legal representatives. Safety competitions are held once a year within the defendant. In 2008, a RETRU specific Safety Competition was held. 11 Ms Kitcher is the Group General Manager, Safety & Environment of the defendant. Her evidence included the following: (i) the defendant employs approximately 13,800 people across two registered business: CityRail and CountryLink; (ii) CitiRail's operations include: a) a fleet of approximately 1,644 carriages running on 2,100 kilometres of track; b) approximately 2,418 weekday passenger services and 1,692 daily/weekend services; c) carrying approximately 500,000 customers on 950,000 passenger journeys per weekday to and from over 300 stations; d) a patronage increase of 5.2 per cent to approximately 296 million passenger journeys in 2007/2008 financial year. (iii) CountryLink's operations involve: a) a fleet of 60 XPT carriages, 19 power cars and 23 Xplorer carriages; b) approximately 144 weekly rail services; c) approximately 560 weekly Road Coach Services to 363 destinations; d) approximately 1.6 million passenger journeys in the financial 2007/2008 financial year. (iv) the defendant holds a common set of values that provide a framework for its operations. The first of those values is "safety first". A poster highlighting this and other values was annexed to the affidavit; (v) the defendant has in place a Safety Strategic Plan that sets its strategic direction for safety and the actions it proposes to take to further that direction over a five year time period. A copy of the plan was attached to the affidavit under the heading "Where We are Going". The defendant's safety vision was described as "A safe railway, a safe workplace; a safe culture. How we get there? The plan outlined four fundamental approaches for the improvement of safety. These included creating a strong, risk aware safety culture, from the Board to the workplace, learning lessons from accidents and incidents across the rail and other industries to continually strengthen expertise, systems and performance and constantly reassessing safety and risk performance; (vi) the defendant also has a safety policy. Its purpose is to have a culture characterised by a commitment to its safety vision, safe behaviours and practices and continual improvement; a climate in which people are willing to report safety risks, incidents and near misses; an atmosphere of trust in which people are encouraged and rewarded for communicated essential safety-related information and a willingness and competency to draw constructive conclusions from safety accidents and incidents, and implement reforms when required; (vii) the foundation of the defendant's safety policy was summarised by these principles: a) good safety performance, planning, training, consultation, supervision and accountability; b) risks are identified and either eliminated or effectively managed; c) all requirements of OHS and rail safety legislation are met; d) we are all responsible for safety; e) all injuries are preventable. A copy of the safety policy was annexed to the affidavit. (viii) reference was also made by Ms Kitcher to the defendant's RailCorp Safety Management System ("SMS"). The purpose of the SMS is to ensure the effective identification, management and control of safety risks across RailCorp's operations. The defendant has nine key OHS priority areas. These are: Working environment; plant; manual handling; hazardous substances and dangerous goods; hazardous materials; electrical safety; construction and maintenance planning; working at heights and workplace violence; (ix) In each workplace, as part of the SMS, a workplace risk register is required to be developed and continually maintained. The register is a tool that contains information about risks that need an ongoing control. Line managers of relevant workplaces are responsible for preparing the workplace risk registers in consultation with workplace safety committees and safety representatives. All employees have access to the register for their workplace either in hard copy, electronically by the Intranet, or both (x) the defendant has safe work method statements ("SWMS") which describe the control measures to be applied to a work activity. They must include job steps, a description of the equipment used in the work, standards or codes to be complied with, the qualifications of the personnel and training required to do the work; (xi) Safe Work Instructions ("SWIs") are prepared to describe the job steps required for the safe operation of an item of plant or equipment. It is a job specific instruction; (xii) the defendant has a Working Safely Handbook. This is a booklet developed for employees and contractors which contains an overview of the safety requirements, strategies, systems and processes that the defendant has established. It is provided to all employees, to raise their awareness of safety issues relevant to the work they are undertaking, and to assist employees to contribute to their personal safety while at work. A copy of the handbook was annexed to the affidavit. Key safety category included hazardous rail corridor locations; working outdoors, plant, including specific reference to machine guarding and tool guards, forklift trucks and cranes; excavation; (xiii) Ms Kitcher described the induction programs provided to employees and training provided by the defendant to ensure the competency of its workforce; (xiv) the defendant