Inspector Morgenthal v Houghton [2010] NSWIRComm 192 (30 December 2010)

Last Updated: 3 March 2011

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
Inspector Morgenthal v Houghton [2010] NSWIRComm 192



FILE NUMBER(S):
IRC 59 and 63

HEARING DATE(S):
16 December 2010

DATE OF JUDGMENT:
30 December 2010

PARTIES:
Inspector Mark Morgenthal (Prosecutor)
Paul Houghton (First Defendant)
P & D Transport NSW Pty Ltd (Second Defendant)

CORAM:
Staff J


CATCHWORDS: OCCUPATIONAL HEALTH AND SAFETY - prosecution under s 8(1) and s 26(1) of the Occupational Health and Safety Act 2000 - trucking industry - transporting of heavy machinery - demolition industry - mechanical failure - hydraulics failed to support loading ramp - failure of pin in mounting bracket - fatality - third party contributors - obligations of the defendants not diminished because of error or negligence of an employee - changes in circumstances of personal defendant after the accident - capacity to pay - personal defendant impecunious - total fine and costs order must be "acceptable total" - principles - remorse and contrition - conviction - penalty imposed - proportion of costs for personal defendant - Occupational Health and Safety Act 2000, s 8(1), s 26(1)

LEGAL REPRESENTATIVES
Mr M Cahill of counsel (Prosecutor)
WorkCover Authority of New South Wales
Mr M Klooster of counsel (Defendants)
Nationwide Lawyers

CASES CITED:
Cahill v State of New South Wales (Department of Community Services) (No 4) [2008] NSWIRComm 201; (2008) 182 IR 231
Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd [2001] NSWIRComm 130; (2001) 105 IR 348
Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd; [2003] NSWLEC 156; (2003) 128 LGERA 287
Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100
Inspector Jelley v Albright & Wilson (Australia) Limited [2007] NSWIRComm 148; (2007) 164 IR 456
Inspector Melissa Chaston v Sacco Builders Pty Ltd [2008] NSWIRComm 152
Inspector Stephen Cooper v Franklin Alden Coveney [2008] NSWIRComm 80
Inspector Yeung v Donald Edwin Wilson t/as Wilson's Tree Service [2005] NSWIRComm 158; (2005) 143 IR 187
Morrison v Coal Operations Australia Ltd (No 2) [2005] nswircOMM 96 [2005] NSWIRComm 96; (2005) 141 IR 465
Morrison v Powercoal Pty Ltd (No 3) [2005] NSWIRComm 61; (2005) 147 IR 117
Nelmac Pty Ltd v Franke (Inspector) [2006] NSWIRComm 100; (2006) 151 IR 63
R v Northallerton Magistrates' Court; Ex Parte Christopher John Dove [2000] 1 Cr App Rep (S) 136
R v Thomson; R v Houlton (2000) 29 NSWLR 383
WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462
WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited [2000] NSWIRComm 277; (2000) 95 IR 383
WorkCover Authority of New South Wales (Inspector Farrell) v David Carl Schrader [2002] NSWIRComm 25; (2002) 112 IR 284
WorkCover Authority (NSW) (Inspector Mason) v Wild Geese Building and Maintenance Group Pty Ltd [2006] NSWIRComm 350; (2006) 157 IR 313
WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd [2001] NSWIRComm 50
WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163
WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363

LEGISLATION CITED:
Crimes (Sentencing Procedure) Act 1999
Criminal Procedure Act 1986
Industrial Relations Act 1996
Occupational Health and Safety Act 2000


TEXTS CITED:




JUDGMENT:

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: STAFF J

Thursday 30 December 2010

Matter No IRC 59 of 2010

INSPECTOR MARK MORGENTHAL v PAUL HOUGHTON

Prosecution under section 8(1) by virtue of section 26(1) of the Occupational Health and Safety Act 2000


Matter No IRC 63 of 2010

INSPECTOR MARK MORGENTHAL v P & D TRANSPORT NSW PTY LTD

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

JUDGMENT

[2010] NSWIRComm 192

1 P & D Transport NSW Pty Ltd ("the corporate defendant"), carried on a contract trucking business transporting oversize plant and equipment to and from demolition sites.

2 On 29 January 2008, Mr Ronald Scott, an employee of the corporate defendant, was directed to attend a demolition site known as 49 Camden Street, Fairfield in the State of New South Wales ("the incident site") to transport an excavator from the incident site to another work site.

3 Mr Scott reversed the corporate defendant's Mack truck, registration number VZB 777 and its Brentwood lowloader ("the trailer") registration number M21255, into position to load an excavator. Mr Scott lowered the loading ramps attached to the rear of the trailer to the ground using the controls for the hydraulic ram system located under the deck of the trailer on the near-side and towards the rear of the trailer, but in front of the rear axle. Mr Scott drove the excavator up the ramps and onto the deck of the trailer. Mr Scott was seen to dismount from the excavator and then to also dismount from the trailer, before going to the controls for the hydraulic ram system.

4 Some time later, Mr Antoun Abou Antoun, who was working at the site, observed the near-side loading ramp to be in its raised position whilst the off-side ramp was in a lowered position, but raised a little off the ground. Each ramp weighed approximately 448kg.

5 Mr Antoun approached the off-side ramp and when he looked under the ramp, he saw Mr Scott lying on the ground. Mr Scott did not respond to Mr Antoun's calls. As a result of a mechanical failure, the hydraulic ram failed to support the off-side loading ramp, which fell under the influence of gravity, causing Mr Scott to suffer fatal injuries. The incident was caused by the failure of the pin in the sliding mounting bracket that supported the hydraulic cylinder that operated to raise and lower the driver's side of the inclined ramp.

The charges

6 The corporate defendant, in an amended application for order, was charged with a breach of s 8(1) of the Occupational Health and Safety Act 2000 ("OHS Act"), by failing to ensure that on 27 January 2008, at approximately 11.00am at premises known as 49 Camden Street, Fairfield Heights in the State of New South Wales, the health, safety and welfare at work of all of its employees, and in particular, Mr Ronald Scott. The particulars of the charge were:

The particulars of the risk are that:

(a) The health and safety of the defendant’s employee was put at risk of injury from being struck by a loading ramp attached to a low-loader trailer, whilst undertaking the task of raising and/or lowering the loading ramps.

The particulars of the acts or omissions in failing to eliminate the risk are that:

(b) The defendant failed to ensure that plant, namely the Brentwood low-loader trailer registration number M21255 Vin or chassis number TR31596017 (“the trailer”), which was supplied by the defendant for use at work by its employee, Ronald Scott, was safe and without risks to health in that the pin which secured the base of the off-side hydraulic ram to the base pivot point bracket or mounting on off-side of the trailer, and/or the welds that secured that pin in place in its bracket or mounting, failed allowing the ramp to fall under the force of gravity.

(c) The defendant failed to ensure that the trailer, supplied for use at work by its employee, Ronald Scott, was safe and without risks to health in that the defendant failed to replace the pin which secured the base of the off-side hydraulic ram to the base pivot point [or plate] on off-side of the trailer with a pin with an oversized head designed, such as the pin fitted to the base of the near-side ram as at the date of the subject incident, to prevent that pin from being dislodged from its bracket or mounting by the forces associated with the normal operation of the hydraulic ram used to raise and lower that ramp.

