Inspector Morgenthal v Sydney Ports Corporation [2005] NSWIRComm 14 (23 February 2005)

Last Updated: 4 March 2005

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Inspector Morgenthal v Sydney Ports Corporation [2005] NSWIRComm 14

FILE NUMBER(S): IRC 4026

HEARING DATE(S): 06/12/2004, 07/12/2004, 14/12/2004

DECISION DATE: 23/02/2005

PARTIES:

PROSECUTOR

Inspector Mark Morgenthal

DEFENDANT

Sydney Ports Corporation

JUDGMENT OF: Staff J

LEGAL REPRESENTATIVES

PROSECUTOR

Ms P McDonald of counsel

Solicitor: Ms J Healy

Phillips Fox

DEFENDANT

Mr B Hodgkinson SC

Solicitor: Ms N Barnett

Henry Davis York

CASES CITED: Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; 99 IR 29

Carrington Slipways Pty Limited v Callaghan (1985) 11 IR 467

Ferguson v Nelmac (1992) 90 IR 188

Fisher v Samaras Industries Pty Limited (1996) 82 IR 384

Fletcher Construction Australia Ltd v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66

Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464

Morrison v Powercoal Pty Ltd (2003) 130 IR 364

R v Thompson, R v Houlton (2000) 49 NSWLR 383

Tyler v Sydney Electricity (1993) 47 IR 1

Veen v The Queen (No 2) (1988) 164 CLR 465

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 (2000) 95 IR 383

WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80

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

WorkCover Authority of New South Wales (Inspector Robins) v Ecolab Pty Ltd (1999) 90 IR 413

383

WorkCover Authority (NSW) v Wonar Pty Ltd (unreported, Industrial Court, NSW, No 1214 of 1990, Fisher CJ, Glynn and Cullen JJ, 30 June 1992)

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999

Occupational Health & Safety Act 1983

JUDGMENT:

- 1 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

Coram: Staff J

23 February 2005

Matter No IRC 4026 of 2003

INSPECTOR MARK MORGENTHAL v SYDNEY PORTS CORPORATION

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

JUDGMENT

[2005] NSWIRComm 14

1. At approximately 7.25 am on 23 July 2001, Mr Philip Collins, who was employed as a Shift Engineer, Port Officer, Grade 2, by Sydney Ports Corporation ("the defendant") attempted to access a tug by the Emergency Response Jetty Gangway ("the gangway"). The gangway was stored in a vertical position and was mechanically lowered to the horizontal position to provide access from the jetty to the tug. As Mr Collins walked across the gangway, it moved quickly from the horizontal position to the vertical position, catapulting Mr Collins from the gangway on to the jetty.

2. Mr Collins suffered multiple injuries, including an open fractured pelvis with six fractures. His femur was driven through his hip into his abdomen. He had an embolism in a lung and lost 40% of lung capacity. His back was injured and he suffered from brain damage.

3. The defendant was prosecuted by Inspector Morgenthal under s 15(1) of the Occupational Health & Safety Act 1983 ("the Act").

4. In an application for order, the prosecutor alleged that the defendant contravened:

Section 15(1) of the Occupational Health & Safety Act 1983 in such case made and provided that ... the Defendant, an employer, at the Emergency Response Jetty, Inter Terminal Access Road, Botany, in the State of New South Wales (the premises), breached s 15(1) of the Occupational Health & Safety Act 1983, in that it failed to ensure the health, safety and welfare at work of all its employees at the premises, and in particular Philip Archibald Collins.

Particulars of the Defendant's breach are as follows:

1.1 Failure to ensure that the Emergency Response Jetty Gangway located at the premises was safe and without risk to health and safety when being used;

1.2 Failure to carry out an adequate risk assessment in relation to the use, operation, and/or upkeep of the Gangway;

1.3 Failure to provide an adequate system of work for the inspection and/or maintenance of the Gangway.

5. The defendant initially pleaded not guilty to the charge and nine days were fixed for the hearing of the matter.

6. The hearing commenced on 6 December 2004.

7. On Tuesday 7 December 2004, the Court was advised that the defendant pleaded guilty to the charge.

8. When the hearing resumed, Ms P McDonald of counsel, who appeared for the prosecutor, informed the Court that particular 1.2 was no longer pressed.

9. An agreed statement of facts was tendered which provided the following information:

1. At all material times the Prosecutor was an Inspector appointed under Division 1 of Part 5 and empowered by Section 106 of the Occupational Health and Safety Act 2000 to institute proceedings in this matter or, in the alternative, was an Inspector appointed under Division 4 of Part 3 and empowered under the Occupational Health & Safety Act 1983 to institute proceedings in this matter.

2. At all material times the Defendant, Sydney Ports Corporation, was established pursuant to the Ports Corporatisation and Waterways Management Act 1995 and has its principl (sic) office located at c/- 207 Kent Street, Sydney in the State of New South Wales ("the Defendant").

3. At all material times the Defendant:

(a) employed Philip Archibald Collins as a Port Officer Grade 2;

(b) employed Alan Chalker as a Property Maintenance Officer.

4. On 23 July 2001 Mr Collins was working at the defendant’s premises at Port Botany and was required to carry out some work on a tug vessel berthed at the Emergency Response Jetty. 5. Access to the tug was via the Emergency Response Jetty Gangway ("Gangway"). The Gangway was stored in a vertical position and was mechanically lowered to the horizontal position to provide access from the jetty to the tug.

6. At approximately 7:25am as Mr Collins walked across the Gangway, it moved quickly from the horizontal position to the vertical position, and Mr Collins was catapulted from the Gangway on to the Jetty.

7. Mr Collins suffered multiple injuries. He suffered an open fractured pelvis with six fractures. His femur was driven right through his hip into his abdomen. He had an embolism in a lung and lost 40% of his lung capacity. His back was injured and he suffered from brain damage.

