WorkCover Authority of New South Wales (Insp. Hopkins) v Red Lea Chickens Pty Ltd and Magg Transport and Packing Pty Limited

Industrial Relations Commission (NSW)|1992-06-30|Before: Boland J, Fisher CJ, Cullen JJ, Mr P

Industrial Relations Commission of New South Wales in Court Session

CITATION : WorkCover Authority of New South Wales (Insp. Hopkins) v Red Lea Chickens Pty Ltd and Magg Transport and Packing Pty Limited [2003] NSWIRComm 71 PROSECUTOR WorkCover Authority of New South Wales (Inspector Hopkins) PARTIES : DEFENDANTS Red Lea Chickens Pty Limited Magg Transport and Packing Pty Limited FILE NUMBER: IRC 379, 381 of 2002 CORAM: Boland J CATCHWORDS : Occupational health and safety - Section 15(1) and 16(1) of Occupational Health and Safety Act - Pleas of guilty by two related companies - Person injured when fell through fibreglass roof sheeting - Whether charges should have been pursued in lower court - Whether principle of totality applied - Overall penalty divided equally between the defendants Drug Misuse and Trafficking Act 1985 LEGISLATION CITED : Factory Shops and Industries Act 1962 Fines Act 1996 Occupational Health and Safety Act 1983 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, 99 IR 29 Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Fletcher Constructions Australia Limited v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 Ferguson v Nelmac Pty Limited (1999) 92 IR 188 CASES CITED : Hannah v Wonar Pty Limited (unreported, Fisher CJ, Glynn and Cullen JJ, Matter No. 1214 of 1990, 30 June 1992) Postiglione v The Queen (1997) 189 CLR 295 R v Crombie [1999] NSWCCA 297 WorkCover Authority v Red Lea Chickens (No 2) [2001] NSWIRComm 40 WorkCover v TRW [2001] NSWIRComm 52 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (1999) 90 IR 464 HEARING DATES: 02/05/2003 DATE OF JUDGMENT: 03/21/2003

PROSECUTOR Mr R Reitano of counsel Solicitor: Mr G Henderson Phillips Fox LEGAL REPRESENTATIVES: DEFENDANTS Mr G M Galluzzo of counsel Solicitor: Mr P Cutrone Sparke Helmore

JUDGMENT: - 16 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Matter No IRC 379 of 2002 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR WILLIAM HOPKINS) v RED LEA CHICKENS PTY LIMITED

Prosecution under s 16(1) of the Occupational Health and Safety Act 1983

Matter No IRC 381 of 2002 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR WILLIAM HOPKINS) v MAGG TRANSPORT AND PACKING PTY LIMITED

Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2003] NSWIRComm 71

1 Valentin Petrov Stoev was employed by Magg Transport Pty Limited ("Magg") as a fitter/electrician at a maintenance workshop in Flushcombe Road, Blacktown. The owner of the workshop was Red Lea Chickens Pty Limited ("Red Lea"). The workshop had been converted from what was previously a poultry shed and was clad in corrugated iron, including the roof, except that a sheet of iron on the roof had been replaced with a sheet of corrugated fibreglass to allow in more light.

2 In order to keep the workshop cool a system of garden soaker hoses connected to a water supply had been installed on the roof in 1997. On 4 February 2000 Mr Stoev decided to go up onto the roof and unclog the soaker hose as he and other workers had done a number of times on previous occasions since 1997. Mr Stoev was on the roof for approximately ten minutes when he stepped on the fibreglass sheet and fell through to the floor. As a result of his fall, Mr Stoev sustained a fractured pelvis in two places, a dislocated right shoulder, an open wound to the left elbow and a broken right thumb.

3 Magg was prosecuted under s 15(1) of the Occupational Health and Safety Act 1983 in relation to the incident on 4 February 2000 and Red Lea was prosecuted under s 16(1) of the same Act. The prosecutor was William Hopkins, an inspector with the WorkCover Authority of New South Wales.

4 In relation to Magg, which was a wholly owned subsidiary of Red Lea, it was alleged in the amended application for order that it had failed to ensure the health and safety at work of its employees, in particular, Mr Stoev, were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at its place of work. The particulars of the alleged breach were that: 1. The Defendant failed to provide a system of work for the cleaning of a sprinkler system erected on the roof of the premises that was safe and without risks to health. 2. The Defendant failed to ensure that employees carrying out the cleaning of the sprinkler system were provided with adequate fall protection. 3. The Defendant failed to carry out any adequate risk assessment concerning the risks posed to employees working on the roof to clean the sprinkler system.