has a sharing safety information policy. This includes "Safety Alert" which is used to communicate to all workers an urgent safety related message. The safety alert is also included in a bulletin "What's News", which is emailed to all staff and posted on noticeboards and attached to the affidavit. One related to the potential for combustion of certain headset batteries and the other was about the risk of electric shock when manipulating a certain control jumper; (xv) the defendant also has safety notice board(s) placed in all its workplaces to communicate safety information to its employees. The defendant has well over 100 safety practitioners who assist line managers to fulfil their occupational health and safety responsibilities; (xvi) in December 2005, the defendant implemented a "Safety Knowledge Management System" ("SKMS"). This is a database that houses the defendant's safety risk profile, SMS performance requirements, safety events/incidents and safety actions; (xvii) the defendant has an extensive program of audits and inspections in place. The prime purpose of the audit program is to verify that the SMS at all levels has been properly implemented and maintained. Audits are systematic, independent and documented. Inspections generally concentrate on evaluating specific items or activities, e.g. piece of plant or safe working activity; (xviii) contractors are also required to conform to the defendant's SMS and the defendant has implemented several contract specific safety initiatives. In 2008, the defendant commenced implementation of the procurement transformation program. This program included a further revision and improvement of its procurement procedures and methodology; (xix) Ms Kitcher describes some examples of safety initiatives and programs run by the defendant. These include promoting a "Just Culture". This includes creating an environment that seeks out risk and system improvement through better incident reporting, promoting openness and learning from incidents and a health and fitness program which includes the development of fatigue management arrangements and the development of a robust alcohol and other drugs program. The defendant also has industry involvement where it promotes rail safety principles through Australian Railways. It is a member of the Rail Industry Safety Standards Board ("RISSB"), which has been established to write nationally applicable standards and codes or practice; (xx) the defendant promotes safety for employees. Examples include the RailCorp Annual Safety Convention, which runs over two days at the Convention Centre, Darling Harbour. The 2006 Convention won that year's National Safety Council of Australia Award for Best Communication of a Safety Message. Approximately 1,500 people attended the 2008 Safety Convention. A copy of the program for the 2008 Convention was annexed; (xxi) the defendant holds an annual safety competition across the whole of the organisation to promote a safe and healthy organisation or culture. Approximately 850 people attended the competition in 2008; (xxii) approximately once every two years the defendant organises for the chairpersons of RailCorp's Workplace Safety Committee, a forum aimed at facilitating networking between the Chairpersons and discussion regarding how each Chairperson runs their Committee. Approximately 65 employees attended the forum in 2008. The agenda for the 2008 forum was annexed to the affidavit; (xxiii) the defendant's lost time injury frequency rate has reduced considerably from 2004/2005 to 2007/2008 from 33.8 days to 21.1 days. 87 of the 88 recommendations of the Waterfall Special Commission of Inquiry into a train derailment at Waterfall have been implemented by the defendant; (xxiv) the defendant received in 2006, an award for Excellence in Occupational Health and Safety from the National Safety Council of Australia/Telstra National Safety Awards. In 2008, the defendant was short listed for the best implementation of a specific OHS Management System in the National Safety Council of Australia, Safety Awards of Excellence for RailCorp's SMS. It was also short listed for the best Workplace Health & Safety Management System in the WorkCover NSW, Safe Work Awards 2008; (xxv) the defendant from 2004, has spent in excess of $30,000,000 on dedicated safety initiatives from development of SMS to SMS training, to running safety conventions and other initiatives referred to earlier in these reasons. This figure does not include expenditure on ongoing delivery of safety risk controls such as equipment maintenance and competency training or other operational initiatives or programs which also include a safety component; (xxvi) the defendant prides itself on being a good corporate citizen and contributing to the community in which it operates. Examples of community projects recently implemented by the defendant include Passenger Rail Safety, Pram Safety Project and a Heatsmart Program which was designed to educate passengers on how to travel safely during the summer months; (xxvii) the defendant is a committed supporter of numerous charities including the Cancer Council, Westmead Children's Hospital and the Salvation Army. Relevant Principles 12 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) (2005) 41 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the Act. Their Honours stated at [8] - [15]: [8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing.

