May v Brooker Marine Products Pty Limited [2001] NSWIRComm 101 (22 May 2001)

Last Updated: 12 June 2001

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : May v Brooker Marine Products Pty Limited [2001] NSWIRComm 101

FILE NUMBER(S): IRC 1407, IRC 1408, IRC 1410

HEARING DATE(S): 19/10/2000, 03/11/2000

DECISION DATE: 22/05/2001

PARTIES:

PROSECUTOR

Inspector Louise May

DEFENDANT

Brooker Marine Products Pty Limited

JUDGMENT OF: Wright J President

LEGAL REPRESENTATIVES

PROSECUTOR

Mr P M Skinner of counsel

Moray & Agnew, Solictors.

DEFENDANT

Mr D B O'Neill of counsel

B C Harris & Co, Solicitors.

CASES CITED: Callaghan v Saunders Constructions Pty Limited (unreported, 26 November 1993)

Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610

Department of Mineral Resources (NSW) (McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8

Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (1999) 90 IR 464

McConnell Dowell Constructors (Aust) Pty Ltd v Environment Protection Authority [2000] NSWCCA 367

Mill v The Queen (1988) 166 CLR 59

Pearce v The Queen (1999) 194 CLR 610

R v Winchester (1992) 58 A Crim R 345

WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248

WorkCover Authority of New South (Inspector Mulder) v Yass Shire Council (2000) 99 IR 284

WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163

WorkCover Authority of New South Wales (Inspector Sheppard) v The State Rail Authority of New South Wales [2000] NSWIRComm 179

LEGISLATION CITED: Occupational Health and Safety Act 1983 s 15(1) s 16(1)

Dangerous Goods Act 1975 s 9(1)(a)

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

CORAM: WRIGHT J, President

Tuesday 22 May 2001

Matter No IRC 1407 of 2000

INSPECTOR LOUISE MAY v BROOKER MARINE PRODUCTS PTY LIMITED

Prosecution under s 9(1)(a) of the Dangerous Goods Act 1975

Matter No IRC 1408 of 2000

INSPECTOR LOUISE MAY v BROOKER MARINE PRODUCTS PTY LIMITED

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

Matter No. IRC 1410 of 2000

INSPECTOR LOUISE MAY v BROOKER MARINE PRODUCTS PTY LIMITED

Prosecution under s 15(1) of the Occupational Health and Safety Act 1983

JUDGMENT

[2001] NSWIRComm 101

1    The defendant, Brooker Marine Products Pty Limited, has pleaded guilty to charges brought by Louise May, an inspector of the WorkCover Authority of New South Wales, under s 15(1) and s 16(1) of the Occupational Health and Safety Act 1983. The prosecutor is authorised by s 48 of that statute to institute the proceedings. The defendant was also charged with a breach of s 9(1)(a) of the Dangerous Goods Act 1975. Reference will be made to that charge subsequently. The defendant is an employer and its business undertaking is the manufacture of aluminium boats and boat trailers and general fabrication work incidental to such manufacture. Sections 15(1) and 16(1) of the Occupational Health and Safety Act respectively provide:

15(1) Every employer shall ensure the health, safety and welfare at work of all the employer's employees.

16(1) Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work.

2    The offence with which the defendant is charged in Matter No IRC 1410 of 2000 is that the defendant:

On 1 April 1998 at the defendant's boat manufacturing factory premises at 188 Silverwater Road, Silverwater in the state of New South Wales, the defendant being an employer did fail to ensure the health, safety and welfare at work of all its employees and in particular, Benjamin Robert Shepherd, contrary to section 15(1) of the Occupational Health & Safety Act, 1983 in that it:

a) failed to provide and/or maintain systems for the storage of flammable substances that were safe and without risks to health.

b) failed to provide such instruction, training, information and supervision in relation to the dangers associated with smoking in the workplace in proximity to flammable substances as may be necessary to ensure the health and safety of its said employee at work.

c) failed to maintain a place of work under its control, to wit, the paint room and the adjacent areas thereto, where paint and flammable substances were stored in a condition that was safe and without risks to health.

3    The offence with which the defendant is charged in Matter No IRC 1408 of 2000 is that:

On 1 April 1998 at the defendant's boat manufacturing factory premises at 188 Silverwater Road, Silverwater in the state of New South Wales, the defendant being an employer failed to ensure contrary to section 16(1) of the Occupational Health and Safety Act, 1983 that persons not in its employment, and in particular Anthony Richard Gilbert, were not exposed to risks to their health or safety arising from the conduct of the defendant's undertaking at its aforesaid place of work.

The particulars of the charges are substantially set out in the agreed Statement of Facts, referred to subsequently in paragraph 9.

4    Mr P M Skinner of counsel appeared for the prosecutor in the proceedings. Mr D B O'Neil of counsel appeared for the defendant.