(d) The defendant failed to provide and/or maintain a safe system of work with respect to the use and/or operation of the loading ramps (“the loading ramps”) attached to the trailer, including:

i. the operation of the hydraulic rams fitted to the trailer and used to raise and lower the lifting ramps; and/or

ii. the securing of the loading ramps in the travel position.

(e) The defendant failed to ensure that Ronald Scott remained clear of the area beneath the loading ramps when in a raised position;

(f) The defendant failed to provide Ronald Scott with information and training sufficient to ensure his safety at work of and, in particular, sufficient information and training regarding the risks associated with the use and/or operation of the hydraulic lifting rams and the need to remain clear of the loading ramps when in a raised position;

(g) The defendant failed to undertake any or any adequate risk assessment so as to identify and guard against the risk of injury to Ronald Scott associated with the raising and lowering of the loading ramps from the failure of the pivot points and/or the pins used to secure the hydraulic rams to the trailer and to each of the loading ramps when in a raised position;

(h) The defendant failed to undertake any or any sufficient routine inspections of the trailer and/or the loading ramps and in particular, any or any sufficient inspection of the hydraulic lifting system used to raise and lower the loading ramps on the trailer including inspection of the pivot points and pivot pins used to secure the hydraulic rams to the trailer and to each of the loading ramps for the purpose of identifying damage to the pivot points and/or the securing pins, including identification of wear and tear, fatigue and/or weld failure.

As a consequence of the failures and omissions set out above Ronald Scott whilst in the course of his employment with the defendant, was exposed to risk to his health and safety. Further, and as a consequence of the failures set out above, Ronald Scott sustained fatal injuries.

7 Mr Paul Anthony Houghton ("the personal defendant"), was charged by virtue of s 26(1) of the OHS Act of a breach of s 8(1) of the OHS Act in the same terms as the corporate defendant. The personal defendant is the sole director of the corporate defendant. The particulars relied upon were identical to those relied upon in respect of the corporate defendant, with the addition of a particular that the personal defendant was a director of the corporation.

8 Each of the defendants pleaded guilty to the offences charged in the amended applications for order. I am satisfied on the evidence, that the defendants are guilty of the offences as charged, and that it was appropriate for the pleas of guilty to be entered. It follows, therefore, that this judgment is concerned with the question of penalty.

Prosecutor's evidence

9 Mr M Cahill of counsel, who appeared for the prosecutor, tendered an agreed statement of facts, which provided:

Background

5. At all material times Mr Paul Houghton was the sole director, the company secretary and sole shareholder of the defendant.

6. At all material times the defendant was the registered owner of a Mack prime mover, model CHR 92A, registered number VZB 777.

7. At all material times the defendant was the registered owner of a Brentwood triple axle low loader, registered number M 21255.

8. At all material times the defendant conducted a contract trucking business transporting oversize plant and equipment using its Mack prime mover and its Brentwood low loader trailer (“the trailer”), bearing registration number M21255.

9. At all material times the defendant was an employer.

10. At all material times the defendant employed Mr Ronald Scott (“Mr Scott”). Mr Scott commenced employment with the company as truck driver on 27 November 2007, on a 3-month trial basis.

11. Mr Scott was employed to drive the company’s heavy combination vehicle consisting of the Mack truck registered number VZB 777 and the Brentwood low loader registered number M 21255 (‘the heavy combination’).

The Incident

12. Between about 27 January 2008 and 29 January 2008 AKA Demolitions and Excavations Pty Ltd were demolishing a house on a demolition site known as 49 Camden Street, Fairfield in the State of New South Wales (“the incident site”).

13. On or about 27 January 2008 Mr Antoun Abou Antoun (“Mr Antoun”) called the offices of the defendant and placed an order for the transportation of its excavator from the incident site to another work site on 29 January 2008.

14. On 29 January 2008 Mr Scott drove the defendant’s heavy combination to the incident site, arriving at the site between about 9.30 am and 10.00 am on that day.

15. When Mr Scott arrived at the site Mr Antoun, who was operating the excavator owned by AKA Demolitions and Excavations at the incident site, asked Mr Scott to park the defendant’s heavy combination in the street outside the site because he was still using the machine.

16. Subsequently, Mr Antoun finished working with the excavator and told Mr Scott that he had finished working with the excavator.

17. Mr Scott then reversed the defendant’s heavy combination into position on the site.

18. Once the heavy combination was in place on the site, Mr Scott lowered the loading ramps attached to the rear of the trailer to the ground using the controls for the hydraulic ram system located under the deck of the trailer on the near-side and towards the rear of the trailer but in front of the rear axle. Mr Scott then drove the excavator up the ramps and onto the deck of trailer. Once the excavator was in place on the deck of the trailer, Mr Scott was seen to dismount from the excavator and then to dismount from the trailer, before going to the controls for the hydraulic ram system located in front of the rear axle of the trailer.

19. Sometime later, the nearside loading ramp was observed by Mr Antoun to be in its raised position whilst the offside ramp was in a lowered position but raised a little off the ground. At that time, Mr Antoun could not see Mr Scott.

20. Mr Antoun then approached the off-side ramp and when he looked under the ramp, Mr Antoun saw Mr Scott underneath the off-side ramp.

21. Mr Antoun called out to Mr Scott. Mr Antoun observed that Mr Scott neither moved, nor responded to his call.

22. Mr Antoun then called “000” on his mobile telephone to report the incident. However, Mr Antoun had difficulty communicating with the operator.

23. Mr Antoun then crossed Camden Street and entered a pre-school to get assistance in calling the emergency services.

24. Mr Antoun remained outside the pre-school, waiting for the emergency services to arrive, until the police and an ambulance arrived at the incident site. Mr Antoun then went inside the pre-school and remained there until the police came and spoke with him.

25. When the police arrived at the site, it was observed that the dog and chain, used to secure the nearside loading ramp in its upright or travelling position, had not been engaged. The dog and chain on the near side was then engaged so as to secure the near-side loading ramp in its upright, or travelling, position whilst Mr Scott’s body was recovered from under the off-side loading ramp.

26. Mr Scott sustained fatal crush injuries as a result of the incident, including truncal injuries with crush asphyxia.

Investigation of the incident

27. On 29 January 2008, Inspector Mark Morgenthal and Inspector Scott Middleton attended the incident site and made observations contained in a Factual Inspection Report. Attached and marked with the letter “A” is a copy of the Factual Inspection Report of Inspector Morgenthal dated 30 April 2008. Attached and marked with the letter “B” is a copy of the Factual Inspection Report of Inspector Morgenthal dated 19 August 2008.

28. During the course of the inspection at the incident site, Inspector Morgenthal took a number of photographs. Attached and marked with the letter “C” is a copy of the photographs of Inspector Morgenthal dated 29 January 2008.

Inspection of the trailer

29. The trailer was inspected, in situ, on 29 January 2008 by Detective Senior Constable Cameron of the Engineering Investigation Unit of the New South Wales Police Force.