8. Mr Collins has not returned to his pre accident duties and has been retired medically unfit.

9. After the accident a failed shackle was retrieved. According to the defendant, the failed shackle connected two parts of a stainless steel chain which in turn connected an alloy block to a counterweight. The design and construction of the Gangway is explained in more detail below.

The Design of the Gangway

10. The Defendant’s predecessor, the Marine Services Board ("MSB") had the Gangway designed by Ewbank, Preece, Sinclair, Knight in 1992. The Gangway was constructed and installed by Australian Winch & Haulage Co Pty Ltd ("AWH"). The Gangway as designed was configured as follows:

(a) a galvanised steel A-frame structure was bolted to the timber jetty ("A-Frame");

(b) a pivoting platform (aluminium construction) ("the Platform") was attached to the A-Frame;

(c) there were two submerged counterweights:

(i) one primary counterweight ("CW1") (concrete, taken to be 740 kg from design drawing dimensions and a concrete specific gravity of 2.3), attached to the Platform with two galvanised chains and shackles (one on each side of the platform end). The attachment points are at the land end of the Platform and the basic purpose of CW1 is to provide a degree of balancing to the Platform on the other side of the pivot, hence reducing the effort required to raise the Platform;

(ii) one secondary or hoisting counterweight ("CW2") (cast iron, taken to be 680 kg from the design drawing), attached to the Gangway through the following means:

(A) via a single 8 mm wire rope and a configuration of sheave blocks which was attached to the Platform and then attached to a 13 mm galvanised chain and thence to an oblong link ("Platform Rope"); and

(B) via a galvanised chain feeding through to the electric winch hoisting mechanism ("Winch Mechanism") and connecting to the oblong link ("Hoist Chain"); and

(C) a galvanised chain attached to the lower side of the oblong link and connected to CW2 ("Counterweight Chain").

(d) an electric Winch Mechanism (415 volts) for lifting CW2.

11. Two diagrams showing the above design are Exhibit P1 and P2.

12. The as designed Gangway operated via the Winch Mechanism lifting the Hoist Chain via the oblong link, which in turn lifted the Counterweight Chain and CW2. As CW2 raised, the Platform Rope attached to the oblong link moved up and this allowed the Platform to lower.

13. The oblong link, Counterweight Chain and CWI and CW2 were located below the jetty and under the water.

14. When the platform was in the horizontal position, if failure occurred in the Counterweight Chain, the Platform Rope or the shackles attached to either the Counterweight Chain or the Platform Rope or the CW2, the Platform would remain horizontal and the failure scenario would not cause the Platform to move upwards uncontrollably.

15. When the Gangway was lowered, if there was any failure of the Winch mechanism or the Hoist Chain, the Gangway would rise suddenly to its vertically stowed position. The combination of a very heavy iron counterweight with a large lever arm applied to the Gangway would point towards such movement having high acceleration and velocity.

Changes to the Gangway

16. During March 1998 AWH fitter Greg Walkden found that the counterweight chains were badly corroded. Mr Chalker asked AWH what could be done to improve the life of the Gangway components. AWH recommended that in response to the problem of corrosion, stainless steel should be used for components that were under water. The galvanised Hoist Chain could not be replaced with stainless steel as the size of a stainless steel chain necessary to carry the load would be too large to fit through the winch. Accordingly, AWH recommended that from the point of the oblong link downwards and the oblong link should be replaced with an alloy block to separate the carbon steel components of the Winch Chain from the stainless steel components. The Defendant accepted AWH's recommendation.

17. On or about 1 and 2 April 1998, AWH came on site to replace the oblong link with the alloy block and to replace the galvanised steel chain and shackles connected to CW2 with a stainless steel chain and shackles.

18. Subsequently on or about December 1998 after repair work had been conducted by AWH on the winch, gangway and counterweight, AWH attached a stainless steel wire that directly connected CW2 to the wharf. This wire was purely for the purpose of locating CW2 if it detached in the future.

19. The changes to the components of the Gangway as described in paragraph 17 above did not alter the mechanical design of the Gangway.

20. In or about July 2000, AWH considered the redesign of the Gangway by removing CW2 and replacing it with a hydraulic ram. The use of the hydraulic ram would have meant that the problems of corrosion with the Hoist Chain, Counterweight Chain would have been removed altogether and that the risk of the gangway rising suddenly because of failure of the hoist chain mechanism would be removed. However, AWH did not recommend the use of the hydraulic ram as Ian D'Arth had a clear understanding that it would have been too expensive for the defendant.

21. During February 2000 AWH performed further repair work to the hoist and replaced a broken shackle to the counterweight.

22. In about June 2000 there was a problem with the gangway and it was believed by Mr Chalker that the CW2 had become detached. AWH found that the counterweight attachment had failed; however, AWH did not reconnect the counterweight and a company which specialised in underwater repair and installation work called Gray Diving was contracted to retrieve the CW2. Gray Diving came to the site and retrieved the CW2 and the associated cables and chains and placed them on the jetty.

23. The CW2 and associated cables and chains were put back into position on or about 24 July 2000.

24. According to the Defendant, it appears that Gray Diving may have reconnected the components of the Gangway including the Hoist Chain, Platform Rope and Counterweight Chain in order to return CW2 to the water.

25. At some point in time, the Defendant believes that the Counterweight Chain broke and was reconstructed by a shackle being inserted to reconnect the two parts of the Counterweight Chain. The Defendant maintains it was a shackle at this point, between 2 parts of the Counterweight Chain, that failed on 23 July 2001 ("the Shackle").

26. According to the Defendant as it identified the Shackle (that failed) as the one connecting two parts of the Counterweight Chain, the Platform Rope must have been connected to a point in the Counterweight Chain below the Shackle or directly to the CW2. This would have caused the Gangway to rise suddenly to its vertically stowed position, should that particular shackle failed (sic).

Maintenance of the Gangway

27. In or about 1995, Mr Alan Chalker took on the position of Property Maintenance Officer and he has remained in that position to date. This role includes responsibility for certain of the Defendant's assets in the Port Botany area.