Withdrawal of charge under the Dangerous Goods Act 1975

5    During the hearing of the plea, the prosecution sought to withdraw the charge in Matter No IRC 1407 of 2000 laid pursuant to s 9(1)(a) of the Dangerous Goods Act. This occurred after the Court raised with counsel for the prosecutor whether the prosecutor was authorised pursuant to s 33 of that statute to bring the proceedings, it appearing from the statement of agreed facts and the relevant initiating process that the prosecutor relied upon her authorisation under the Occupational Health and Safety Act to bring the subject proceedings. This led, after an adjournment being granted to the prosecution, to an application to withdraw the proceeding.

6    In the circumstances, which included the lateness of the application and the appropriateness of continuing to deal with the matters which were to continue, the Court directed that any such application should be made by notice of motion supported by either an affidavit or written submissions. In the event, the prosecution filed an appropriately supported motion seeking leave to discontinue the proceedings. In the light of the decision reached in this matter, it is unnecessary to refer to all of the bases upon which the application was made. It is sufficient that the Court concludes that the application is made in the bona fide exercise of prosecutorial discretion and that it is therefore appropriate for the Court to grant the application: cf Pearce v The Queen (1999) 194 CLR 610 at 620 - 621; McConnell Dowell Constructors (Aust) Pty Ltd v Environment Protection Authority [2000] NSWCCA 367 at [24] - [25].

7    As to the costs of these proceedings, the prosecutor submitted that no separate costs order should be made in relation to them since the defendant was in effect required to deal with the two charges under the Occupational Health and Safety Act and no, or alternatively insignificant, additional costs were incurred by the defendant in having to deal with the charge under the Dangerous Goods Act. The defendant submitted that a minor adjustment should be made in relation to the overall costs but accepted that it was open to the Court not to differentiate in relation to costs because the substance of the proceedings dealt with the proceedings under the Occupational Health and Safety Act.

8    The Court grants the prosecution's application to withdraw this charge. As to costs, the appropriate conclusion is that no additional costs were incurred by the defendant as a result of the pursuit of the additional charge now withdrawn and the only adjustments should relate to the costs of the commencement of the proceedings under the Dangerous Goods Act and of the motion to discontinue that matter. The costs order will reflect that conclusion.

Factual Background

9    An agreed Statement of Facts relevantly in the following terms (omitting annexures) was tendered by the prosecutor:

4. At all material times, and in particular on 1 April 1998, the defendant was conducting its said undertaking from its factory premises at 188 Silverwater Road, Silverwater in the state of New South Wales ("the factory premises"). The defendant had been occupying those premises since March 1997.

5. On 1 April 1998 the defendant's aforesaid factory premises was not a licensed premises pursuant to the Dangerous Goods Act, 1975 No 68.

6. The defendant was at all material times an employer.

7. At all material times the defendant employed Benjamin Robert Shepherd ("the worker") as a second class welder/general hand.

8. At all material times Anthony Richard Gilbert ("the contractor") was an employee of Anthony Gilbert Restorations Pty Limited and was carrying out work as a painter/detailer at the defendant's premises.

9. Situated midway along the wall leading to the back north west corner of the factory premises was a room known as the paint store which was an area in which were stored quantities of paints, thinners, Croda Wax and Grease Remover S310 and various tools used in the defendant's business undertaking.

10. In the area immediately outside the paint room door the following items were stored:

* a 200 litre drum of Croda 265 Lacquer Thinner on top of other drums of Croda 265 Lacquer Thinner;

* quantities of Croda 87 Allsol Wax and Grease Remover;

* two pallets of plywood;

* a bag of rags on the ground;

* used rags on the ground;

* drums of paint, some empty and some full.

11. The paint room measured approximately 2 metres wide and 3 metres deep and had a door and a window opening into the factory area but no ventilation to the outside area. The door and window of the paint room were not situated opposite one another to facilitate cross-ventilation. Approximately 10 metres to the north-east of the paint room were two roller doors each 8.5 metres wide and 6.5 metres high which at the material time on 1 April 1998 were open and were kept open at all times when the defendant's factory was open for business. The roller doors provided access directly from the factory building to a large outside yard area. There was a third such roller door more remote from the paint room.

12. The door to the paint room had a sign affixed to it which indicated the words "No Smoking". There was a similar sign on the wall inside the factory building near the paint room and another one on the outside of the building situated between the roller doors referred to in paragraph 11 above. The sign on the outside of the building however was damaged in that it was ripped in half and part of the sign was missing as indicated in photograph number 4 which photograph is one of the annexures to this Agreed Statement.

13. At all material times on 1 April 1998 the worker was assisting the contractor to prepare an aluminium dinghy for painting in the boat finishing area of the factory premises. He required a drill so he went to the paint room where a drill was stored. At the time he went to the paint room the contractor was inside the paint room mixing paint.

14. At the material time on 1 April 1998 that the worker arrived at the paint room he was holding a lighted cigarette in his hand and he threw it on the floor just inside the door of the paint room and attempted to stamp it out.