30. In the course of his examination of the trailer, Senior Constable Cameron observed the following:

· the hydraulic ram attached to the offside ramp was separated from the lower pivot point;

· the lower pivot pin was still attached within the lower inner eyelet of the hydraulic ram;

· the lower pivot pin displayed fractured welds in numerous spots around the circumference of the pivot pin at points consistent with welds intended to weld the pivot pin to the lower pivot point mount on the trailer;

· when the lower pivot pin was re-inserted into the lower pivot point mount on the trailer with the off-side end of the pin flush with the off-side of the mount, the fracture welds around the circumference of the lower pivot point pin lined up with the mount;

· the welds on the lower pivot pin were of a poor standard with minimal penetration of the pivot pin;

· the welds did not go around the circumference of the pivot pin; and

· the lower attachment mounting of the off-side hydraulic ram mounting hole was elongated, consistent with excessive play over an extended period of time.

31. Based on his observations, Senior Constable Cameron formed the view that the welding, used to fix the lower pivot pin for the off-side hydraulic ram to the lower mounting plate or bracket attached to the trailer, was of poor quality and that the weld fractured (failed) permitting the lower pivot pin, with the off-side hydraulic ram, to disengage from the lower pivot pin bracket on the trailer. Once the lower pivot pin disengaged from the bracket on the trailer, the off-side loading ramp was no longer supported by the hydraulic ram and it fell under the influence of gravity.

32. Senior Constable Cameron photographed, in situ at the incident site, the prime mover and the trailer. He also photographed his examination of the trailer, including, in particular, the hydraulic system used to lift the ramps. Attached and marked with the letter “D” is a copy of the photographs of Senior Constable Cameron dated 29 January 2008.

33. A further examination of the trailer, together with the offside hydraulic ram, the off-side pivot pin and the lower pivot point mount [or bracket] involved in the subject incident was conducted by Mr Joshua Kent, a mechanical engineer employed by TestSafe Australia.

34. At the time of the examination and testing performed at TestSafe Australia, the subject trailer had already undergone post-incident repairs. In particular:

· the off-side lower pivot point mount or bracket had been cut off the trailer and replaced with a new mount or bracket;

· the old lower pivot mount or bracket had also been partially machined;

· the off-side hydraulic ram had been replaced; and

· a new lower pivot pin had been machined, including an oversized head on the entry side of the mount designed to prevent the pin being “drawn” through the mount.

35. Mr Kent also examined the off-side hydraulic ram and the pivot pin involved in the subject incident. In the course of that examination Mr Kent observed that:

· the original pin, as delivered, had no oversized head;

· the original pin was attached to the original mount by mounting it in a through-hole and fixing it with welds on both sides of the mount; and

· the welding used to fix the original pin in its mount appeared to be of poor quality with low coalescence between the two metals.

36. Based on his examination, Mr Kent concluded that the following matters contributed to the subject incident:

· prior to and at the time of the subject incident reliance on welds to fix in place the lower off-side pivot pin;

· poor welding of the pivot pin;

· failure to detect and/or rectify the subject welding prior to its catastrophic failure on 29 January 2008; and

· the location of the driver below a heavy load that was being supported only by hydraulic pressure at the time of the failure of the welds holding the lower pivot pin in place.

37. Mr Kent also observed that the oversized head of the new off-side lower pivot pin was an improvement in design as the fixation of the off-side lower pivot pin to the trailer mount or bracket is no longer dependent on circumferential welds as was the case at the time of the subject incident. Attached and marked with the letter “E” is a copy of the report of Mr Kent dated 25 November 2008.

38. A further examination of the pivot pin and the bracket or mounting involved in the subject incident was conducted by Dr Azharul Haq PhD, a metallurgical engineer. Upon examination of the pivot pin involved in the subject incident Dr Haq observed that:

· there is clear evidence of welding on both the “entry” and “exit” sides of the pivot pin;

· there is evidence of poor quality welding on the “entry” and “exit” sides of the pivot pin;

· there is evidence of a fatigue fracture on the “entry” side of the pin which took place in a progressive manner over time; and

· following the failure of the weld on the “entry” side of the pin, due to progressive fatigue cracking, the “thin” weld on the exit side would have failed at the time of the subject incident through shear fracture with the pin then sliding out of the mount or bracket on the trailer.

39. Dr Haq also concluded that, due to the dynamic forces placed on the pin as a consequence of the location of the lifting rams on the inner edges of the loading ramps, welding was not the most appropriate choice for fixing the lower pivot pin in place in the mount or bracket on the trailer. Attached and marked with the letter “F” is a copy of the report of Dr Haq dated 28 January 2010.

Maintenance and repair of the trailer prior to the incident

40. Prior to the subject incident, the defendant did not have in place any system for the periodic inspection of the trailer and/or the performance of preventative maintenance.

41. Rather, the defendant had in place a system for the identification and repair of breakages. Those repairs identified by the defendant as the bare minimum necessary for keeping the trailer on the road were performed and no more.

Work procedures and training prior to the incident

42. The defendant provided informal, on the job training to Mr Scott, on an irregular basis, over the first two weeks of his employment.

43. The defendant did not provide Mr Scott with an operator’s manual prepared by the manufacturer of the trailer and/or the manufacturer of the hydraulic system used to move the loading ramps attached to the trailer into position.

44. The defendant did not have in place any form of pre-start or maintenance check sheet for use in conducting safety and maintenance checks of the trailer before it was placed into service each day, or at all. In particular, the defendant did not have in place any system that required a daily inspection of the pivot pins used to secure both the top and the bottom of each hydraulic ram used to raise and lower the loading ramps attached to the trailer.

Changes after the incident

45. On 30 January 2008 the defendant was issued with a Prohibition Notice (No. 150827) which required that the defendant must:

i. immediately cease operating and using the trailer hydraulic ramps; and

ii. develop, implement and maintain a system to ensure that the trailer hydraulic ramps are inspected, cleaned and maintained in a safe operating/working condition according to manufacturer’s requirements.

Attached and marked with the letter “G” is a copy of the Prohibition Notice dated 30 January 2008.

46. Initially, the trailer was delivered to JG Engineering NSW Pty Ltd (“JG Engineering “) to undergo repairs. The repairs performed included replacement of the off-side pivot pin and mounting bracket similar to that previously designed and installed on the near-side of the subject trailer by JG Engineering in about July 2006.

47. On 5 September 2008 the defendant was issued with a number of Improvement Notices (No. 7-166237, 7-166239, 7-166238) with respect to the subject trailer. Attached and marked with the letter “H” is a copy of the Improvement Notices dated 5 September 2008.

48. Subsequently, the defendant ceased to operate the subject trailer.

Prior convictions

49. The defendant has no prior criminal convictions in NSW.

10 An agreed statement of facts, in identical terms was relied upon in respect of the charge brought against the personal defendant.

11 The prosecutor also tendered the following documents:

A. Factual Inspection Report of Inspector Mark Morgenthal dated 30 April 2008.

B. Follow up Factual Inspection Report of Inspector Mark Morgenthal dated 19 August 2008.

C. 23 colour photographs taken by Inspector Mark Morgenthal on 29 January 2008 showing the prime mover and low loader trailer with passenger side ramp raised, the hydraulic piston, the piston ram head with through pin and the hydraulic cylinder.

D. 46 colour photographs taken by Senior Constable Cameron on 29 January 2008 showing similar images to those taken by Inspector Morgenthal.