28. Mr Chalker commenced working as an apprentice bridge and wharf carpenter on 2 January 1963 with the MSB, gained his trade certificate in 1967 and remained working as a Bridge and Wharf Carpenter until about 1978 at which time he was appointed as a foreman.

29. From 1995 onwards, AWH were engaged by the Defendant to perform maintenance and repair work on the Gangway. AWH would be called if the Gangway required servicing or maintenance. The defendant did not develop its own maintenance requirements for the Gangway since it relied upon the full inspection of the Gangway carried out by AWH each time it attended site.

30. When AWH attended the Gangway it would be to concentrate on a specific complaint but at the same time it would check the equipment.

31. The only maintenance that AWH recommended the Defendant itself perform was greasing of the Hoist Chain. Notably, the Hoist Chain and Winch Mechanism are the only parts of the Gangway which if a failure occurred within would have caused the Gangway to move from the horizontal to the vertical position.

32. The greasing of the chain was undertaken by Mr Chalker or other employees of the Defendant working with Mr Chalker. As part of Mr Chalker’s regular visits to the emergency response jetty, he would inspect the wire rope, sheaves and the general appearance of the Gangway. If Mr Chalker noticed anything abnormal he would contact AWH. Other employees of the Defendant who used the Gangway would also notify Mr Chalker of any faults in the operation of the Gangway. AWH would only be called when an abnormality occurred.

33. Mr Chalker did not inspect the underwater components. There was no set regime for the inspection of the underwater components as the arrangement was for AWH to undertake this when attending the site to fix a particular problem.

34. At one stage, AWH recommended that Mr Chalker put a bucket of oil where the hoist chain fell and allow the chain to grease itself. Mr Chalker did this. However, when the chain re-entered the water, it left visible oil residue in the water. The Defendant is responsible for investigating and prosecuting marine pollution in Port Botany. Accordingly, it was unacceptable for the Defendant to put any oil residue into the water. So Mr Chalker removed the oil bucket and returned to the system of greasing the chain himself.

35. If Mr Chalker noticed anything unusual about the operation of or the appearance of the Gangway or if he was notified of any problem by anyone else, he would always call AWH straight away. Mr Chalker informed the Defendant employees who used the Gangway to notify him of any problems at all with its operation.

36. When Mr Chalker called AWH about a problem, he would usually describe what was unusual about the Gangway and AWH would promptly attend the site to investigate. On most occasions, AWH would arrive on site to inspect the Gangway the same day that Mr Chalker called.

37. AWH performed an inspection approximately every 12 months during the years 1997 to 2001.

Incidents involving the Gangway prior to 23 July 2001

38. In a previous incident the CW2 detached and could not be recovered. A new lifting counterweight was installed and with a stainless steel wire rope attached to ensure it would not be lost in the event of another failure.

39. According to Mr Chalker, CW2 had detached on two occasions prior to 23 July 2001.

40. Approximately 15 months prior to the incident on 23 July 2001, a chain attached to CW2 failed, releasing the Gangway quickly to the vertically stowed position. This incident was witnessed and reported by Mr Collins. SPC were unable to locate any records of this incident being reported.

Reasons for failure of the Shackle

41. Shortly after the incident on 23 July 2001, the Defendant retrieved the Shackle, and sent it to ETRS Pty Limited ("ETRS") for testing and metallurgical examination. ETRS provided two reports dated 14 February 2002 and 1 August 2001 ("ETRS Reports"). The ETRS Reports identified the failure of the Shackle as being the result of intergranular corrosion caused by a manufacturing fault by way of incorrect heat treatment during production.

42. In addition on a visual inspection of the shackle, the ETRS report observed that the inner surface of the shackle showed a large broad pit which was consistent with crevice corrosion. The report noted:

“Crevice corrosion is a characteristic type of corrosion that occurs between two surfaces that are in close contact. Normally, for a given application, crevice corrosion proceeds faster that (sic) other types of corrosion since comparatively more-aggressive conditions can develop within the crevice.”

43. Reza Eftekhar, Senior Engineer (Plant) for the WorkCover Authority of NSW, reviewed the ETRS reports and the statements obtained during investigation by the Prosecutor. Mr Eftekhar made the following conclusions:

(a) the reason for failure of the Shackle was due to inter-granular crevice corrosion.

(b) the galvanised steel shackle, which was selected by the designer of the Gangway, and was initially used for the counter weight assembly, was the correct material selection;

(c) the stainless steel Shackle, which replaced the original galvanised steel shackle was not suitable for its purpose because it was inherently susceptible to inter-granular corrosion.

Systems of work after 23 July 2001

44. Since the incident on 23 July 2001, the Defendant has taken the following measures in relation to the Gangway:

(a) redesigning the lowering/lifting of the Gangway by electric powered winch, eliminating the lifting counterweight, chain and shackle and the risk of accidental or uncontrolled movement due to a counterweight failure;

(b) installation of a failsafe brake in the winch ensuring the Gangway will not fall or move in the event of a power failure to the winch;

(c) implementation of a safe work procedure for the lowering/raising of the Gangway;

(d) implementation of an inspection program;

(e) implementation of a maintenance program; and

(f) upgrading the defect reporting system, including incidents regarding the Gangway. This system is certified to IS9001 and regularly inspected by an independent, experienced maritime auditor/organisation.

45. The facts of this matter include:

(a) The Defendant owned the Gangway and was responsible for the inspection, maintenance and safe operation of the Gangway;

(b) The elimination by redesign of the chain hoist and lifting counterweight would have made the Gangway safe to use;

(c) The Defendant failed to eliminate an identifiable foreseeable hazard that had the potential to cause serious injury prior to the incident on 23 July 2001; and

(d) The Defendant carried out inspections of the visible above water components of the Gangway (such as the winch, chain and walkway boom). Inspections of the underwater components were carried out by AWH. It was possible for the Defendant to inspect the underwater components by lifting the components with a crane on tug vessels and physically observing for defects and or corrosion (excluding intergranular corrosion).