5 In relation to Red Lea it was alleged in the amended application for order that the defendant failed to ensure that persons not in its employment, in particular, Mr Stoev, were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at its place of work. The particulars of the alleged breach were that: 1. The Defendant failed to carry out any adequate risk assessment concerning the risks posed to persons working on the roof to clean the sprinkler system. 2. The Defendant failed to ensure that non-employees were provided with adequate information concerning the risks of working on the roof to clean the sprinkler system.

6 Both defendants pleaded guilty to the charges against them.

7 In relation to Magg an agreed statement of facts was tendered. The agreed statement indicated that: · The task of cleaning the sprinkler system did not fall within Mr Stoev's formal duties, nor had he been instructed to clean the sprinkler system by the management of the defendant. · Stoev was never instructed to clean the sprinkler system. · Stoev did not advise his supervisor, or other person in authority with the defendant, that he was to climb onto the roof on 4 February 2000 or other occasions. · Stoev had not been instructed to advise his supervisor, or other person in authority with the defendant, prior to climbing on the roof to clean the sprinkler system. · At the date of the accident the defendant had not conducted a risk assessment assessing the risks to persons carrying out cleaning of the sprinkler system on the roof of the premises. · The ceiling of the workshop had an incline. The lowest point of the ceiling was approximately 2.6 metres high and the highest point was approximately 3.6 metres. · Immediately following the accident the defendant instructed that no person was to access the roof and sprinkler system pending an investigation. · Since the accident the defendant has removed the soaker system from the roof of the workshop. · On a number of occasions previously Mr Stoev and other employees and contractors had unblocked holes in the soaker hose. · Stoev had not been provided with adequate fall protection and the defendant had failed to instruct employees carrying out this task to use any form of fall protection. · Stoev had not been adequately trained in safe working methods for the cleaning of the sprinkler system. · As a result of the defendant's failures Stoev suffered serious injuries. · The defendant had cooperated with the WorkCover Authority.

8 A similar agreed statement of facts was tendered in relation to Red Lea.

9 Statements of prior convictions indicated that Magg had one previous conviction under s 15(1) of the Act in 1996 and Red Lea had two previous convictions under s 15(1) and one previous conviction under s 27 of the Factory Shops and Industries Act 1962 over the period between 1991 and 2001. A bundle of six colour photographs of the incident scene was tendered.

10 The defendants tendered two affidavits, one by Peter Mark, Financial and Marketing Officer for Red Lea and the other by Paul Dunshea, Occupational Health and Safety Officer for Red Lea. Mr Mark's affidavit focussed on Red Lea's financial position, describing it as "poor" due to competition and the effect of the drought on grain prices. Mr Dunshea's affidavit: · described the defendants' operations; · Mr Stoev's return to work; · Action taken by the defendants following the accident; · Red Lea's occupational health and safety policies, Red Lea's expenditure on occupational health and safety, induction and training in occupational health and safety, enforcement of safe working procedures, Red Lea's safety committee, working at heights policy and procedure, reduction of injuries/claims; · Red Lea's cooperation with WorkCover and joint projects with WorkCover in relation to occupational health and safety.

11 The deponents were not required for cross examination. The Verdict

12 After reviewing the agreed facts and in light of the charges and the particulars thereof, I am satisfied that the offence has been proven. The pleas of guilty by the defendants were properly made and I enter verdicts accordingly.

13 These proceedings involve the prosecution of two related companies under the Occupational Health and Safety Act. The maximum penalty available in each case is $825,000. This is a large penalty reflecting the gravity of offences under ss 15(1) and 16(1) of the Act as perceived by the community: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P.

14 As Mr R Reitano, counsel for the prosecution correctly submitted, the starting point in any consideration of where the penalties should lie in respect of the two defendants on the scale of zero to $825,000 is the objective seriousness of the offence; this is the primary factor. Subjective factors that mitigate the seriousness of the offence must be secondary to consideration of the nature and quality of the offence: Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474; Fletcher Constructions Australia Limited v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 77.