E. Report of Mr Joshua Kent of TestSafe Australia dated 25 November 2008.

F. Report on Failure Analysis of Pivot Pin, prepared by Dr Azharul Haq of PearlStreet Pty Ltd, dated 28 January 2010.

G. Prohibition Notice (No. 150827) issued by Inspector Scott Middleton to P&D Transport Pty Limited dated 30 January.

H. Improvement Notices (No. 7-166237, 7-166238, 7-166239) issued by Inspector Morgenthal to P&D Transport Pty Limited dated 5 September 2008.

I. ASIC Company Search for P&D Transport Pty Limited.

J. JG Engineering NSW Pty Limited Tax Invoices (no. 2091, 2649, 2943) dated 19 July 2006, 4 March 2008 and 21 November 2008.

12 Counsel also tendered an Australian Securities and Investments Commission Current and Historical Extract dated 16 December 2010, in respect of the corporate defendant.

13 Relevant findings by Senior Constable Cameron, Mr Joshua Kent of TestSafe Australia and Dr Azharul Haq, a metallurgical engineer, and their conclusions are included in the statement of agreed facts at [30] - [39].

Defendants' evidence

14 Mr M Klooster of counsel, who appeared for the defendants, read an affidavit of the personal defendant sworn 14 December 2010, who was required for cross-examination. Counsel also tendered a certificate of divorce between Paul Anthony Houghton and Joy Doreen Houghton dated 16 November 2007, a Centrelink Application for payment of Newstart Allowance made by the personal defendant dated 6 December 2010 and a character reference, undated, of Maurice K Houghton, the father of the personal defendant.

15 The personal defendant is 38 years of age and the sole director and shareholder of the corporate defendant. He completed his school certificate and in 1993 became a qualified plumber at the age of 20. The personal defendant detailed his employment history up to 1997, when he started his own concreting business, known as P & D Concreting Pty Ltd ("P & D Concreting"), which was based at Campbelltown.

16 In 1998, the company purchased a bobcat to enable it to undertake excavation work. The company employed up to six fulltime employees as the business grew. While running the concreting business, the personal defendant operated various forms of machinery, including concrete boom pumps, backhoes, bobcats, excavators, dozers, boom lifts, scissor lifts, water carts and graders. That company has not been charged with any breaches of the OHS Act.

17 In or around 2000, the personal defendant first met Mr Mal Henderson, the owner of Brecon Builders Pty Ltd ("Brecon Builders"). They developed a good business relationship and Mr Henderson began to provide P & D Concreting with a lot of work.

18 By 2002, it became apparent that clients of P & D Concreting required more excavation work as opposed to concreting. Accordingly, P & D Concreting purchased a 20 tonne excavator and a 15 tonne excavator. By the end of 2004, the personal defendant was performing more excavation work than concreting and was advised by his accountant to form a new company, which became the corporate defendant. It was registered on 10 June 2005. At this time, the personal defendant obtained his heavy vehicle driver's licence which enabled him to drive semi-trailers.

19 In 2004/2005, after being married for about three to four years, the personal defendant and his wife purchased their first home for $475,000.

20 In or around 2005/2006, P & D Concreting suffered a downturn in business and the personal defendant's accountant advised him to "let the company go".

21 In or around April 2007, P & D Concreting was placed in voluntary liquidation. Shortly before the company was placed into liquidation, after discussing the matter with his accountant, the personal defendant registered a new company known as P & D Concrete NSW Pty Ltd ("P & D Concrete"). The personal defendant was the sole director and shareholder of this company. The two companies employed three to four fulltime employees and up to 25 subcontractors, as required.

22 On 27 December 2007, the personal defendant was divorced. The personal defendant stated that immediately before the accident, approximately 80 per cent of the work of P & D Concrete was coming through Mr Henderson. The concreting business was doing well. The personal defendant stated that, to the best of his ability, he envisaged the prime mover and trailer, the subject of the incident, were properly maintained and serviced. Various invoices were annexed to the affidavit to demonstrate that the vehicle was serviced and inspected.

23 The personal defendant detailed the training that Mr Scott received when he commenced employment with the corporate defendant. He said that during the first couple of weeks of his employment, he went with him and they performed around four or five jobs together. The personal defendant showed Mr Scott how to use the ramps and after the fifth job, Mr Scott showed the personal defendant that he could operate the ramps using the controls by himself after the personal defendant had driven some heavy machinery onto the trailer.

24 The personal defendant stated that he always told Mr Scott to stay clear of the ramp whenever they were working together. Mr Scott would always keep a safe distance and the personal defendant never saw him ever place himself in "harms way" whilst they were working together.

25 The personal defendant said that the accident had upset him greatly and "still bothers me to this day". Mr Henderson found out about the accident within a week of it occurring and asked to see the personal defendant in his office. The personal defendant got the impression that Mr Henderson did not want anything to do with him, or the company, until the accident had been "sorted out".

26 The personal defendant said that neither P & D Concrete, nor the corporate defendant ever obtained any new work from Brecon Builders through Mr Henderson after the accident. This had a significant impact on the business. The volume of work that Brecon Builders supplied to either company quickly reduced from 80 per cent of each company's total turnover to about 30 per cent within approximately one month after the accident.

27 The personal defendant's manager, Mr G Norris, resigned a couple of months after the accident after being approached by Mr Henderson. Mr Norris took a significant amount of work with him which further affected the business. Within a month after the accident, each company's fulltime staff were reduced to two and each company let most of the subcontractors go as they could not afford to pay them.

28 The personal defendant said that whilst he did not know Mr Scott very well, his death had greatly upset him. The personal defendant had engaged Mr Scott's daughter's boyfriend as a subcontractor concreter for approximately eight months prior to the accident. The personal defendant was close to Mr Scott's daughter and her boyfriend. Mr Scott's daughter had been babysitting the personal defendant's children for approximately six months before the accident.

29 The personal defendant gave Mr Scott's daughter $600 shortly after the accident and also went to see Mr Scott's widow. He attended Mr Scott's funeral and enquired if there was anything that he could do for Mrs Scott and her daughter. A few days after the funeral, the personal defendant went to Mrs Scott's home and gave her $400.

30 In late 2008, the personal defendant returned to Melbourne as he was not receiving any work in either the concreting or excavating businesses. In late 2008, the personal defendant commenced a new relationship with a woman who he had known since school who had three children aged 8, 15 and 17 years of age. The 8 year old suffers from Attention Deficit Hyperactivity Disorder ("ADHD"), mild autism and mild aspergers.

31 The personal defendant said that he borrowed $70,000 from his father to renovate the matrimonial home before it was sold in the divorce settlement. When it was sold, he said he did not receive any money from it as the proceeds went to either the bank, his ex-wife or his father.

32 In 2006, the personal defendant was diagnosed with sleep apnoea. He was re-diagnosed in the latter part of 2010 as having one of the most severe cases. He annexed to his affidavit a medical certificate from the Sleep Disorder Centre to his general practitioner dated 3 June 2010. He is required to sleep with an oxygen mask and said that one of the effects of severe sleep apnoea is partial short term memory loss. As a result of a waterskiing accident in 2001, he cannot perform certain manual labour, for example, moving concrete using a wheelbarrow because of problems with his back.