15. At all material times the area outside the paint room door was an area used sometimes for decanting thinners from a 200 litre drum and on 1 April 1998 there was no spillage tray provided under the 200 litre drum. There had previously been a spillage tray provided but it had been removed by persons unknown.

16. At all material times in the absence of the spillage tray referred to in 15 above the spillages of thinners collected at a low point near to the entrance to the paint room door.

17. The worker attempted to extinguish the flame which had caught on his boot by stamping it with his foot. The fire kept re-igniting and he moved out of the paint room into the area immediately in front of the entrance which was the low point in the floor where spillages of thinners collected and at this point the flame from the worker's boot started a fire outside the paint room door. The worker was attempting to remove his burning boot when an explosion occurred and fire engulfed him.

18. The worker sustained burns to his legs and arms as well as a laceration to his left leg and was unable to resume his normal work for a period in excess of 7 days.

19. The ensuing fire caused extensive damage to the western end of the factory premises and the Fire Brigade was called to attend in order to assist in extinguishing it.

20. The contractor also attempted to extinguish the fire and was exposed to risk of injury.

21. The defendant failed to provide and/or maintain systems for the storage of flammable substances that were safe in that:

* it did not enforce a total ban on smoking within the factory premises and the paint room;

* it did not ensure that the paint room was properly ventilated having regard to the tasks which were performed within it;

* it failed to ensure that electrical equipment was not used in and around the paint room because of the hazardous atmosphere created by vapours emanating from the substances stored therein.

22. The defendant failed to ensure that persons not in its employment were not exposed to risk from its business undertaking described above in that:

* it did not enforce a total ban on smoking within the factory premises and the paint room;

* it did not ensure that the paint room was properly ventilated having regard to the tasks which were performed within it;

* it failed to ensure that electrical equipment was not used in and around the paint room because of the hazardous atmosphere created by vapours emanating from the substances stored therein.

23. Copies of material safety data sheets for the following substances are attached:

* Croda 265 Lacquer Thinner

* Croda 87 Allsol Wax and Grease Remover.

24. The material safety data sheet for Croda 265 Lacquer Thinner cautions, inter alia, that its vapour is heavier than air, highly flammable and that it should be used in a well-ventilated area. It further cautions that a severe explosion hazard is created by the vapour when it is exposed to flame or spark and that the vapour may travel a considerable distance to a source of ignition.

25. The material safety data sheet for Croda 87 Allsol Wax and Grease Remover states, inter alia, that it had a moderate explosion hazard when exposed to heat or flame.

26. The Thinner and the wax and grease remover which were stored on the defendant's premises were flammable substances and had flammable ratings as high as Class 3 and all such substances were dangerous goods within the meaning of the Dangerous Goods Act, 1975 No 68.

27. The quantities of dangerous goods stored on the defendant's premises at all material times were such as were sufficient to invoke section 9(1)(a) of the Dangerous Goods Act, 1975 requiring the licensing with respect to the storing of such dangerous goods. The defendant's managing director, Mr David Christie ("Christie") was not aware that such a licence was required.

28. Attached are a series of nineteen photographs illustrating the defendant's premises shortly after the fire.

29. At all material times there were five fire extinguishers within the factory premises, three of which were near to the paint room.

30. Colin George Whicker ("Whicker") is a workplace assessor and WorkCover accredited trainer carrying on business under the name "Workplace Safety Management". From 10 February 1998 Christie had been consulting with him with a view to putting in place a safety management program for the defendant and on the said 1 April 1998 Whicker was present in Christie's office at the factory premises for the purpose of finalising this program and was present when the fire occurred.

31. Since 1 April 1998 the following measures have been taken and work carried out at the factory premises, namely:

* dangerous goods within the meaning of the Dangerous Goods Act, 1975 are now kept only in sufficient quantities such that a licence is not required and are kept in a new ventilated shed in the yard (rather than in the old paint room);

* The old paint room is no longer used for its previous purpose and a new door has been installed leading directly to the outside of the building;

* a new spray booth has been constructed especially for spraying boats in the yard outside the main building;

* new electrical wiring has been provided in the building;

* new emergency lighting has been installed there;

* fire fighting hose reels have been installed;

* "Exit" signs installed;

* there are now eleven fire extinguishers;

* yellow lines have been painted on the floor of the factory premises indicating routes to exit building;

* a safety committee has been formed;

* brochures have been provided to employees in relation to safety measures;

* there is now a total ban on smoking anywhere within the factory premises and employees who wish to smoke are required to leave the premises and the yard and go into the car park or footpath adjacent to the factory premises.

32. Attached is a series of photographs numbered 1 to 19 illustrating the defendant's premises on the day of the fire, 1 April 1998.

33. Material Safety Data Sheets are attached for the following products;

(i) Croda 87 Allsol Wax & Grease Remover

(ii) Croda 265 Lacquer Thinner

34. Factual Inspection Reports in relation to the premises were carried out by the former Workcover Inspector Emma Wittgens on 1st and 3rd April 1998 and copies of these reports are attached.