...

47. As a result of the Defendant's breach, Philip Collins was seriously injured.

10. The prosecutor tendered a factual inspection report prepared by Inspector Morgenthal dated 31 January 2003; two photographs of the corroded failed stainless steel shackle from the Emergency Response Jetty Gangway; drawings and diagrams of the gangway and an Operational and Maintenance Manual.

11. The defendant tendered affidavits of Barbara Filipowski, the Company Secretary and General Counsel of the defendant and Alan William Chalker, Property Maintenance Officer. A photograph of the second counterweight chain taken on 23 July 2001 after it had been recovered from the water was tendered.

12. In her affidavit, Ms Barbara Filipowski addressed the following matters:

· On 7 December 2004, Mr Shane Hobday, General Manager Marine Operations, advised her that his father-in-law had died and he had been absent from work intermittently and not involved in the proceedings since that day.

· On 23 July 2001, Mr Hobday observed the alloy block with the stainless steel chain attached to one side and a mild steel chain attached to the other, on the wharf. A stainless steel chain was attached to the secondary counterweight and had a failed shackle on the other end. The pins of the shackle had failed.

· On 23 July 2001, Mr Hobday delivered the failed shackle to ETRS Pty Ltd for metallurgical testing.

· On 14 February 2002, ETRS Pty Ltd provided a report which concluded that the shackle failed because of intergranular corrosion resulting from lack of proper heat treatment in the manufacturing process. A copy of this report was annexed to the affidavit.

· The findings of the investigation conducted by ETRS Pty Ltd included:

The shackle in question was suffering from an intergranular form of crevice corrosion prior to the failure.

Fracture occurred via the shackle pin pulling through the corroded (weakened) shackle eyes.

The corrosion would not have been readily visible because it was occurring within the shackle and travelling through the microstructure (in other words corroding from the inside of the shackle to the exterior).

The presence of grain boundary carbides was considered to be the cause for the observed intergranular crevice corrosion.

Grain boundary carbides can be avoided by ensuring that castings are cooled quickly through the temperature range of around 500-900C. Carbides are normally removed from stainless steels by heat treating, which consists of solution annealing at a high enough temperature to dissolve the carbides followed by quenching (rapid cooling) to avoid their reformation upon cooling.

It was considered unlikely that the shackle would have corroded in 12 months of service if it had been properly heat treated.

The appearance of the general microstructure indicated that the shackle material was in the as-cast condition. In other words, it appeared not to have received a separate heat treatment after casting.

The report concluded:

Failure of the shackle was attributed to an intergranular form of crevice corrosion caused by the presence of grain boundary carbides within the microstructure.

The presence of grain boundary carbides was due to incorrect heat treatment during manufacture of the stainless steel shackle material.

· The defendant's management did not have any knowledge of any report being made of the gangway previously malfunctioning, such that the platform raised violently from the horizontal to the vertical position.

· From 1995, the defendant engaged Australian Winch & Haulage ("AWH") to perform maintenance and repair work on the gangway.

· The optimum maintenance programme for the gangway was one that relied on an expert engineering company for maintenance and repairs as the defendant's employees were not, on 23 July 2001, and are still not, specialised in winch based marine machinery and the defendant's engineers are principally engaged in project management roles.

· AWH is a leading mechanical and hydraulic engineering company which designs, constructs and maintains machinery for a wide range of industries. A copy of its corporate profile was annexed together with invoices and associated documents dealing with the maintenance and repair work undertaken by AWH.

· Gray Diving Services Pty Ltd, a diving company, was engaged to retrieve the counterweight for the purpose of servicing by AWH and to perform underwater maintenance and repair work for the defendant, though not on the gangway.

· At the time that the defendant pleaded not guilty, and since that date it was believed that the gangway was incorrectly connected at the time of the incident and that AWH were the last persons to perform any maintenance or repair work on the gangway and that therefore the incorrect connection of the gangway had been performed by AWH.

· On 7 December 2004, advice was received from Henry Davis York Lawyers for the defendant that an invoice from Gray Diving and one of the defendant's purchase orders had been located for work performed by Gray Diving on 21 and 24 July 2000. The AWH invoices state that the last date that AWH was on site to perform work on the gangway prior to the incident on 23 July 2001 was 20 June 2000. It therefore appeared that it was most likely that Gray Diving, not AWH, had reassembled the gangway incorrectly. Copies of the relevant invoices were annexed.

· After the incident, and until the cessation of Mr Collins' employment, the defendant worked with Mr Collins to give him the options requested by him to return to work including initial light duties in marine operations, office related work in developing policies and retraining courses with the Australian Institute of Management.

· During the period Mr Collins was in hospital and recuperating at home, the defendant ensured that any of Mr Collins' or his family's out of pocket expenses associated with his injuries were reimbursed. Copies of documents associated with reimbursement, in particular, hospital car parking expenses were annexed.

· From the date of the incident until Mr Collins' resignation on 23 November 2003, the defendant maintained Mr Collins' full pre-injury pay including shift allowances and salary increases provided for in the applicable enterprise agreement. This was done by making up the difference between the amount Mr Collins was paid through workers' compensation and the amount he would have been paid through his salary plus shift allowances.

· The defendant facilitated Mr Collins successfully applying for salary continuance. The defendant's salary continuation plan provides Mr Collins with 75% of his salary on termination (which is linked to the Consumer Price Index and assessed annually) until he reaches age 65 years.

· Since 1996 when the defendant was established, replacing its predecessor, the Marine Services Board, it has, at all times, had a strong commitment to occupational health and safety. It has implemented occupational health and safety policies and procedures including occupational health and safety committees.

· For over five years the defendant has operated a learning and development schedule for all employees. The schedule demonstrates the occupational health and safety legislative awareness training that has been provided to all employees over the past five years.

· In 2001 the defendant decided to enter the Premium Discount Scheme offered by the WorkCover Authority of New South Wales.