15 Magg was the employer of the injured worker and Red Lea was the owner of the building where the worker suffered the injury. Whilst it was no part of Mr Stoev's duty to climb up onto the roof of the workshop to unclog the soaker hose it appears that from 1997 Mr Stoev undertook the task on at least three occasions and at least one other worker did also. The contractor who installed the sprinkler system had observed other persons on the roof unclogging the hose on approximately six occasions. The roof was on an incline and was between 2.6 and 3.6 metres off the ground. A sheet of corrugated fibreglass had replaced a sheet of corrugated iron on the roof. It beggars belief that neither defendant was aware of the practice of workers over a three year period climbing up on the workshop roof to unclog the hose, yet both failed to prevent what was obviously an unsafe practice or to take steps to ensure that the work of unclogging the hose was carried out safely.

16 Even if the defendants were unaware of the practice of workers climbing up onto the roof, they were aware that the sprinkler system had been installed. It was reasonably foreseeable that the system might become clogged over a period of time or otherwise inoperative and that workers might, on their own initiative, attempt to fix it by climbing onto the roof and, in that process, injure themselves. It was incumbent on the defendants, following the installation of the sprinkler system, to assess the risks posed to persons on the roof cleaning the sprinkler system and either prohibit workers going onto the roof or to ensure that if they did it was done safely and without risks to health. None of these measures were taken by the defendants.

17 Even if it could be said that Mr Stoev was foolish in climbing up onto the roof without proper safety equipment, I note what I said in WorkCover v TRW [2001] NSWIRComm 52 at pars [13] and [14]: 13 However, the duty to provide a risk free work environment is a duty owed not only to the careful and observant employee but also to the hasty, careless, inadvertent, inattentive, unreasonable or disobedient employee in respect of conduct that is reasonably foreseeable: Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313 at 320; McLean v Tedman (1984) 155 CLR 306 at 311 - 312. 14 I respectfully agree with the conclusions of the Full Bench in Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 [at 15] as follows: The magistrate appears to have reached her conclusion as to the objective seriousness of the offence, having regard to the lack of common sense of the injured worker. It is reasonably clear from her decision that it was concluded that the conduct of the injured worker effectively removed or minimised the liability of the respondent in relation to the lack of training or instruction afforded the employee. This was wrong in principle. Section 15 of the Occupational Health and Safety Act requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 at 257: "Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connections. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. The Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry." See also WorkCover Authority of NSW (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at 722. 18 The existence of simple and straightforward remedial steps which could have been taken by the defendants to avoid the accident are relevant to assessing the seriousness of the offence: see Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27. In this case a risk assessment would have revealed the risks to safety of a person climbing onto the roof without proper safety equipment and instruction.

19 In Hannah v Wonar Pty Limited (unreported, Fisher CJ, Glynn and Cullen JJ, Matter No. 1214 of 1990, 30 June 1992 at 9), 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.

20 Mr Stoev suffered serious injury but I do accept Mr Reitano's submission that Mr Stoev could easily have been killed in his fall from the roof.

21 As Mr G M Galluzzo of counsel for the defendants properly conceded, the offences were serious and I so find.

22 In relation to deterrence, the associated principles were discussed by a Full Bench of this Court in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; 99 IR 29 at pars [71] - [80]. I adopt that discussion for the purposes of determining sentence in this case. As to general deterrence, the important consideration is to set the penalty at a level that will realistically operate as a deterrent but not so high as to be oppressive. As to specific deterrence I note the defendants' failure to take any steps to identify the potential risk presented by falling of the roof. However, the defendants have taken steps to ensure the accident does not happen again and I note the new focus by Red Lea on occupational health and safety that was not apparent to me when the defendant was before this Court in WorkCover Authority v Red Lea Chickens (No 2) [2001] NSWIRComm 40. It seems to me that that Red Lea now takes its responsibilities for occupational health and safety seriously and has moved to significantly improve its systems and policies since 2001 both in respect of its own operations and those of its subsidiaries.

23 There are a number of subjective factors to be taken into account in sentencing. These factors are: 1. The defendants pleaded guilty at an early stage. 2. The defendants cooperated with the prosecutor in his investigations. 3. The defendants have taken steps to ameliorate the particular risks that gave rise to the charges in these matters. 4. The defendants are committed to a commendable ongoing program of occupational health and safety improvement. 5. The defendants have shown contrition and remorse.