The prosecutor accepted that the defendant had no prior convictions under the Occupational Health and Safety Act or related legislation.

10    Counsel for the defendant relied on evidence in the form of statements from David Francis Christie, Henry Hatze and Colin George Whicker as background to the defendant's plea.

11    Mr Christie is the Managing Director of the defendant which has an annual turnover of approximately $8 million. The defendant has eight permanent employees and engages approximately 29 sub-contractors who are provided by labour hire companies (in light of the terms of paragraph 8 of the agreed facts, it is assumed that this term is used in a very broad sense). He sets out in some detail his prior experience from 1981 and says that neither he nor any of the companies with which he has been associated have had a conviction for a work safety offence. The premises at Silverwater have been occupied by the defendant since March 1997. After referring to the way in which various inflammable materials were kept at the defendant's premises (in a manner consistent with that set out in the Statement of Facts) he says that he was not aware that a licence under the Dangerous Goods Act was required to keep more than 100 litres of flammable liquids and that during the course of his business career he had many discussions with representatives of paint manufacturers and insurers but had never been advised of this fact.

12    He also indicated that the factory did not have a "no smoking" policy for the whole of the factory but did have a policy for the area which was called the "boat finishing area". He indicated that whenever a new employee was employed (and by this I assume he includes reference to independent contractors), he deposes that he advised such persons of the "no smoking" rule and also instructed his work manager, Mr Hatze, to advise all employees accordingly. In particular he says that he told the employee involved in the accident, Mr Shepherd, when he commenced employment that smoking was banned in the boat finishing area.

13    As to the layout of the factory he puts in issue a statement by Mr Shepherd made for the purpose of the proceedings that the area outside the paint room was a "mess". He deposes that there was only a narrow entrance to the main part of the factory because of the presence of boat trailers situated there. As to this situation he says that this was a deliberate policy intended to stop workers unnecessarily entering the boat finishing area. Further, that because of the three large roller doors this policy did not create difficulties in persons leaving the factory building in the event of an emergency.

14    He also refers in some detail to the decision he made early in 1998 to arrange a formal safety training program for employees and to the meetings he arranged with Mr Colin Whicker who had been recommended to him as a workplace safety expert. There were two meetings with Mr Whicker prior to 1 April 1998.

15    As to the incident on 1 April 1998 he said that when he and Mr Whicker heard the explosion and ran out into the yard adjacent to the factory and saw Mr Shepherd "running around" Mr Whicker and Mr Christie went to Mr Shepherd's assistance and Mr Shepherd was heard to say "I am sorry. I was stupid" or words to that effect. He also says that when he and Mr Whicker visited Mr Shepherd at Westmead Hospital on the evening of the incident he recalls Mr Shepherd saying words to the effect "I am sorry. I was stupid. It was my fault".

16    He also details the measures taken and the work carried out at the factory since the date of the accident (see paragraph 31 of the Statement of Facts) and deposes that the costs to the defendant of carrying out these improvements was approximately $48,000.

17    Mr Hatze's evidence was limited to the circumstances of the employment of Mr Shepherd and the situation as to smoking in the work place. For example, he indicates that when Shepherd was employed Mr Hatze told him "smoking is not permitted in the finishing bays" and that on two subsequent occasions Shepherd was found smoking there and was reprimanded by Mr Hatze on each occasion. Further, that he (Mr Hatze) at no time smoked in that area. He always carried his own cigarette lighter and therefore did not need to and did not in fact use the lighter kept in the paint room. Finally, that he spoke to Shepherd in the factory yard immediately after the accident and in substance corroborates the evidence of Mr Christie as to what was said at the time.

18    Mr Whicker's evidence deals with the course of dealing with the defendant, including the meetings with Mr Christie prior to 1 April 1998. He also corroborates Mr Christie's evidence as to the statements made by the injured worker after the explosion. An important part of his evidence is his attendance at a meeting with the management of the defendant and a number of the defendant's employees on 16 April 1998 and on a subsequent occasion at a local RSL Club. He states that on each occasion he addressed the meeting at length, took the workers through the accredited safety induction program (which took a number of hours) and lectured them on the regulations under the Occupational Health and Safety Act with reference to their own responsibilities and the significance of various hazards. He also set out in detail his recommendations to the defendant as to improvements in safety and the knowledge of workers at the defendant's premises as to safety procedures and requirements. He concludes by stating that arrangements have been made with the defendant to carry out annual reviews of the safety situation at its premises and to advise as to how safety matters should be dealt with.

Prosecution submissions

19    Counsel for the prosecutor emphasised in his submissions that the primary factor to be considered when determining the appropriate sentence is the objective seriousness of the offence charged. This proposition has been referred to in prosecutions under the Occupational Health and Safety Act as the "true measure of penalty lies in the nature and quality of the offence": Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474 - 475. In that respect, it was submitted that the offences were substantial offences. The defendant's premises constituted a dangerous workplace and the lack of proper systems resulted in a very dangerous situation. There was not a great deal that could be said in the defendant's favour as to the objective circumstances of the offence. Such matters as the defendant might rely on in mitigation of the penalty would largely be limited to subjective considerations.