· The defendant has been audited by an independent WorkCover accredited assessor for a range of matters including occupational health and safety since 2002. Copies of the results of audits undertaken in 2002, 2003 and 2004 were annexed.

· The defendant successfully passed each audit. The first audit, performed in August 2002 stated the following:

"Sydney Ports displayed a high degree of awareness to occupational health and safety issues. We were most impressed with the attitude and willingness of the organisation at all levels to embrace the concepts and practices and the effort that has been put into a number of areas of safety preparedness.

With this heightened state of safety awareness in place the comments we make in this report can be considered as fine-tuning an already excellent operation. Where the organisation has shortcoming in occupational health and safety there are not generally in life threatening situations or serious compliance breaches."

· Each of the action plans arising out of audits have been addressed by the defendant. Action plans that have arisen out of the audits undertaken were annexed.

· A copy of the defendant's OHS Accountabilities Matrix was annexed. The document is accessible to all employees through the intranet.

· The most recent version of the OH&S Policy was published by email to all staff on 28 May 2004. All new employees during their induction program are specifically taken through their roles and responsibilities in relation to OH&S matters and are introduced to the OH&S Policy.

· Annexed were copies of the defendant's work procedure for injury reporting and management and the defendant's return to work programme.

· Following the incident the following steps were undertaken in relation to the gangway:

(a) WBM Engineering were engaged to redesign the lowering/lifting of the gangway by electric powered winch, eliminating the lifting counterweight, chain and shackle and the risk of accidental or uncontrolled movement due to a counterweight failure. A copy of the report dated 23 March 2002 from the consulting engineer concerning the redesign was annexed.

(b) implemented a safe work procedure for the lowering/raising of the gangway.

(c) implemented an inspection and maintenance program; and

(d) upgraded the defect reporting system, including incidents regarding the gangway. This system is certified to IS9001 and regularly inspected by an independent, experienced maritime auditor/organisation.

13. In his affidavit, Mr Chalker explained that from 1995 onwards he had engaged AWH to perform maintenance and repair work on the gangway. He recalled a conversation with an employee of AWH who he believed to be either Mr Jonathan Woodward or Mr Bill Apap to the following effect:

Chalker: What maintenance do I need to do on the gangway?

AWH Employee: All you need to do is to make sure that the hoist chain is greased. You could just put a bucket of oil where the chain falls and the chain will grease itself.

14. Mr Chalker adopted these recommendations and put a bucket of oil where the hoist chain fell and allowed the chain to grease itself. However when the chain re-entered the water, it left visible oil residue in the water. The oil bucket was removed and Mr Chalker greased the chain himself, checked the chain most days to verify that it was well greased and had no visible deficiencies and asked other employees on site to do likewise. All employees who used the gangway were informed to notify Mr Chalker of any problems with its operation.

15. If a problem arose, Mr Chalker would call AWH immediately who would usually arrive on site to inspect the gangway the same day. AWH was given a standing instruction to undertake a full inspection of and to maintain and repair the gangway including the underwater components, each time they attended the site.

16. Mr Chalker believed that AWH did perform a full inspection, maintenance and repair of the gangway each time that they came onto the site because they would usually make recommendations about a range of components of the gangway about which he had not given them particular instructions. He accepted AWH's recommendations in respect of maintenance and repair of the gangway as he considered that they were experts in the area and trusted them to perform accordingly.

17. Mr Chalker annexed a table showing the maintenance and repair work undertaken by AWH during the period from April 1996 until the date of the incident. In Mr Chalker's opinion a thorough inspection of the gangway every 12 months was adequate. However, between 1997 and 2001, AWH performed a thorough inspection more frequently than every 12 months although the last date that AWH performed work on the gangway prior to the incident on 23 July 2001 was 20 June 2000.

18. Mr Chalker stated that none of the failures of the gangway prior to July 2001 resulted in the gangway moving uncontrollably from the deployed or horizontal position to the upright or vertical position. Mr Chalker had no recollection of Mr Collins ever notifying him that the gangway had incorrectly reverted to the upright position prior to the incident.

Submissions of the Parties

19. Ms P McDonald of counsel helpfully provided a written outline of the prosecutor's submissions. Ms McDonald referred to:

· Relevant sentencing factors including Veen v The Queen (No 2) (1988) 164 CLR 465 at 476 where the High Court recognised that sentencing is not a purely logical exercise and identified the following purpose of punishment:

... the protection of society, deterrence of the offender and of others who may be tempted to offend, retribution and reforms.

· In determining penalty the principal and particular purpose of the Act is to protect workers from breaches of safety, health and welfare and to compel attention to the occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (2000) 95 IR 383 at 427.

· The primary determinant of penalty is the objective seriousness of the offence: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474.

· Subjective factors which play a subsidiary role in the determination of penalty include factors such as the plea of guilty, cooperation with the investigation and subsequent measures taken to improve safety.

· The maximum penalty which in this case is $550,000.

· The need for general deterrence.

· The need for specific deterrence.

· The nature and quality of the offence, in that it involved obvious and foreseeable risks.

· The nature of the offence in that there were simple steps available to remedy the failures.

· The nature of the offence in that the injuries suffered by the injured worker manifested the degree of seriousness of the relevant detriment to health and safety.