33 In mid 2008, about six months after the accident, the personal defendant suffered a mental breakdown and was hospitalised in the Shepparton Hospital, Victoria. He stated he saw numerous psychiatrists whilst in hospital and was placed on suicide watch for about two weeks. He has since made a good recovery.

34 The personal defendant said that he moved back to Melbourne towards the end of 2008 with the intention of starting his own concreting business in Melbourne. He actively sought work for the first six months, but was unsuccessful. During this time, he lived off some savings. At the beginning of 2010, he was forced to apply for unemployment benefits. This was the first occasion that he received unemployment benefits other than for a couple of months when he was 21 years of age. He said this has caused him a great deal of embarrassment. He remains on unemployment benefits although he did find some concrete pumping work about six or eight months ago and earned approximately $15,000. He informed Centrelink of this payment.

35 The personal defendant stated that he receives $466 per fortnight from Centrelink. His share of the rent for his current residence is $300 per fortnight. He spends approximately $150 per fortnight on essential expenses, such as food and groceries. He stated that he cannot afford to go out and his current financial position causes him great stress. After these expenses, he has a disposable income of $16 per fortnight from Centrelink. He said that he has been actively seeking work for the past eight months. He has applied for around eight jobs each month for the past eight months and has attended around 15 interviews. To date he has been unsuccessful in obtaining employment. The personal defendant stated that in addition to the money he borrowed from his father to renovate the former matrimonial home, he also borrowed a further $30,000 from his father as an interest free loan in order to pay for legal fees. He owes $60,000 to a hire purchase company for a Ford Harley Davidson motor vehicle that he purchased five years ago. This vehicle was repossessed in 2008. Recently, he had to borrow $6000 from his cousin, Ms Shelly Houghton, in order to pay his legal fees in this matter. This was an interest free loan.

36 The personal defendant annexed to his affidavit a table setting out his current assets and liabilities. His total assets are made up of personal items and household chattels with an estimated value of $5000. His liabilities are estimated to be $166,000. These are made up of an interest free loan from his father of $70,000, a loan for the Ford Harley Davidson motor vehicle, a further loan from his father of $30,000 for legal fees and a loan from his cousin of $6000 for legal fees. He annexed his personal tax return for 2004/2005, which showed a gross income of $93,000. His personal tax return for 2005/2006 showed a gross income of $95,000. He has not submitted any further tax returns.

37 During cross-examination the personal defendant acknowledged that there would have been a maximum 20 operations of the hydraulic system during the 2 week period that he accompanied Mr Scott and gave him training. This assumed that on each occasion there was a drop off and pick up of heavy machinery. The personal defendant accepted it could have been as low as 10 operations during the 2 week training period.

38 The personal defendant agreed that there was a risk that welds might fail and that from time to time welds should be inspected because of the risk of failure. He agreed that prior to the incident, he did not have in place any system of inspection of the brackets, or the pivot pins, or the hydraulic arms that raise the ramps to check if there was evidence of weld failure. The only system that the defendants had in place was a visual walk around the truck. He did not direct Mr Scott's attention to carry out such an inspection.

39 The personal defendant was unable to explain why certain repairs suggested by a mechanic had not been carried out on the vehicle for a period of over five months. However, he disputed that he only carried out repairs to the vehicle and the trailer when it broke down, or parts did not work. He acknowledged that after the incident, the trailer was subjected to an inspection and found to be in need of repair work in respect of the sub frame and the structure because of cracking.

40 The personal defendant accepted that the absence of a system of preventative maintenance and repair contributed to those levels of deterioration of the trailer.

41 The personal defendant said that the company had sold the truck and trailer to a person in Newcastle for around $45,000. He said these were the only assets of the corporate defendant. He agreed that there was no documentation to substantiate the $70,000 loan from his father and that it was a verbal agreement.
42 The personal defendant acknowledged that he had not produced any financial records in respect of the corporate defendant.

43 Mr Maurice Houghton, the personal defendant's father, in a reference relied upon by the personal defendant, stated that his son had always endeavoured to keep his machinery "in tip top condition". He said that he had witnessed his son issuing strict instructions as to the use and care of equipment that employees were operating and if there was any doubt in respect of their understanding, he would spend a lot of time demonstrating what he meant. He further stated that since the tragic accident, his son had been extremely unwell and suffered severe financial difficulties. He said he was emotionally fragile.

Relevant principles

44 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the OHS Act. Their Honours stated at [8] - [15]:

[8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing.

[9] In R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]:

'[I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion.'

[10] The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474 as follows:

'[I]t is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence' ...

[11] The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows:

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

'Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence.'

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

'The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209 - 210) in these terms:

'... reliance on "hindsight" must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to 'ensure ... health, safety and welfare at work' and the decided cases which make plain the nature of the obligation.'

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

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

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

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

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

'[I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c).'

Consideration

45 In accordance with the principles I have set out above, the primary consideration in sentencing requires a determination of the objective seriousness of the offences. This involves examining the nature and quality of the offences, as set out in the agreed statement of facts and the evidence. Without repeating what is contained in the agreed statement of facts, in considering the seriousness of the offences, it is relevant to set out the important matters.

46 The available evidence clearly indicates that, sometime prior to the subject incident, the pivot pin used to secure the off-side hydraulic ram lower arm to the off-side mounting on the low loader had been replaced. The evidence further indicates that:

(i) the "replacement" pivot pin was not designed/fitted with an oversized head designed to prevent the pin from pulling through the anchor point;

(ii) the "replacement" pivot pin was fixed on both the entry and exit points by welding;

(iii) welding was an inappropriate choice for fixing the pivot pin in place; and

(iv) the welding that was performed for the purpose of fixing the pivot pin in place was of poor quality, in any event, with fatigue fracturing taking place, progressively, on the entry side of the pin and the welding on the exit side failing at the time of the incident.

47 By contrast, it is an agreed fact that the near side pivot pin had been replaced in about July 2006 by JG Engineering NSW Pty Ltd. When the near side pivot pin was replaced, it was with a pivot pin that incorporated an oversized head on the entry side of the hydraulic arm fixing point designed to prevent the head from pulling through the anchor point and "fixed" on the exit side with a through bolt or pin.

48 Further, the available evidence, particularly various photographs, indicates that the general state of repair of the trailer was poor.

49 In these regards, it is agreed that, prior to the subject incident, the defendants did not have in place any system for the periodic inspection of the trailer and did not undertake preventative maintenance. (Statement of facts at [40]). Rather, it is agreed, the defendants identified and repaired breakages, with repairs kept to the bare minimum necessary to keep the trailer on the road. (Statement of facts at [41]).

50 Mr Cahill submitted that the subject offences were most serious. Counsel contended that the risk of pivot pin failure was, or should have been, known to the defendants; that the design of the offside replacement pin and the use of welds was inappropriate; that the quality of the welding used to fix the replacement pin was of poor quality and that the fracturing of the welds on the entry side of the pin was progressive (that is, taking place over time) and hence, capable of being identified.

51 In addition, counsel submitted that the defendants were aware, or should have been aware, of a number of simple steps capable of obviating, or reducing the risk of pin failure. These steps were the use of a different design of replacement pin (that is, like the one previously fitted on the near side of the trailer); daily inspection and a proper, routine preventative inspection and maintenance program.