20    The objective circumstances relied upon by the prosecutor included the considerations referred to in paragraphs 21 and 22 of the agreed facts as to, respectively, the s 15 and s 16 offences. Although the first of these matters (the failure to enforce a total ban on smoking within the factory premises and paint room) was the matter which related particularly to the accident which occurred on the relevant date, the three failures were such that any single one of them could have led to a serious accident. It was submitted that this is demonstrated by consideration of the other circumstances in existence at the time. These circumstances included the systems failure illustrated in paragraphs 15 and 16 of the agreed facts. The failure to keep a spillage tray in place under the 200 litre drum led to spillages of thinners collecting at a point near the entrance to the paint room door. The failures were also to be considered in the context of the material before the Court as to the dangerous inflammable nature of the materials stored at the premises, details of which were set out extensively in the Material Safety Data Sheets referred to in paragraph 33 of the agreed facts and summarised in paragraphs 23 to 26 of the same document. The substances referred to included substances which were, or had the potential to be, highly explosive. Further, the relevant data sheets required that spillages were to be cleaned up immediately and deposited in appropriate flammable waste containers. That did not occur at the subject premises and was a factor in the accident which occurred.

21    As to the nature of the defendant, although it was a small business it was not "a tiny business". It had turnover of approximately $8 million per annum and at the relevant time there were eight permanent employees and 29 independent or sub-contractors on site. Because of the products made at the premises, it was necessary to store and handle hazardous chemicals. It was submitted that, on any view of the situation, the premises should have been a strict non-smoking factory. The only evidence of a system preventing workers smoking were the signs and the evidence as to the supposed "non-smoking rule". If the evidence is accepted, it did not amount to an adequate system in place to prevent smoking near the flammable substances on site. Further, the defendant had been operating at the Silverwater site for over a year when the incident occurred and it had not yet established a safe workplace. Another important objective consideration was that the maximum penalty for each offence was $550,000.

22    As to available subjective considerations, the prosecutor conceded that the defendant had entered an early plea and had co-operated with the prosecution. The defendant was entitled to a discount for those matters. Reference was made to the consideration in the judgment in WorkCover Authority of New South Wales (Inspector Sheppard) v The State Rail Authority of New South Wales [2000] NSWIRComm 179 including that as to the guideline judgment of the Court of Criminal Appeal in R v Thomson; R v Houlton (2000) 49 NSWLR 383. The utilitarian considerations involved in providing a discount for an early plea were emphasised as was the consideration that the WorkCover Authority, the major prosecutor in the jurisdiction, would not wish to be seen as discouraging early pleas of guilt. It was conceded that the defendant could also rely on the absence of earlier convictions.

23    Finally, the principle of totality applied and distinct offences had been committed in that both employees and non-employees were at risk as access by both categories of persons to the particularly dangerous paint room area appeared to be equal. There was therefore no distinction to be drawn between the respective seriousness of the offences. In particular, in terms of the considerations of proportionality, the offences should be seen as being of equal significance. It was accepted that the Court would adopt the approach laid down by the High Court in Pearce v The Queen and that courts must be vigilant to ensure that a penalty is not imposed twice for factors which are relevant to both offences.

Submissions for the defendant

24    Counsel for the defendant conceded that the "the ultimate requirement of the legislation is that employers be pro-active rather than reactive [and] the defendant cannot shrink from that" However, an important consideration was the evidence as to the approach or attitude of the defendant which, even before the day of the accident was taking steps towards ensuring that there was a safe workplace.

25    As to the objective circumstances of the offences, it was submitted that this was a situation where the defendant became responsible for the reckless actions of the injured worker because it had not done enough in terms of education of employees and was not doing enough to enforce its limited non-smoking policy. It was accepted, however, that the employee would not have been injured if the defendant company had complied with the requirements of the Statute. Its acceptance of its breaches was implicit in the plea but in assessing the objective seriousness of the offence it must be accepted that the employee in question was acting contrary to the defendant's policies as to non-smoking areas and clear signage in those areas. Further, the accident occurred in circumstances where the employee attempted to extinguish the cigarette butt in the paint room area, an area which was clearly signed as non-smoking and the subject of the company's policy. This had to be seen in the context of the defendant's non-smoking policy in the paint room area and that it would have been self evident to any person working at the site that it was dangerous to smoke in that area. It was also pertinent that the element of the offence relating to the failure to have the paint room area properly ventilated and the element relating to electrical equipment did not cause the accident. Further, although the defendant did not resile from its acceptance that there should have been better cross-ventilation in the paint room area, nevertheless there was relatively reasonable means of egress from that area in situations of accident or the like.