[9] In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: [I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion." [10] The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474 as follows:

[I]t is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ... [11] The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows:

The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27:

Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), 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.

[12] On the issue of foreseeability, the Full Bench in Capral also stated at 646; 62 - 63:

The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209 - 210) in these terms: ... reliance on "hindsight" must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to 'ensure ... health, safety and welfare at work' and the decided cases which make plain the nature of the obligation.

[13] It is also necessary to consider the damage and injury suffered in the context of the evidence and "in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries which have been suffered, or which may have been suffered, and the gravity of the offence" ( Capral at 650; 66). On that point the Full Bench in Capral stated:

We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5, Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 377 at 378, Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456, Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131, WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and WorkCover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) (at [22]).

[14] The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows:

[B]oth aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Workcover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [40]- 43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.

[15] In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]:

[I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c). Consideration 13 The primary consideration, as set out in the above principles, requires a determination of the objective seriousness of the offence. This involves examining the nature and quality of the offence, as set out in the agreed statement of facts, and the evidence. The defendant acknowledged that as a result of the incident that it was the practise of the operators to select the same crane operating position on each occasion that the crane was being packed up. The Condello Review suggested that the procedures in place, including the manufacturer's operating manual were not clear on this issue. This led to a misunderstanding on the part of the employees regarding the stabilisation of the rail crane. That misunderstanding was not identified by management as the immediate managers and the leading hand were trained themselves by the manufacturer with the manufacturer's manual suffering from the same defect as the defendant's manual. The rail crane was purpose built for the defendant. 14 The defendant further acknowledged that before the incident it failed to identify that there was a latent deficiency in the applicable Safe Work Procedures and in the operator's understanding of how the crane should have been operated. Whilst this does not excuse the defendant, it must be given some credit in determining the level of its culpability for having undertaken a risk assessment. Such assessment was clearly inadequate. In addition, there were a number of OHS systems and procedures in place regarding the use of the crane in recovering a derailed locomotive. Two site inspections were undertaken to identify the risks before the operation was carried out and the crane underwent a comprehensive inspection at the lift shop and was found to be mechanically sound for the job. Although there was training conducted at pre-work briefings and a discussion between team members about the task, this was not documented. 15 It is abundantly clear from Mr Higgins' and Ms Kitcher's affidavits and the documentary material exhibited to those affidavits, that the defendant takes its responsibilities for occupational health and safety very seriously. This is a factor that mitigates the objective seriousness of the offence: see Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326; WorkCover Authority of New South Wales (Inspector Riley) v Broken Hill Proprietary Company Limited (1998) 83 IR 427; Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8; WorkCover Authority of New South Wales (Inspector Larkin) v Rice Growers Co-operative Limited (2002) 120 IR 123 and WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another (2000) 95 IR 383. 16 The derailed locomotive involved three stages. First, setting up the rail crane. Secondly, the recovery operation. Thirdly, the packing up of the rail crane. 17 The defendant's failures relate to the packing up of the crane after the task of recovering the locomotive was complete. The defendant accepted that there was a significant risk to the employees in packing up the crane. While there was a safe work method statement for operating the rail crane, no specific documented risk assessment was undertaken that considered the risks associated with packing up the rail crane on the day of the incident. 