52 Mr Klooster submitted that "on balance, the objective seriousness is moderate at best and high, but not substantially high (ie, on the lower scale end of high) at worst."

53 Counsel conceded that whilst the state of repair of the vehicle was not perfect, various people, many more qualified and experienced than the personal defendant, inspected the vehicle and trailer and failed to notice the inherent risk and danger caused by the faulty welding or failure to fit an oversize head to the pivot pin.

54 Both the vehicle and the trailer were inspected regularly, although not thoroughly, during the three years prior to the accident, with the last inspection occurring five and a half months before the accident. Counsel submitted that there was no evidence to suggest that the personal defendant was actually aware of any inherent risk and simply chose to ignore it. Counsel further submitted that the evidence demonstrates that the personal defendant was completely unaware of any risk.

55 Mr Klooster submitted that the personal defendant had had limited education and was diagnosed with sleep apnoea in 2005/2006. The evidence also discloses that the personal defendant completed Year 10 at High School and then completed a plumbing apprenticeship. I am not persuaded that these factors made it difficult for the personal defendant to detect any foreseeable risk with the trailer, particularly in circumstances where some cracked welding was visible.

56 Mr Klooster conceded that there was no written safe work procedure in place prior to the accident, although he emphasised that there was some informal training provided to Mr Scott. I accept that there is no evidence before the Court that the personal defendant was aware of a serious risk to the health and safety of Mr Scott, but took no action to eliminate the risk.

57 The evidence discloses that Mr Scott was provided with nothing more than a casual informal training and a warning to stay away from the ramps. It was also restricted to four or five jobs. The evidence further discloses that the defendants were aware of the risk in both a theoretical sense and also a practical sense. In my view, the introduction of a preventative maintenance system and a regular maintenance system would have reduced the risk, but not eliminated it entirely.

58 The defendants did not have in place any system for the periodic inspection of the trailer and/or the performance of preventative maintenance in respect of the trailer. To the extent that the defendants had any system in place prior to the incident, it was a system for the identification and repair of breakages.

59 The offences occurred in circumstances where the defendants did not have in place any form of pre start or maintenance check sheet for use in conducting safety and maintenance checks of the trailer before it was placed into service each day, or at all. In particular, the defendants did not have in place any system that required a daily inspection of the pivot pins used to secure both the top and bottom of each hydraulic ram used to raise and lower the loading ramps attached to the trailer.

60 Furthermore, the defendants did not provide Mr Scott with an operator's manual prepared by the manufacturer of the trailer and/or the manufacturer of the hydraulic system used to move the loading ramps attached to the trailer into position.

61 Demolition work is inherently dangerous and the likely consequences of the breaches committed by the defendants were very serious. Mr Scott suffered fatal injuries as a result of being crushed by the ramp. In my view, the risk to safety was readily foreseeable and was foreseen by both the corporate and personal defendant. In my view, the gravity of the risks to safety flowing from the breach was serious. However, I am prepared to take into account the health of the personal defendant, which was advanced as mitigating, to some extent, the otherwise objective seriousness of the offence.

62 Mr Cahill conceded the relative culpability of the personal defendant, in all the circumstances, was significantly less than that of the corporate defendant.

63 Wright J, in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163, observed at [38] - [39]:

[38] Having reached those conclusions in relation to the culpability of the first defendant it is necessary to consider that of the second defendant. The construction and implications of s 50 are relevantly these. First, the level of culpability of a personal defendant who is deemed to have committed the offence by virtue of s 50(1) cannot be greater than that of the corporation who has been convicted or otherwise assumed to be guilty for the purposes of the operation of the section. However, most pertinently for the present proceedings, it must be recognised that the culpability of the personal or individual defendant may be less than that of the corporate defendant. It is not, in my view, a question of considering their relative contribution but assuming that the purpose of the provision is to make an individual who is responsible to an extent for the management of the corporation similarly responsible and culpable for the acts or omissions of the corporation. Although the relevant consideration is not whether, or to what extent, there is a level of contribution as between the corporate and individual defendants for the particular breach of safety which arose under the Act, it is nevertheless necessary when dealing with the precise gravity of the offence committed, or deemed to have been committed by the personal defendant, to accept the possibility or, in many cases where the individual is not simply the alter ego of the corporation, the likelihood that the level of gravity of the offence attributable to the personal defendant may be less than that which has been found to have been committed by the corporate defendant – that is, in these proceedings the first defendant.

[39] In assessing the culpability of the second defendant it is, in my view, important to place particular weight upon the role of the defendant in the management of the corporation and the nature of the gravity of the offence as identified in relation to the first defendant, and to make an assessment in that context of the situation of the second defendant. Any matters of doubt should, generally speaking, be resolved in favour of the defendant: R v Olbrich [1999] HCA 54; (1999) 73 ALJR 1550 at 24 – 28; Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 - 699. Although the second defendant was an important and crucial part of the management of the first defendant, nevertheless he was a manager in the context of a small company which was a family company which was itself managed and run by a highly experienced manager who had many years of experience in the industry, as did those members of the family who preceded him. He was not the alter ego of the company. It would be appropriate therefore to proceed on the basis that although the second defendant would have had a significant role in decision making as to employment and the like and otherwise in the running the first defendant, it could not be assumed that he could make all crucial decisions, or changes to practices, relating to a change in employment policy as to, for example, the qualifications that would necessarily be required of all employees. Therefore, it may be appropriately assumed, and thus found for the purpose of these proceedings, that the system now in place as exemplified by paragraph 21 of the defendants’ submissions was not a matter within the authority of the second defendant. Accordingly, I consider that there is a significant qualitative difference between the culpability attaching to the first and second defendants, although I find that the gravity of all of the offences is serious.

His Honour's observations were approved and applied by Walton J, Vice-President in Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd [2001] NSWIRComm 130; (2001) 105 IR 348 and the Full Bench in Morrison v Powercoal Pty Ltd (No 3) [2005] NSWIRComm 61; (2005) 147 IR 117.

64 In this matter, it is apparent that the corporate defendant is to be properly described as "the corporate alter ego of the personal defendant".

General deterrence

65 As to general deterrence, I consider it is appropriate in the case of both defendants to once again draw attention to the need for employers and contractors in the trucking, demolition, building and construction industry, particularly small to medium sized employers and contractors, to be constantly vigilant of the need to ensure that employees are not exposed to risks to their health and safety through operating and transporting heavy machinery which is not regularly inspected and checked for the risk of failure. Such machinery should be the subject of periodic inspections with preventative maintenance systems put in place so that the risk of serious injury and/or death is substantially reduced. Mr Scott was part way through a probationary period. He was exposed to serious risk to his safety by the failure of his employer to implement adequate and appropriate safety measures. I therefore include an element in the penalty for general deterrence.

Specific deterrence

66 In relation to specific deterrence, although the corporate defendant is no longer in operation, it remains a registered corporation. However, it has no machinery. The personal defendant is in receipt of Centrelink benefits and on the evidence, plays no part in the operation of the corporation. This is therefore not a case which calls for the imposition of some additional punishment aimed at deterring the defendants from further offending against the OHS Act and/or for the purpose of compelling their attention to occupational health and safety issues.