26    As to subjective considerations, the defendant also relied on the judgment in the State Rail Authority case and emphasised that the plea was entered at the earliest possible opportunity. In the light of that consideration, and the other relevant factors, the reduction of one third which occurred in the State Rail Authority case should be considered so that at least that level of reduction would be granted in these proceedings. It was also submitted the evidence showed that the defendant, and its managing director, had demonstrated real and appropriate concern for all employees. This was shown not only by the steps taken to remedy the safety deficiencies on site immediately after the accident but also by the steps taken prior to the accident. Concern was also manifested in the visits by senior company personnel to the injured employee in hospital immediately after the accident and the fact that he returned to work with the defendant and continued in its employ for some period before he decided to leave employment on his own initiative and he was provided with a reference by the defendant.

27    Emphasis was placed on the commissioning by the defendant of an expert to assist with rectification of the defects in safety and that this engagement had occurred well before the date of the accident. Reliance was also placed on the amount spent on rectification which was in the order of $50,000 and the Court was asked to accept that the actual costs to the defendant would have well exceeded that amount because of the indirect costs involved additional to the expenditure on external sources of assistance. This was not a situation of a defendant which could be said to have taken no steps at all in relation to relevant issues of safety. Rather it was a situation where the company had not gone far enough by the relevant time and more advanced steps or better steps were in train and about to be undertaken to remedy risks to safety.

28    The defendant relied on the adoption by the defendant of the recommendations of the expert it had engaged (Mr Whicker) and his evidence that the defendant had implemented measures beyond those recommended. These included the issue of brochures and other detailed documentation to employees and contractors as to safety matters including the responsibilities for safety of not only the employer but also the responsibilities of employees and contractors. It was emphasised that the company's ability to attend to those matters was facilitated because there were already in train steps to receive and act on the advice from an expert in the area. This was important, it was submitted, because the improvements in safety which were of benefit to the employees occurred more expeditiously and there was a more prompt adherence to requirements because of what had been put in train.

29    It was also said to be relevant that the managing director of the company was not aware of some of the safety requirements such as that relating to registration under the Dangerous Goods Act when quantities of certain substances were held in excess of the relevant defined limits. This had occurred notwithstanding his experience in the industry and in circumstances where the relevant regulations had not been drawn to his attention by representatives of suppliers who had attended the premises. Mr Christie had not only reduced the relevant quantities of dangerous goods kept on the premises but he has made it his business to advise everyone he deals with in the industries of boat building and general engineering of their obligations. It was submitted that this demonstrated the defendant's approach to and concern about safety.

30    Reliance was placed on the fact that the defendant had no prior convictions. It was submitted that this was to be seen as an important consideration particularly as the managing director had not been involved in any earlier prosecution proceedings notwithstanding his long experience in the industry. In all the circumstances, the Court should find that the co-operation of the defendant was at the highest level and that there were very powerful subjective factors which should operate its favour. As to its financial situation, it was accepted that the nature of the business had been fairly put by the prosecutor. It was a small company as exemplified by its size and turnover. The subjective factors, it was submitted, militated strongly towards placing the offences, and thus the penalty, towards the bottom end of the range, although it was to be acknowledged that the maximum penalties were extremely high, any penalties imposed should be at the lower end of those available.

Consideration and conclusions

31    There was no issue between the parties as to the principles to be applied as to sentencing for offences under the Occupational Health and Safety Act which are now well settled: see, for example, Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales at 472 - 476 and WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163 at [21] - [27]. It is necessary, for example, to have regard to the maximum penalty for these offences of $550,000 and the need to give effect to the intention of the legislature that the previous sentencing patterns are to move in a sharply upward manner because of the various significant increases in penalties under the statute. I will approach this matter in accordance with those principles which are now modified in some respects by the guideline judgment in R v Thomson; R v Houlton which, as the parties observed, was considered in the judgment of this Court in WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales.

32    The plea of guilty in these matters should be seen as resulting from, inter alia, "a recognition of the inevitable": R v Winchester (1992) 58 A Crim R 345 at 350. However, that consideration is of much less importance in the light of the guideline judgment and the emphasis there on the ultitarian value of an early plea so that the primary consideration in determining where in the range of discounts a particular case should fall is the timing of the plea. I consider that this is a case where, in terms of the consideration in paragraph [160] of the guideline judgment, it is appropriate to deal with the matter by a single combined quantification of relevant factors.

33    As to the objective seriousness of the offences, the only conclusion available is that they were of significant gravity. At the time relevant to the charges, the defendant's premises were a very dangerous place to work. This is demonstrated by the nature and quantity of dangerous goods kept at the premises and the way in which they were kept (see paragraphs 9, 10, 11, 15 and 16 of the agreed facts); the characteristics of those substances (paragraphs 23 to 27); the steps taken since the time when the offences occurred in order to rectify or remedy the risks to safety manifested at the time (paragraph 31); and the breaches of elementary safety requirements which the defendant has admitted (paragraphs 21 and 22). It is difficult to comprehend how, in 1998, any employer could consider its safety obligations were being observed by permitting smoking in the workplace. But to do so in an industrial or factory environment and particularly in premises of the kind used by the defendant represented an abdication of its responsibilities under the Occupational Health and Safety Act and the general law both to its employees and any other person who might attend or work at the site.