24 Mr Galluzzo asked that the Court take into account the defendants' financial position. Section 6 of the Fines Act 1996 provides that: In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount.

25 In Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209 Wright J, President addressed the issue of a defendant's financial position: The financial position and more particularly the means of the defendant should be taken into account in relation to the question of penalty. Otherwise it is inappropriate to consider the fact or amount of legal costs, consulting and other fees. In any event, it was not submitted that I should. I should, as submitted by counsel for the informant, consider not only the financial information included in the correspondence from the accountants, but also the defendant's asset position. Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. The penalty imposed will reflect the consideration given to this aspect as discussed above. I have also had regard to the submissions filed by the informant in respect of the additional affidavit and issues arising from it. Further, I have considered and applied the authorities referred to therein, particularly Haynes v C I & D Pty Limited (No 2) at 457-458; R v Sgroi (1989) 40 A Crim R 197 and R v Rahme (1989) 43 A Crim R 81. Finally on this aspect, I indicate that I do not consider that the penalties imposed are beyond the means of the defendant.

26 Red Lea is a large corporation employing over 600 employees. Although its financial position measured by profit and loss was described as poor there was no indication at all that the defendants would not have the means to meet a fine commensurate with the seriousness of the offences. In this matter I have taken the same approach as Wright J in Ferguson v Nelmac.

27 Mr Galluzzo next drew my attention to the judgment of the Court of Criminal Appeal in R v Crombie [1999] NSWCCA 297. In that case, which involved an offence under the Drug Misuse and Trafficking Act, the Crown Prosecutor elected to proceed upon indictment in the District Court rather than to proceed summarily in the Local Court. In this respect the Court of Criminal Appeal observed: 7 The consequences of the decision to proceed under s 25 (1), rather than s 25A, and the election to proceed upon indictment in the District Court, rather than to proceed summarily in the Local Court, were matters of some practical significance. 8 The maximum penalty for an offence under s 25A is penal servitude for 20 years, or 2,500 penalty units, or both. An offence under this section can only be prosecuted on indictment. The maximum penalty for an offence under s 25 (1), if dealt with in the District Court upon indictment, is penal servitude for 15 years, or a fine of 2,000 penalty units, or both. However, if dealt with summarily in the Local Court, as is permissible if the quantity of drugs involved is not more than a "small quantity", (1 gram in the case of heroin), then the maximum available penalty is imprisonment for 2 years, or a fine of 50 penalty units, or both pursuant to s 30 (1) of the Drug Misuse and Trafficking Act.

28 The applicant was sentenced to a minimum term of two years and to an additional term of one and a half years. The appeal was pursued on the basis that the sentence was manifestly excessive. It was submitted for the applicant that although the District Court had jurisdiction to deal with the matter upon indictment, the case was one which, being suitable for summary disposition, resulted in a sentence which failed to take into account that circumstance. As the sentencing order was framed, the sentence imposed was close to double the maximum available in the Local Court, while the minimum term equated to the maximum fixed term that could be imposed in that court.

29 In giving the Court's judgment Wood CJ at CL said:

15 This Court has acknowledged that the fact that a matter could have been dealt with in the Local Court, had the prosecuting authority not elected otherwise, remains a relevant consideration in the exercise of the discretion reserved to the sentencing judge, see Dalton-Morgan , Court of Criminal Appeal 14 December 1989, Jason Clyde Smith , Court of Criminal Appeal 11 September 1991, and Shepherd (1991) New South Wales Court of Criminal Appeal 162.

16 None of those decisions go so far as to require the sentencing judge to proceed upon the basis that the maximum available sentence is that which could have been imposed in the Local Court. At most they establish that the circumstance identified is to be taken into account. Depending upon the objective and subjective criminality of the offender, it may properly be regarded as calling for some mitigation of the sentence that would otherwise be imposed in the District Court for an offence prosecuted upon indictment. Moreover, where it appears that in the circumstance has been entirely overlooked by the sentencing judge, it may properly justify the granting of leave to appeal..

30 Mr Galluzzo submitted that the offences could have been dealt with in the Chief Industrial Magistrate's Court where the maximum penalty for each of the offences is $55,000 and that on the authority of R v Crombie the Court should take this into account.