Subjective factors

67 Mr Cahill conceded that each defendant entered a plea at an early stage and were therefore entitled to the 25 per cent discount as outlined in R v Thomson; R v Houlton (2000) 29 NSWLR 383 for the utilitarian value of a plea of guilty.

Remorse and contrition

68 Section 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 ("CSP Act") provides that "remorse" may be taken into account as a mitigating factor if and only if:

(i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and

(ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both)

69 In Cahill v State of New South Wales (Department of Community Services) (No 4) [2008] NSWIRComm 201; (2008) 182 IR 231, Boland P stated at [62]:

[62] A simple expression of contrition or remorse by a representative of a corporate offender, no matter how senior the representative, is not enough to enable the Court to find that the offender is remorseful: As Cummins J said in DPP v Esso Australia Pty Ltd [2001] VSC 263; (2001) 124 A Crim R 200, "personal expressions of remorse need to be translated into reality". See also see Regina v Heip Tan Nguyen [2004] NSWCCA 438 per Bell J (Hidden and James JJ agreeing) at [21]. There must be evidence that the offender has accepted responsibility for its actions and also that the offender has acknowledged any injury, loss or damage caused by its actions or that it has made reparation for such injury, loss or damage (or both).

70 The evidence establishes that the personal defendant had a close relationship with the deceased's daughter and her boyfriend prior to the accident and gave financial and moral support to the deceased's daughter and widow immediately after the accident. Whilst the financial assistance provided by the personal defendant was modest, it has to be assessed against the personal defendant's financial position at the time. The personal defendant accepted responsibility for his actions as demonstrated by the early plea of guilty and the financial assistance provided to the deceased's daughter and widow. I propose to take the personal defendant's remorse and contrition into account in sentencing.

Previous offences

71 It was common ground that neither the personal defendant, nor the corporate defendant have any prior convictions and as such are entitled to leniency as "first offenders" pursuant to s 21A(3)(e) of the CSP Act. The personal defendant has been operating in the concreting industry and using a bob cat and other heavy machinery since 1998. He obtained a heavy duty vehicle licence in 2002/2003. The corporate defendant was registered in May/June 2005.

72 The TestSafe report, referred to earlier in this judgment, identified that the accident occurred due to the failure of the pin in the sliding mount bracket that supported the hydraulic cylinder that was operated to raise and lower the driver's side ramp.

73 Counsel for the defendants pointed to the contributing factor that "the location of the hydraulic cylinders on the inside of the ramp, which imparts a bending moment on the pin with the resulting forces being greatest at the weld connecting the pin to the sliding bracket" as being an inherent design flaw and that no blame should be attributed to the defendants in this regard.

74 The contribution of other parties to an offence is a matter to be weighed in the consideration of the objective seriousness of the offence: WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited [2000] NSWIRComm 277; (2000) 95 IR 383 at 434 and 437 and WorkCover Authority of New South Wales (Inspector Farrell) v David Carl Schrader [2002] NSWIRComm 25; (2002) 112 IR 284 at [61]. The design flaw may have contributed in a minor way to the risk. I accept such a contribution gives rise to a minor mitigation in respect of the offences.

75 Mr Klooster also submitted that the actions of the deceased in placing himself under the ramp should result in some blame being attributed to his actions.

76 In WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd [2001] NSWIRComm 50; (2001) 105 IR 81, Walton VP and Boland J, (Kavanagh J dissenting) stated at [45] - [46]:

[45] The duty to provide a risk free work environment is a duty owed not only to the careful and observant employee but also to the hasty, careless, inadvertent, inattentive, unreasonable or disobedient employee in respect of conduct that is reasonably foreseeable: Dunlop Rubber Australia Ltd v Buckley [1952] HCA 72; (1952) 87 CLR 313 at 320; McLean v Tedman [1984] HCA 60; (1984) 155 CLR 306 at 311 – 312 and WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248.

[46] We agree with the conclusions of the Full Bench in Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 [at 15] as follows:

The magistrate appears to have reached her conclusion as to the objective seriousness of the offence, having regard to the lack of common sense of the injured worker. It is reasonably clear from her decision that it was concluded that the conduct of the injured worker effectively removed or minimised the liability of the respondent in relation to the lack of training or instruction afforded the employee. This was wrong in principle. Section 15 of the Occupational Health and Safety Act requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 at 257:

"Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connections. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. The Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry."

(See also WorkCover Authority of NSW (Inspector Hopkins) v Profab Industries Pty Ltd [2000] NSWIRComm 142; (2000) 49 NSWLR 700 at 722).

77 Applying these principles, there is no basis to conclude that the conduct of Mr Scott minimised the liability of the defendants. However, as the Full Bench observed, such matters may reflect on the degree of culpability of the employer for the purpose of sentence.

Changes in circumstances after the accident

78 Emotional problems provoking difficult circumstances are acceptable within the sentencing process as a mitigating factor: WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited; WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462; Department of Mineral Resources v Berrima Coal; Inspector Stephen Cooper v Franklin Alden Coveney [2008] NSWIRComm 80; Inspector Melissa Chaston v Sacco Builders Pty Ltd [2008] NSWIRComm 152.

79 As I have already observed, the personal defendant suffers from sleep apnoea, which was diagnosed prior to the incident. This has been exacerbated due to the stress placed upon the personal defendant as a result of the accident. Such stress eventually led to the personal defendant suffering a mental breakdown, resulting in him being institutionalised for two weeks, approximately six months after the accident.

80 I agree with Mr Klooster's submission that the personal defendant's reaction to the accident is a clear indication of both his personal knowledge of its seriousness and his genuine remorse and contrition.

81 Equally, the significantly adverse changes to the personal, business and professional circumstances of the defendants which arose as an aftermath of the incident are acceptable as mitigating factors: Department of Mineral Resources v Berrima Coal (at [202]).

82 It is clear that the combination of the result of the accident and the personal defendant's divorce and property settlement significantly contributed to the collapse of his business and personal life. The deterioration of the personal defendant's business is demonstrated by his earning capacity prior and subsequent to the accident. The personal defendant was earning $94,000 gross on average in 2005/2006 and is now unemployed and on social security benefits. The deterioration in the personal defendant's business was directly caused by the accident as the business stopped receiving work from a substantial client that used to provide up to 80 per cent of the overall business. After the accident, this quickly reduced to 30 per cent, forcing a reduction in staff numbers. Key staff also left the business as a result of the accident. The cumulative effect was that the business ultimately folded.

Capacity to pay

83 Mr Klooster submitted that the personal defendant was impecunious. I have already set out the personal defendant's current financial position. He is in receipt of Centrelink payments. Although Mr Cahill submitted that there were no financial records of any substance produced that informed the Court in respect of the disposal of the company's assets, or the assets of the personal defendant. However Centrelink benefits are means tested. I therefore propose to draw an inference that the personal defendant has no significant assets. He has had to borrow money from his family in order to defend these proceedings. However, the corporate defendant is in a different position. No records were produced in respect of the corporate defendant.

84 The principles to be applied in respect of an application under s 6 of the Fines Act 1996, were discussed by me in Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100 at [57] - [58]. In that matter, I referred to the judgment of Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader, where his Honour observed:

[83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50):

'It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as [2002] NSWIRComm 25; (2002) 112 IR 284 at 309 far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.'