34    Accepting, as the Court must, in the light of the only evidence tendered on the issue, that there was a non-smoking policy as to the paint room area and that instructions and admonitions were given to employees (and apparently to other persons working on site) in this regard, it was a policy which, as now admitted by the defendant, was not adequately enforced. Indeed, the evidence as to the role of the injured employee and his failure to heed the warnings or instructions to him is not of great value to the defendant in diminishing the objective seriousness of the offence. The significance of that evidence is to show the artificiality of a policy which purported to preclude smoking in one particular area, and to allow smoking otherwise. The evidence demonstrates that, as a matter of practice, the defendant did not have an effective policy as to smoking in the more dangerous areas of the premises and failed to have an appropriate policy as to smoking generally.

35    As Maidment J observed in Callaghan v Saunders Constructions Pty Limited (unreported, CT93/1062, 26 November 1993 at p. 7):

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.

See also the judgment of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 at 257.

36    The consideration thus far deals essentially with those matters which led to the accident and injuries to the injured worker exemplified by, for example, the facts set out in paragraphs 14 to 20 and the first item in each of paragraphs 21 and 22 of the agreed facts. The injuries suffered at the time, together with the extensive fire damage to part of the premises, and the exposure to risks of injury to the contractor in attempting to extinguish the fire themselves provide insight into the seriousness of the offences. As was observed in Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [94]:

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 the 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.

37    However, the nature, extent and seriousness of the injuries and damage which occurred gives only an insight into the gravity of the offence. The situation is analogous to that described in Capral Aluminium at [95] where the relevant risk was said not to be exemplified by the limited nature of the injuries suffered which understated the seriousness of a breach of the Act. The gravity of the offences in these proceedings was significantly greater that what occurred at the time.

38    Once there is factored into the assessment of the gravity of the offences the other matters admitted by the defendant and which were not an immediate cause of the accident on 1 April 1998 (as to which see the second and third items in paragraphs 21 and 22 of the agreed facts) the manifestly serious nature of the offences is plain.

39    Further, although the defendant is entitled to have taken into account the consideration that it was at the time in the very process of remedying the hazards and risks to safety which existed at the premises, it is also relevant that it had occupied the site for over 12 months and had been using it for the same purposes for that period. The weight of that consideration otherwise in favour of the defendant, is accordingly limited.

40    The Full Bench of this Court in Capral Aluminium Limited, at [71] - [79], held that, except in rare situations, appropriate weight has to be given to both specific and general deterrence in sentencing for breaches of the Occupational Health and Safety Act. The circumstances of this matter are such that deterrence in both respects are important considerations in the penalties to be imposed. On the material before the Court, it seems clear that significant ignorance as to elementary safety requirements existed in at least some parts of the relevant industry. Although the steps taken at the time and since then by the defendant to remedy the defects in safety mitigate to some degree the relevance of specific deterrence, nevertheless the significant extent of the hazardousness of the workplace and the period over which that existed are such that specific deterrence must also be a factor of some weight.

41    Further, the circumstances that existed at the time represented reasonably foreseeable risks of injury. The injuries and damage to property (the damage to property being itself indicative of the potential for injuries to occur) were themselves entirely foreseeable. These considerations necessarily result in the offences being considered more serious than would otherwise be the case: see, for example, Capral Aluminium at [81] and [82] and Department of Mineral Resources (NSW) (McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 27. Nevertheless, it is important in assessing appropriate penalties to ensure that the assessment does not take into account the charge under the Dangerous Goods Act which has been withdrawn. Some aspects of the agreed facts (for example paragraphs 5 and 27) refer to considerations relevant to that matter. The only relevance those matters have, in terms of the gravity of the offences under the Occupational Health and Safety Act (particularly when seen in light of the change in practice set out as the first item in paragraph 31 where the quantities of dangerous goods kept on the premises have been reduced and limited) is that, at the time, quantities of such materials were kept on the site in excess of those needed for the carrying out of the day to day work.

42    The defendant is entitled to the benefit of the various subjective factors which it has relied upon. This includes its lack of prior convictions under the relevant legislation. It is somewhat difficult in this matter to describe, as is often done, the defendant as a safety conscious employer because of the circumstances in existence on the date of the offences. Nevertheless, some credit has to be given for the defendant putting in train steps to remedy the unsafe situation of the premises prior to and at the time of the offences and the steps that it has taken since. There should also be acceptance of the submission of counsel for the defendant that it has demonstrated concern for the safety and welfare of employees, including the employee injured when the offences occurred. The Court will act on the basis that the defendant demonstrated contrition of an appropriate kind.