20. Ms McDonald submitted that the obvious risks involved:

(i) the risk of the gangway suddenly moving to assume its vertical position was an identifiable foreseeable risk that had the potential to cause serious injury;

(ii) the risk of injury was both obvious and reasonably foreseable;

(iii) the existence of a reasonable foreseeable risk (of injury) which is likely to result in serious injury or death will result in the offence being made more serious in nature;

(iv) in respect of the first particular, the operation of the gangway involved the inherent risk of it suddenly moving to the vertical position if there was a failure in the components identified as the winch mechanism and/or the hoist chain;

(v) this mechanism had failed in the past as evidenced by Mr Collins' observation that about 15 months prior to his accident, the gangway suddenly moved to the vertical position. Mr Collins gave evidence of his observation and his reporting by email to Mr Chalker and to the Marine Maintenance Unit. It was not put to Mr Collins in cross examination that this did not occur and the defendant has agreed to this fact (par 40 of the statement of agreed facts);

(vi) the defendant knew of this risk and during 2000 sought the advice of AWH on a possible redesign of the gangway to eliminate this risk. AWH looked at a proposal involving the use of a hydraulic ram which would replace the use of the counterweight No 2 but AWH's clear understanding was that this would be too expensive;

(vii) if the configuration of the counterweight No 2 by the oblong link had been incorrectly altered by Gray Diving Services in July 2000, this would have occurred approximately a year before the date of the offence and in that time no inspection of the gangway had revealed the incorrect configuration;

(viii) the new configuration added an additional way for the risk of the gangway moving suddenly to the vertical position to occur;

(ix) the system of inspection and maintenance instituted by the defendant was clearly inadequate. There was no systematic or regular inspection of the components under water despite the switch to stainless steel components.

21. The prosecutor further submitted that the true measure of penalty lies in the nature and quality of the offence and not merely the result. The gravity of injury actually resulting from the breach does not of itself dictate the amount of penalty, nevertheless, the occurrence of death or serious injury manifests a degree of seriousness of the relevant detriment to safety: Ferguson v Nelmac (1992) 90 IR 188 at 204 and; Tyler v Sydney Electricity (1993) 47 IR 1 at 5.

22. There was the potential for an employee to suffer serious injury if the gangway was suddenly moved to the vertical stowed position. The configuration of the gangway meant that it would move to the vertical position with high acceleration and velocity.

23. The seriousness of the risk is also reflected in the serious injuries suffered by Mr Collins.

24. There were simple and remedial steps available to the defendant which are reflected in the changes it introduced after the accident involving Mr Collins.

25. The subjective factors referred to by Ms McDonald were:

a) it had been agreed between the parties that the defendant had not entered a plea at an early opportunity and hence is not entitled to a discount for that reason;

b) the defendant had no prior convictions under the Act, or under the 2000 Act;

c) the defendant has good industrial citizenship.

26. Mr B Hodgkinson SC appeared for the defendant. Mr Hodgkinson submitted:

· the defendant had taken steps upon immediately becoming aware of the involvement of Gray Diving Services Pty Ltd to discontinue cross examining a prosecution witness. The prosecution didn't have the material and the defendant should be given some credit for its immediate action;

· the defendant took immediate and positive steps after the accident to redesign the mechanism that operated the gangway. It was emphasised that the defendant initiated discussions in 2000 regarding the redesign of the mechanism. However, an economical alternative was not made available by the experts until after the accident.

· the original design was done by experts in the field;

· the defendant responded to problems of corrosion by introducing stainless steel components, accepting AWH's recommendation;

· the mechanism being above the water level was checked daily with a maintenance programme in place involving experts. If the mechanism had been correctly assembled by Gray Diving the gangway would have failed to the horizontal;

· the shackle had been wrongly manufactured and the defendant was entitled to rely upon it being properly manufactured;

· this is not an offence where the defendant ignored the potential risk but rather sought to address the risks in a constructive way;

· the mechanism was incorrectly reassembled by divers, not experts, and the defendant acknowledged its responsibility in that regard. The nature, context and quality of the offence should be seen in this light. If the mechanism had been correctly reassembled it would have failed to the horizontal. The incorrect reassembling caused it to fail to the vertical.

· in respect of general deterrence Mr Hodgkinson pointed to various programmes that the defendant had in place which included a consideration of the effect of corrosion and its occupational health and safety record;

· in respect of specific deterrence, Mr Hodgkinson relied on the shackle being incorrectly manufactured and the complete redesigning of the gangway in a manner that had not previously been suggested.

Consideration

27. The primary consideration in sentencing is the gravity of the offence viewed objectively: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474; Fletcher Construction Australia Ltd v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 77 - 81. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalties set by the legislature from zero to the maximum: WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd and Anor (No 2) (2000) 99 IR 163. The maximum penalty in this case is $550,000.

28. Matters that are relevant to a consideration of the objective seriousness of the offence are the nature and quality of the offence and whether it involved obvious or foreseeable risks, whether there were simple and straightforward steps available to remedy any failures on the part of the defendant and, the practical and potential consequences flowing from the commission of the offence including whether injuries sustained by an employee or person manifested the degree of seriousness of the relevant detriment to safety. The Court is also required, in fixing any penalty, to consider the need for both general and specific deterrence: Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; 99 IR 29 at [71]-[80].

29. A secondary consideration is the subjective features of the offence, that is, the facts concerning the offender. This will assist the Court in determining whether any penalty justified by the objective circumstances of the offence should be modified. The penalty to be imposed must generally be such as to compel attention to occupational health and safety generally so as to ensure that workers whilst at work will not be exposed to risks to their health and safety: Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388; Capral Aluminium.

30. In considering the nature and quality of this offence, the Full Bench of the Industrial Relations Commission in Court Session in Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 at 339 stated:

... The penalty must reflect the nature and quality of the particular offence; the level of penalty must, on the one hand, compel attention to occupational health and safety risks in order to ensure that persons are not exposed to such risks at their workplaces but, on the other, must not be oppressively high.

31. There are a number of relevant matters to be taken into account in considering the nature and quality of the offence Firstly, the risk of the gangway suddenly moving to assume its vertical position was an identifiable foreseeable risk that had the potential to cause serious injury. Secondly, the mechanism had failed in the past and the defendant knew of this risk during 2000 and sought advice of AWH on a possible redesign of the gangway to eliminate the risk. Thirdly, when the gangway was lowered, if there was any failure of the winch mechanism or the hoist chain, the gangway would rise suddenly to its vertical stowed position. A combination of a heavy iron counterweight with a large lever arm applied to the gangway pointed towards such movement having high acceleration and velocity. Fifthly, the system of inspection and maintenance instituted by the defendant was clearly inadequate.