18 Mr Elwazze had limited experience operating the rail crane due to the small number of recovery operations performed with the rail crane. It was decided that he should operate the crane on the day of the incident because he was a crane operator and it would give him more experience. Either before moving any counterweights, or at least before moving the last counterweight, the outrigger props on the rail crane were stowed. Before the fourth counterweight was raised, the rail crane was moved along the rail track to a section where one track was higher than the other, a situation that is known as a superelevated track. In this position, there was an increased risk that the crane would tip over. Furthermore, no documented risk assessment was undertaken that recorded additional risks that arose from the rail crane being positioned and operated on the superelevated track. Whilst lifting the fourth counterweight, Mr Elwazze stopped the crane and said to Mr Seghers that slewing to the left side of the crane was dangerous and should not be done. 19 Mr Seghers informed Mr Elwazze that he should slew to the left side of the crane and that he would watch and if anything happened, he would stop Mr Elwazze. Before issuing this instruction, the defendant did not reassess what mode the crane was in for the lift of the fourth counterweight, nor reconsider the crane's stability while positioned on the superelevated tracks. The rail crane, at this point, was in the "in train" mode with the outrigger props stowed. As Mr Elwazze slewed the jib to the left hand side of the crane, as instructed, the rail crane started to tip and then fell onto the ground. 20 Clearly, a risk assessment should have been carried out to determine firstly, whether a risk could arise from the packing up of the crane and secondly, whether a risk would arise in respect of the crane's stability while positioned on the superelevated tracks. The purpose of any such assessment is to search out any risk in the workplace. It was during the third phase of the operation that a serious risk to safety occurred. The risk was that if the rail crane was not properly stabilised with the outrigger props extended, once it attempted to lift the counterweight, it would fall over. This risk was obvious. 21 The Act imposes an obligation on employers to be proactive with a view to preventing risks of injury, not merely reacting to them when they become manifest in an incident. As it was observed in WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 at 85, breaches of the duties imposed by the Act may occur both by commission and omission. Employers are required to maintain constant vigilance and to take all practical precautions to ensure safety in the workplace. They must adopt an approach to safety which is proactive and not merely reactive. 22 The particulars of the charge also alleged that the defendant failed to provide such information, instruction, training and supervision as was necessary to ensure the employee's health and safety at work. Mr Elwazze was not given sufficient training as to how the rail crane was to be operated safely while positioned on the superelevated track. Mr Seghers gave Mr Elwazze instructions as to the direction to slew the rail crane in circumstances where Mr Seghers did not hold a certificate of competency to operate and dismantle the crane, although he had been trained by the manufacturer in the operation of the crane. Mr Seghers should not have directed Mr Elwazze to slew the crane with the fourth counterweight to the left after Mr Elwazze stopped the crane and said it was dangerous and could not be done. There was no adequate safe work method statement directed to the packing up of the crane. To be weighted against this, of course, is that both Mr Seghers and Mr Elwazze had been properly trained in safety matters. Secondly, there were safe work method statements which required the inspection of the crane prior to it being moved and that dealt with the "setting up and working the rail crane at a derailment site." 23 The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor that will be relevant to the assessment of the gravity of the offence; Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476; Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; 99 IR 29 at [81]; Kembla Coal and Coke Pty Ltd at [27]. It was a foreseeable risk that if the crane was not properly stabilised with the outriggers extended or otherwise supported, it would fall over. The rail crane was in the "in train" mode which meant that the outrigger props were stowed. By operating the rail crane in this mode, the self-levelling function did not operate, nor did the safe load indicator ("SLI") operate. It was clearly foreseeable that if the crane was in the wrong mode and attempted a lift, it would fall over. 24 The existence of simple and straightforward remedial steps that could have been taken by the defendant to avoid the accident are relevant in assessing the seriousness of the offence: see Kembla Coal and Coke (at [27]). The defendant's evidence is that it does not intend to use the Cowan Boyd rail mounted crane in the future. At the time of the incident, the defendant was implementing its improved Safety Management System ("SMS"), which included consideration of safety related matters in the procurement of plant. In addition, a detailed safe work method statement which includes steps in respect of all operations of cranes was introduced. There was nothing especially complicated and impracticable about these steps. 