43    It is also necessary to have regard to the means or financial situation of the defendant and also the nature of the defendant itself. The relevant considerations were considered in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (No 2) at [27] and [42] and it is appropriate to adopt that approach here. Reference has been made to the material relevant to these issues, limited though it is. I note that the relevant approach includes the consideration that although a heavy fine may be a burden on a defendant and its financial resources, that does not necessarily preclude the imposition of such a penalty as the penalties imposed, while having regard to the particular circumstances of the defendant, must also be such as to reflect appropriately the seriousness of the offences. This balance of considerations is not without difficulty in the present proceedings. However, I find that, on the material available, the fines that are to be imposed are not beyond the means of the defendant.

44    The defendant's plea should be accepted and convictions recorded. Having regard to all the considerations referred to, including the defendant's early plea of guilty, and the approach required by the guideline judgment in R v Thomson; R v Houlton, a discount in the order of one third should be allowed having regard to the utilitarian value of the early plea (which I accept was made at the earliest possible time); the contrition of the defendant; the steps taken by the defendant to remedy the hazards to safety and its assistance to the authorities.

45    The final consideration is the application of the relevant principle in Pearce v The Queen at [45] to [46] and the related question of totality also considered in Pearce. The application of these principles presents particular difficulties in these proceedings because of the substantial overlap of the criminality or culpability in the respective offences. The approach to be adopted was considered in some detail in WorkCover Authority of New South (Inspector Mulder) v Yass Shire Council (2000) 99 IR 284 at [28] to [30] and [37], and that approach should be applied in the present case. Counsel for the prosecutor submitted that the offences were to be considered equally serious but properly conceded that the Court had to ensure that there was no "double counting" of the culpability in assessing the penalties and that the principle of totality provided the means to ensure that this did not occur. There is clearly a substantial overlap between the two offences.

46    Although a purpose of both s 15 and s 16 is to ensure a safe workplace the provisions have independent albeit overlapping operation. It might be open to the Court to conclude that the offence under s 16 was the more serious because of the greater number of independent contractors working on the site than the number of employees. However, there is very limited material available to the Court as to how certain persons were there as employees and others there as independent contractors. The only specific evidence as to these matters relates to the two persons referred to by name in the charges who are also referred to in paragraphs 7 and 8 of the agreed facts. Those paragraphs, and the material contained in paragraph 13, indicate that the persons in question worked in very similar roles (or at least roles at a similar level in terms of occupational hierarchy) and in fact worked side by side. Indeed, at the time of the accident they were working as a team. There does not appear to be any clear rationale why some persons were there as employees and others as contractors. The only conclusion available is that the situation occurs because of some ad hoc preference of either the individuals concerned or the defendant, or perhaps both. In those circumstances, there seems little alternative but to regard the offences as being equally serious although having a substantial overlap both conceptually and practically.

47    In all the circumstances, including the need to proceed in the measured way required by the judgment of the High Court in Pearce, and having regard to the various considerations earlier adverted to, including the discount in the order of one third, it is considered that a fine of $60,000 is the fine appropriate in relation to the charge under s 15 of the statute, and the penalty in relation to the charge under s 16 should also be $60,000. The principle of totality then requires consideration of the overlap of culpability or criminality of the defendant arising from both convictions. It is essential in that process to ensure that there is no "double counting" of the culpability of the defendant. The overall culpability of the defendant must have regard to the significant practical and conceptual overlap between the two offences and the fact that both offences occurred at the same time and have almost identical ingredients. The aggregate penalty must be "just and appropriate": Mill v The Queen (1988) 166 CLR 59 at 62 - 63. The application of the principle of totality would, in those circumstances, result in a total fine of $67,000. This amount, as well as reflecting the overall culpability or criminality of the defendant in relation to the two offences and all the particulars thereof, also reflects the reduction in the order of one third provided for the plea of guilty and related considerations. Having regard to the conclusion that culpability of the defendant as to each offence was in the same order, fines of $33,500 should be imposed in each matter.

Orders

48    The Court accordingly makes the following orders:

1. Leave is granted to discontinue the proceedings in Matter No IRC 1407 of 2000.

2. The defendant is convicted of the offence alleged in Matter No IRC 1408 of 2000 under s 16(1) of the Occupational Health and Safety Act 1983.

3. As to that offence, the defendant is fined the sum of $33,500 with a moiety of that fine to the prosecutor.

4. The defendant is convicted of the offence alleged in Matter No IRC 1410 of 2000 under s 15(1) of the Occupational Health and Safety Act 1983.

5. As to that offence, the defendant is fined the sum of $33,500 with a moiety of that fine to the prosecutor.

6. The defendant shall pay the prosecutor's costs of these proceedings (other than the costs of the commencement of, and of the motion to discontinue, the proceedings in Matter No IRC 1407 of 2000) in a sum as agreed or, in default of agreement, as assessed.

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LAST UPDATED: 23/05/2001