32. The safety system relied upon by the defendant was dependent upon regular inspections. The system was, in my view, insufficiently comprehensive. It relied almost entirely upon AWH being called to attend the site to perform work on the gangway and whilst there carrying out whatever further maintenance it believed necessary. There were no other "layers of safety" introduced by the defendant (see WorkCover Authority of New South Wales (Inspector Robins) v Ecolab Pty Ltd (1999) 90 IR 413). The system was essentially dependant upon the attendance of AWH. There was no system of maintenance in place to check the work performed by the divers from Gray Diving.

33. The existence of a reasonably foreseeable risk which is likely to result in serious injury or death will result in the offence being made more serious in nature: Capral Aluminium at [81],[82].

34. The principal failure as expressed in particular 1.1 of the charge was that the defendant failed to ensure that the Emergency Response Jetty Gangway located at the premises was safe and without risk to the safety and health when being used. Mr Hodgkinson submitted that the defendants had relied on experts in the field to provide advice regarding the mechanism that operated the gangway, there was a system of maintenance in place and that if the gangway had failed, it would have failed to the horizontal not creating any risk. The risk arose from divers incorrectly reassembling the counterweight chain and rope onto the second counterweight.

35. Mr Hodgkinson submitted that it was not a gross failure on the part of the defendant. However, once the factors relied on by the defendant to mitigate the objective seriousness of the offence are considered in the appropriate perspective, it is plain that the gravity of the offence was great. This is a case where the seriousness of the breach of the Act is demonstrated by the seriousness of the injuries suffered by Mr Collins. The facts accepted by the parties show a situation where a significant hazard to health and safety existed, or was permitted to occur. The gangway remained in operation after its failure in 2000. Steps to prevent a re-occurrence were neglected due to cost considerations and a regular maintenance programme was not in existence.

36. The seriousness of an injury does not dictate the size of any penalty but it does demonstrate the seriousness of the detriment to safety occasioned by the offence: WorkCover Authority (NSW) v Wonar Pty Ltd (unreported, Industrial Court, NSW, No 1214 of 1990, Fisher CJ, Glynn and Cullen JJ, 30 June 1992 (at 9)); Lawrenson Diecasting; Tyler v Sydney Electricity (1993) 47 IR 1 (at 5).

37. In Morrison v Powercoal Pty Ltd (2003) 130 IR 364, the Full Bench Wright J President, Walton J Vice-President, Boland J stated at [33]:

[33] Thus, it may be the case that an employer prosecuted under s 15 of the Act was aware of a serious risk to the health and safety of its employees but took no action to eliminate the risk, notwithstanding that simple and straightforward remedial steps were available. The gravity of such an offence, despite the fact no one was injured and having regard to relevant subjective factors, might be assessed at the high end of the range of penalty available to be imposed on the offender. On the other hand, another employer may have had a good safety record, a safe system of work in place, provided a high level of training, instruction and supervision but through a combination of inadvertence on the part of an employee and a momentary lapse in supervision, a fatality occurs. The assessment of the objective seriousness of the offence could conceivably be at a level lower than that applied to the first employer and, having regard also to subjective considerations, might attract a lower penalty. Importantly, however, in the latter example, the occurrence of death may indicate that the risk to which the deceased employee was exposed, despite the employer's demonstrable commitment to providing a safe workplace, represented a serious detriment to safety deserving of a higher penalty than otherwise might be the case.

38. The defendant in this matter was aware of the risk that the gangway could rapidly return to the vertical. It sought advice from AWH, however, it deferred any action to eliminate the risk due to cost. Such conduct appears to fall within the first example referred to by the Full Bench in Powercoal.

39. Nevertheless, the defendant is entitled to rely on the subjective considerations put forward. I accept on the evidence that the defendant has a strong commitment to occupational health and safety and gives such matters priority in the conduct of its business. Although the defendant relied upon experts in the servicing and maintenance of the gangway hoisting mechanism, it erred in relying upon non experts from Gray Diving Services Pty Ltd who performed maintenance and repair work on the gangway which resulted in the incorrect connection of the gangway. An inspection had not been carried out by AWH of the mechanism within the approximate 12 months after the work done by Gray Diving. The Act imposes an absolute liability on employers to ensure that employees are not exposed to risks to their health and safety whilst at work. The failure to have in place a system to regularly check the maintenance and repair work carried out on the gangway exposed Mr Collins and other employees to risks to their safety.

40. The operation of the gangway involved, in my view, the inherent risk of it suddenly moving to the vertical position if there was a failure in the components identified as the winch mechanism and/or hoist chain mechanism which had failed approximately 15 months prior to the accident according to Mr Collins' evidence. Furthermore, I am satisfied that the defendant knew of the risk of the gangway suddenly moving to the vertical position and it was for this reason during 2000 that it sought the advice of AWH on a possible redesign of the gangway to eliminate this risk.

41. The system of inspection and maintenance was clearly inadequate, particularly in light of the corrosion of underwater components that it had experienced in the past. The timing of the inspection of underwater components was dependent upon some part of the gangway requiring repair. Any inspection during the 12 month period after the reconnection by Gray Diving of the counterweight chain would have disclosed the incorrect connection of the gangway. Although I accept the conclusions of ETRS Pty Ltd that the failure of the shackle was attributed to a form of crevice corrosion due to incorrect heat treatment during the manufacture of the stainless steel shackle, an inspection of the reconnection work done by Gray Diving would have exposed the risk.

42. The seriousness of the offence must be gauged by the consideration of the nature of the offence, which involves a breach of a statutory obligation that the "employer shall ensure the health, safety and welfare at work" of its employees. Further, it is clear that the obligation arising from the requirement to ensure, inter alia, the safety of employees involves the requirement of "guaranteeing, securing or making certain" (see, for example, the judgment of Watson J in Carrington Slipways Pty Limited v Callaghan (1985) 11 IR 467 at 470). As stated by Hill J in WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 at 85, it also involves the legal and practical requirement for an employer to:

" ... exercise abundant caution, maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. ... the approach should be a pro-active and not a re-active one; employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time in the workplace.