[84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82):

'... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76).

However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed:

'... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. ......

When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ...'

[85] I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476:

'Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86.'

(See also WorkCover Authority (NSW) (Inspector Hopkins) v Michael Wheritt t/a M J Wherritt Concrete Pumping Services [2002] NSWIRComm 16 at pars 59-60.)"

85 The Full Bench in WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363 reviewed various judgments where s 6 of the Fines Act was considered and observed at [35]:

[35] The relevant principles in relation to the application of s 6 of the Fines Act have been collected in a number of decisions in this jurisdiction. We adopt those principles in this judgment: Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209; Department of Mineral Resources of NSW (Chief Inspector Terrey) v A M Hoipo & sons Pty Ltd (2000) 99 IR 137 at [48] - [51]; Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of NSW (Inspector Glass) [2001] NSWIRComm 190; (2001) 106 IR 435 at [56] - [57], [67], [81] - [83]; Inspector Green v Camilleri Properties Pty Limited at [21]. Applying these principles, we do not consider that there is any proper basis for the application of s 6 of the Fines Act in this case.

86 Having regard to the above authorities, the relevant means of the personal defendant and having considered both the personal defendant's affidavit evidence and evidence during cross-examination, I propose to exercise the discretion conferred upon me by s 6 of the Fines Act. I therefore shall significantly reduce the amount of fine which would have otherwise been ordered to be paid by the personal defendant due to the personal defendant's impecuniosity.

87 The defendants are also entitled to some leniency in that they have no prior convictions under the OHS Act and co-operated fully with the WorkCover Authority of New South Wales ("WorkCover") during its investigation.

Costs and moiety

88 Mr Cahill sought costs and a moiety. Mr Klooster referred to the decision of the Full Bench in Inspector Yeung v Donald Edwin Wilson t/as Wilson's Tree Service [2005] NSWIRComm 158; (2005) 143 IR 187 and submitted that the total fine and costs order must be an "acceptable total", or "just and reasonable".

89 In Inspector Yeung v Wilson, the Court considered the relevant provisions of the Fines Act, s 253 of the Criminal Procedure Act 1986 (which provides that the Court may order payment of costs), s 21A of the CSP Act and s 181 of the Industrial Relations Act 1996, which provides this Court with power to order costs. The Full Bench observed at [122]:

[122] Relevantly, a “fine” in the Fines Act is defined to include any costs order (including expenses or disbursements) payable by a person under an order made by a court in proceedings for an offence that were brought by a law enforcement officer.

90 After referring to the judgment of Pearlman J in Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd [2003] NSWLEC 156; (2003) 128 LGERA 287 at [8] and a statement by Lord Bingham CJ in R v Northallerton Magistrates' Court; Ex Parte Christopher John Dove [2000] 1 Cr App Rep (S) 136 at [4], the Full Bench stated at [131] - [133]:

[131] ...We consider the approach of Lord Bingham preferable to this approach.

[132] Section 6 of the Fines Act allows consideration of the financial situation of the respondent in the court's consideration as to the appropriate costs order. Pearlman J reasoned a costs order must be "just and reasonable". Lord Bingham CJ defined the test as an "acceptable total". While the power exists to consider the financial circumstances of a respondent in both penalty and costs the overall result must comply with the test of "just and reasonable".

[133] ...In accordance with established principle, the court must make its determination in accordance with s 6 of the Fines Act. The court must also set the appropriate penalty for the offence giving proper weight to the objective seriousness of the offence. The court must then determine the appropriate costs order. Such a consideration, in our view, may also take into account the financial situation of the defendant. In so ordering the court must then determine that the total fine and costs order be an "acceptable total" or as otherwise said "just and reasonable". If the total penalty and costs order is viewed by the court to be excessive the court must make an appropriate adjustment to the costs order. The total must not be disproportionate to the offence...

91 I propose to be guided by these principles in determining penalty and costs in respect of the personal defendant.

92 Mr Klooster drew the Court's attention to what he described as comparative cases.

93 It has been held on a number of occasions by this Court and the Supreme Court of New South Wales, Court of Criminal Appeal that comparisons with sentences passed in other cases is not helpful. In WorkCover Authority (NSW) (Inspector Mason) v Wild Geese Building and Maintenance Group Pty Ltd [2006] NSWIRComm 350; (2006) 157 IR 313, the Full Bench observed at [38]:

[38] Nothing in her Honour's judgment explains how this very serious offence resulted in a penalty of less than five per cent of the maximum available. While the appellant argued that the explanation must be that too much weight was given to subjective matters, that is not apparent from her Honour's judgment. We consider that there are real difficulties in comparing penalties imposed under the Occupational Health and Safety Act, even in cases where there is an essential common feature, such as a falling incident, crushing incident etc, because of the myriad of differing surrounding factual circumstances in the cases. Nevertheless, while we do not foreclose the outcome in any particular case, we find it difficult to conceive of any case involving a fall of over five metres, in the absence of any fall protection equipment, which results in serious injury or the potential for such injury, where a fine of the present magnitude could properly be the result (see, for example, Inspector Guillarte v Trustees of De La Salle Brothers [2004] NSWIRComm 49; WorkCover Authority of New South Wales (Insp Hopkins) v Red Lea Chickens Pty Ltd and Magg Transport and Packing Pty Limited [2003] NSWIRComm 71; Inspector Glass v B T Engineering Pty Ltd as Trustee of the Bruce Thomas Family Trust [2004] NSWIRComm 245; and Inspector Dubois v Masters Civil Pty Ltd and Anor [2006] NSWIRComm 180 - only the last of which was the subject of an appeal (which was unsuccessful: Masters Civil Pty Limited v Inspector Dubois [2006] NSWIRComm 332))

See also Nelmac Pty Ltd v Franke (Inspector) [2006] NSWIRComm 100; (2006) 151 IR 63; Inspector Jelley v Albright & Wilson (Australia) Limited [2007] NSWIRComm 148; (2007) 164 IR 456.

94 The maximum penalty in respect of the corporate defendant is $550,000. The maximum penalty in respect of the personal defendant is $55,000. Taking into account the appropriate seriousness of the offences, the subjective factors referred to earlier and the financial position of the personal defendant, I impose a fine of $5000 on the personal defendant. I impose a fine of $100,000 on the corporate defendant. In respect of the question of costs, the Court is entitled to take into account the financial situation of the personal defendant.

95 I have decided, noting that the purpose of costs is not a punishment, that the personal defendant will pay 15 per cent of the prosecutor's costs. In my view, the total fine and costs order in respect of the personal defendant represents a just and reasonable order.

ORDERS

96 I make the following orders:

Matter No IRC 59 of 2010

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

2. The personal defendant is convicted of the offence, as charged.

3. The personal defendant is fined an amount of $5000 with a moiety thereof to the prosecutor.

4. The personal defendant shall pay 15 per cent of the prosecutor's costs of the proceedings.

Matter No IRC 63 of 2010

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

2. The corporate defendant is convicted of the offence, as charged.

3. The corporate defendant is fined an amount of $100,000 with a moiety to the prosecutor.

4. The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

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LAST UPDATED:
30 December 2010