25 Although damage or injury to employees does not, of itself, dictate the seriousness of the offence, or the penalty, a breach where there was every prospect of serious consequences, may be assessed on a different basis to a breach unlikely to have such consequences. In such a case, the occurrence of death or serious injury, may manifest the degree of seriousness of the relevant risk: Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]. See also Capral Aluminium at [94] - [95]; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another at 428; Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [32]. In the present case, Mr Elwazze suffered only minor injuries and was able to return to duties approximately nine weeks after the incident. However, his injuries could have been far more serious had the jib rams landed in a slightly different position on top of the cabin. If this occurred, the jib rams could have crushed Mr Elwazze. The near miss is immaterial. In my view, there was a real risk of death or serious injury. 26 The seriousness of the risk, its foreseeability, and the ease of removing that risk, renders this offence, as was submitted by the prosecutor, to be a serious offence. In my view, the offence falls well within the mid range of seriousness. 27 In addition to the factors relating to the offence, the Court is required, in fixing penalty, to consider the need to deter others from committing the same crime and to deter the defendant from re-offending. In Capral Aluminium v WorkCover Authority at [71] - [80], the Full Bench recognised that in the industrial context, it would be rare that a sentencing court need not impose a sentence that includes an element of general deterrence. I consider it is appropriate to draw attention once again to the need for employers operating cranes to ensure that they are operated properly. It is therefore appropriate that I give significant weight to the need for general deterrence in determining penalty. 28 In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve safety following an incident are relevant, as is the propensity for the defendant to re-offend. I accept that this is not a case which calls for the imposition of some additional specific punishment aimed at deterring the defendant from further offending against the Act and/or for the purposes of compelling the defendant's attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety. The defendant has, since it came into operation in 2004, only one contravention of the legislation. It operates in a dangerous industry and has taken appropriate measures to avoid a recurrence of the offence. The evidence of Mr Higgins and Ms Kitcher demonstrate that the defendant has a very strong commitment to health and safety in the workplace and its policies and practices reflect this fact. However, it continues to operate as a large employer in a dangerous industry. I include an element in the penalty for specific deterrence. 29 There are a number of relevant subjective considerations. Firstly, a plea of guilty was entered at the earliest opportunity. I allow a discount of 25 per cent for the plea of guilty in accordance with the principles outlined in R v Thomson: R v Houlton (2000) 49 NSWLR 383. The defendant has one prior conviction. The conviction arose from an incident where a hired loader/backhoe and forklift were used to lift and position shipping containers at the defendant's depot at Coniston. During this work, a jib attachment on the loader dislodged and in falling, struck an employee on the head, causing serious injuries: Inspector Ian Lancaster v Rail Corporation of New South Wales. Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 [2008] NSWIRComm 189. The prosecutor contended that some aspects of this prosecution are similar to the incident that occurred at Coniston. Haylen J observed at [65]: ... There was no formal, documented risk assessment or safe method of work developed for the relocation of the container... There is force in the prosecutor's submissions that the entire work procedure adopted on that day was, at best, "ad hoc". 30 I note that a hired loader/backhoe was being used and the incident occurred at one of the defendant's depots. It is appropriate to take into account the nature of the proven breach in that case in considering an appropriate penalty in this case. 31 Despite this conviction, I consider, in the circumstances, that it does not indicate a propensity to re-offend. I have already observed that the defendant has a strong commitment to occupational health and safety. It no longer utilises the crane. It commissioned an independent review of the incident and provided a report to WorkCover. In addition, the defendant is a large employer in a dangerous industry. In my view, it has a good industrial safety record and is a good corporate citizen. 32 I also take into account that the defendant co-operated with the WorkCover Authority in its investigation of the incident and that Mr Higgins expressed the defendant's contrition and remorse for the incident. 33 The maximum penalty is $825,000. Having regard to all of the relevant circumstances set out in these reasons, I consider the proper penalty in this case is $320,000. ORDERS 34 The Court makes the following orders: 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence, as charged. 3. The defendant is fined an amount of $320,000 with a moiety to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or assessed.

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Cases Cited (21)