43. The failures by the defendant as charged were easily remedied as evidenced by the steps after the incident. In particular, the redesign of the lowering/lifting of the gangway by an electric powered winch eliminated the lifting counterweight, chain and shackle and the risk of accidental or uncontrolled movement due to a counterweight failure. An inspection and maintenance programme was also introduced.

44. In assessing penalty, it is necessary that the Court have regard to the need for general deterrence: Capral at [75]. In relation to specific deterrence, as the Full Bench observed in Capral at [77], in view of the scope of the obligations on employers under the Occupational Health & Safety Act, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future. The Court noted:

"this is particularly so where the offender conducts a large enterprise which involves inherent risks to safety".

45. General deterrence must be taken into account because, as identified by Hungerford J in Fisher v Samaras at 388, the offence is against a statute of public interest and public concern and it is important to compel attention to occupational health and safety issues.

46. It is appropriate that I include in the penalty an element for general deterrence.

47. In respect of the question of specific deterrence, the defendant is a reasonably large employer employing approximately 200 employees. The defendant has a very good safety record and took steps to avoid future recurrence of the incident. I also take into account the defendant's strong commitment to occupational health and safety. Each of the above factors have been taken into account in fixing penalty.

48. As to the subjective factors, I accept the defendant is remorseful. I take into account the previously unblemished safety record of the defendant, its commendable commitment to occupational health and safety, the steps taken to improve its safety systems following the accident and the assistance provided to Mr Collins after the accident.

49. The defendant has a commendable injury and rehabilitation regime in which injured workers received immediate medical attention. In relation to Mr Collins from the date of the incident until Mr Collins' resignation, the defendant maintained his full pre-injury pay including shift allowances and salary increases. The defendant facilitated Mr Collins successfully applying for salary continuance. The continuance plan provides Mr Collins with 75% of his salary on termination (which is linked to the Consumer Price Index and assessed annually) until he reaches age 65. Mr Collins was also assisted in his return to work by being provided with light duties and retraining courses. Mr Collins and/or his family's out of pocket expenses associated with his injuries were also reimbursed.

50. The defendant did not enter a plea of guilty until the second day of a nine day hearing. Mr Hodgkinson conceded that in such circumstances, the defendant would not be entitled to a full discount for a plea of guilty, however, he pointed to what he described as the commendable action of the defendant in entering a plea of guilty upon certain documentation coming to the defendant's attention which was not part of the prosecution brief. Ms McDonald referred to R v Thompson, R v Houlton (2000) 49 NSWLR 383 submitting that any discount for the utilitarian aspect in respect of the plea should be minimal.

51. In R v Thompson, Spigelman, CJ (with whom Woods CJ at CL, Foster A-JA and Grove and James JJ agreed) discussed at [160] the guidelines applicable to offences against the laws of New South Wales as follows:

(i) A sentencing judge should explicitly state that a plea of guilty has been taken into account. Failure to do so will generally be taken to indicate that the plea was not given weight.

(ii) Sentencing judges are encouraged to quantify the effect of the plea on the sentence in so far as they believe it appropriate to do so. This effect can encompass any or all of the matters to which the plea may be relevant - contrition, witness vulnerability and utilitarian value - but particular encouragement is given to the quantification of the last-mentioned matter. Where other matters are regarded as appropriate to be quantified in a particular case, for example, assistance to authorities, a single combined quantification will often be appropriate.

(iii) The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge.

(iv) In some cases the plea, in combination with other relevant factors, will change the nature of the sentence imposed. In some cases a plea will not lead to any discount.

52. The above principles should be applied to the history of this matter which is as follows:

(i) On 12 December 2003, the defendant entered a plea of not guilty in matter No IRC 4026 of 2003.

(ii) On 4 February 2004, the matter was fixed for hearing for eight days commencing on 14 June 2004.

(iii) On 19 May 2004, the defendant filed a notice of motion seeking that the hearing be vacated upon the grounds that the prosecutor had not provided the defendant with proper particulars of the case.

(iv) On 28 May 2004, the notice of motion was listed for hearing. The notice of motion was not pressed on the basis of consent orders being made. These orders included the prosecutor to provide a response to the defendant's request for further and better particulars by 16 July 2004, the vacation of the dates fixed for hearing and the programming of the matter for hearing to commence on 6 December 2004.

(v) The hearing commenced on 6 December 2004.

(vi) Three witnesses for the prosecution were called on that day with cross examination of Mr Fowke to continue on 7 December 2004.

(vii) On 7 December 2004, a plea of guilty was entered by the defendant.

(viii) The hearing dates fixed for the matter were vacated. The hearing of the plea was programmed for 14 December 2004, being one of the days previously reserved.

53. Having regard to the history of the matter, the defendant should be given a moderate discount for the plea of guilty when the utilitarian aspects are assessed with other relevant factors referred to in R v Thompson.

54. I consider the following mitigating factors prescribed by s 21A(3) of the Crimes (Sentencing Procedure) Act 1999 may be taken into account in respect of the defendant:

(f) the offender was a person of good character;

(g) the offender is unlikely to re-offend;

(h) the offender has good prospects of rehabilitation;

(i) the offender has shown remorse for the offence by making reparation for any injury, loss or damage or in any other manner.

46. In light of the subjective features set out earlier in this judgment, I consider a total discount of 20% should be allowed in this matter.

47. For the foregoing reasons, I consider an appropriate penalty with regard to the offence under s 15 of the Act, taking into account the above discount, should be a fine of $90,000. I make it clear that the penalty imposed would have been greater but for the factors raised in mitigation by the defendant, including the plea of guilty, the steps taken following the accident and the defendant's impressive safety record. The prosecutor should have a moiety of the fine.

ORDERS

I make 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 $90,000 with a moiety thereof to the prosecutor.

4. The defendant shall pay the costs of the prosecutor as agreed or, failing agreement, as assessed.

LAST UPDATED: 23/02/2005