31 It is, of course, a matter for the prosecutor to decide in which Court he or she intends to pursue the prosecution for an offence under the Occupational Health and Safety Act. Mr Galluzzo contended that the offences in these proceedings could have been dealt with in a lower court but it seems to me that given the fact that the offences committed by the defendants were subsequent offences within the meaning of s 51A and by the defendants' own admissions were serious offences, there is no basis for mitigation of the sentence on the ground that the offences could have otherwise been prosecuted in the local court.

32 Mr Galluzzo submitted that given the defendants were related companies and the offences involved a common factual matrix, the Court should apply the totality principle. As McHugh J described it in Postiglione v The Queen (1997) 189 CLR 295 at 307, the principle of totality 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".

33 In WorkCover Authority of New South Wales (Inspector Robinson) v Bosnjak Holdings Pty Limited and anor [2002] NSWIRComm 295 Staunton J considered the question of whether the principle of totality should apply in circumstances where two related companies (one company was the wholly owned subsidiary of the other) had been convicted of offences under s 15(1) and s 16(1) of the Act respectively. After reviewing the relevant authorities her Honour said at pars [35], [38] and [42]: 35 On a totality approach, the situation prevailing here is even more definitive when one has regard to the particulars of the offences as pleaded with respect to the two defendants. As can be quickly surmised by a perusal of them, they are pleaded in essentially similar terms. The first defendant's particulars are pleaded on the basis that it failed to ensure certain things in respect of its employees whereas the second defendant's failures are particularised as a failure to provide the same things to persons not being its employees . Indeed, the only distinguishing particular as between the two defendants is in relation to particular [e] concerning the second defendant in that, having the offence of 'failing to provide' particularised, sub paragraph [e] details a particular of 'failing to maintain' the specific particular - again in exactly similar terms to particulars pleaded in relation to both defendants. … 38 For the above reasons, and consistent with approaches earlier adopted by this Court that I have referred to, I consider it appropriate that I adopt the "common sense" approach and apply one penalty to the matters before me. … 42 In any event, in the matters before me, the pleas of guilty entered to the offences were pleaded on what I would describe as a 'like for like' basis. I have already commented on the common particulars as pleaded by the prosecution and the pleas of guilty entered by each defendant in relation to those offences on the basis of those particulars. It seems to me eminently sensible to find that, in entering the respective pleas to the offences as particularised, the defendants accepted a common culpability. I can see no significant differentiating circumstances such as to suggest that their degrees of culpability should be anything other than equally apportioned. Accordingly, the penalty that I impose will be equally apportioned between them.

34 In Inspector Brian Dell v Baradine Sawmilling Co. Pty Ltd. Inspector Brian Dell v Gunnedah Timbers Pty Ltd. [2002] NSWIRComm 304 Haylen J dealt with a situation where the two defendant companies had "close family links". At par [81] his Honour said: Recently, Staunton J has given consideration to a similar situation ( WorkCover Authority of New South Wales (Inspector Robinson) v Bosnjak Holdings Pty Ltd and anor [2002] NSWIRComm 295). Her Honour referred to the judgment in Haynes but noted the technical difficulty of applying the principles of totality and parity. Her Honour cited earlier authority for the proposition that where offences under s 15 and s 16 of the Act effectively arise from one incident involving the same successive failures, it was appropriate to impose a single penalty. Her Honour concluded that, in the circumstances of the case before her, she would adopt the "commonsense" approach and apply one penalty (see para [37]). The prosecutor submitted that such a discretion was open to the Court in these matters. In the circumstances disclosed in this case, I think it is appropriate to adopt the approach of setting an overall penalty and dividing it equally between the two defendants.

35 The circumstances before me are very similar to the situation that applied in Bosnjak Holdings. Accordingly, I intend to follow the course adopted by her Honour and set an overall penalty divided equally between the two defendants.

36 Having regard to the objective seriousness of the offences, I consider an appropriate penalty to be $120,000 with a discount for the early plea of 25 per cent and a further 10 per cent for other subjective factors. This results in an amount of $78,000 and a fine of $39,000 for each defendant.

37 The Court makes the following orders: Matter No 379 of 2002 - Red Lea Chickens 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 $39,000 with a moiety thereof to the prosecutor. 4) The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. Matter No 381 of 2002 - Magg Transport

The offence is proven and a verdict of guilty is entered.

The defendant is convicted of the offence as charged.

The defendant is fined an amount of $39,000 with a moiety thereof to the prosecutor.

The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs.

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