Industrial Relations Commission of New South Wales in Court Session CITATION : Workcover Authority of New South Wales (Inspector Mansell) v Hayman Industries Pty Ltd [2003] NSWIRComm 154 PROSECUTOR: Inspector Mansell PARTIES : DEFENDANT: Hayman Industries Pty Ltd FILE NUMBER: IRC 3375 of 2002 CORAM: Staunton J CATCHWORDS : Occupational health and safety - plea of guilty - failure to adequately maintain press - dispute taken by defendant over causal factor identified in agreed facts - conflicting evidence of like probability not established - objective seriousness of offence - general and specific deterrance - financial circumstances of the defendant - erosion of utilitarian value of early plea- prior conviction of similar type but differing factual background - penalty imposed LEGISLATION CITED : Occupational Health and Safety Act 1983 Nesmat Pty Ltd v Workcover Authority of New South Wales [1998] 87 IR 312 Camilleri's Stockfeeds Pty Ltd v Environment Protection Authority [1993] 32 NSWLR 683 CASES CITED : Lawrenson Diecasting v Workcover 90 IR 464 Capral Aluminium Ltd v Workcover Authority of New South Wales (Inspector Mayo Ramsay) [2000] 49 NSWLR 610 Benbow v Converquip Pty Ltd [2001] 106 IR 258 HEARING DATES: 02/28/2002; 04/03/2003 DATE OF JUDGMENT: 05/19/2003 PROSECUTOR: Mr Docking of counsel SOLICITORS: Phillips Fox (Gordon Henderson) LEGAL REPRESENTATIVES: DEFENDANT: Mr Mario Quintiliani of counsel SOLICITORS: Kells the Lawyers JUDGMENT: - 14 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM : Staunton J 19 May 2003 Matter No. IRC 3375 of 2002 Workcover Authority of New South Wales (Inspector Mansell) v Hayman Industries Pty Ltd Prosecution under s16(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2003] NSWIR Comm 154 1 The defendant conducts a business of metal trade manufacturing. As part of that business it owned and operated at its premises a John Heine 208AG Series One Power Press (the Press) referred to as a pole press. 2 In addition to its full time workforce, and as required, the defendant contracted with Daly Smith Corporation (Australia) Pty Ltd for the provision of labour hire workers. As part of that contract, the Daly Smith Corporation provided the services of Mr Steven Rowe to be engaged as a process worker and press operator at the premises of the defendant. 3 On 30 June 2000 at approximately 4:30pm, Mr Rowe was operating the Press at the defendant's premises, undertaking a task referred to as stamping out and removing pole caps. In the course of that procedure, Mr Rowe lost four fingers of his left hand when the die of the Press closed and crushed his left hand against the die block. 4 As a result of that accident a prosecution was laid by Inspector Mansell, an authorised prosecutor for the purposes of the Occupational Health and Safety Act 1983 (the Act) on behalf of the Workcover Authority of New South Wales. 5 The defendant entered a plea of guilty to the offence as charged on 3 October 2002. 6 The offence involves a breach of s16(1) of the Act in that the defendant: Failed to ensure that persons not in its employment were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at its place of work. Particulars of the Defendant's breach are as follows: (a) It failed to provide adequate warnings and/or information to persons not in its employment about the risks involved and safety precautions to be utilised while operating a John Heine 208AG Series One Power Press (Press); (b) It failed to provide adequate instructions and training to persons not in its employment in relation to the operation of the Press; (c) It failed to provide adequate supervision to persons not in its employment operating the Press; (d) It failed to carry out an adequate assessment of the hazards of operating the Press; (e) It failed to ensure adequate guarding of the die area of the Press; (f) It failed to adequately maintain the Press; (g) As a result of the Defendant's breach, Steven Rowe suffered serious injuries. 7 As part of these proceedings an agreed Statement of Facts relevantly disclosed: (1) At all material times the Defendant, Hayman Industries Pty Limited (ACN 000 220 771): (a) Was an incorporated company with its registered office located at 79B Gow Street, Padstow in the State of New South Wales (Defendant); (b) Conducted the business of metal trade manufacturing and the wholesale provision of horse-shoes and equestrian supplies at the premises; (c) Employed Kevin Zammit (Zammit) as a consultant; (d) Owned and operated a John Heine 208AG Series One Power Press, also referred to as the Pole Press, at the premises (Press); and (e) Contracted with Daly Smith Corporation (Australia) Pty Limited (ACN 003 722 601) (Daly Smith Corporation) for the provision to it of the services of Mr Stephen George Rowe (Rowe) as a process worker and press operator at the premises. (2) On 30 June 2002, at approximately 4.30pm, Rowe was operating the Press at the premises, stamping out and removing a pole cap. Rowe sustained injuries when the die of the Press closed and the top die crushed his four fingers of his left hand against the die block. As a result, Rowe sustained a serious injury to his left hand in which his left four fingers were completely severed. (3) Rowe was transported to Bankstown Hospital and was later transferred to Liverpool Hospital where he underwent microsurgery. (4) On 30 June 2000, a verbal notification of the accident was received via email by WorkCover Hurstville Office from Zammit. (5) On 3 July 2000, the Prosecutor attended the premises and observed as follows: (a) A storage area located in the rear of the premises; (b) A John Heine 208AG Series One Power Press located within the storage area; (c) The Press measured 4m high x 1.4m wide x 2.4 deep; (d) The Press was the only press of that size on the premises; (e) The bed or anvil of the Press was 1.09m from the floor; (f) The bed of Press measured 1m wide x 700mm deep; (g) The die was at rest (TDC) with a 120mm gap between the top and bottom die plates; (h) The bottom die was 150mm above the bed surface of the Press; (i) The top die was 200mm from the top plate; (j) A distance of 470mm between the bed of the Press and the top plate; (k) The die measured 400mm from the die guard to the area where Rowe reached in; (l) On-off controls were located to the right of the operator's position and fixed to the right side of the guard structure and was located 1.5m above the floor; and (m) A roving foot control was positioned on the floor to the right hand side front of the Press. (6) A report was submitted to the Defendant from Mr Pat Citroni of John Heine & Son Pty Limited dated 20 July 2000. Point 2 of this report indicated the gap in the front guard increased to a maximum of 100mm during his tests. Point 4 of the report stated that the: 'Press has standard single and continuous stroking air treadle (foot pedal) system. That is, if pedal is kept depressed, the clutch will stay engaged and continue operating and the die gates stay closed.' (7) As a result of his observations and investigations in this matter, the Prosecutor found as follows: (a) The injury occurred because the Press operated by Rowe was poorly maintained; (b) The Press was out of adjustment so that the Press would stroke on a power stroke with the front rise and fall guard open to a distance of approximately 77mm; (c) Rowe had pressed a pole cap and his foot hit the pedal again as the guard was being opened which caused a cycle to commence and the stroke was completed while his hand was within the die area, before he could withdraw the pressed component; (d) An operator of the Press had to be very careful when opening the guard and releasing the pedal as the linkages back to the clutch from the guard were worn to the extent that a 100mm gap would see the Press continue to stroke. If the operator opened the guard while still on the pedal, the Press continued through the stroke as once the stroke had commenced it must complete the stroke; (e) The Defendant advised and assured Rowe that the press would not stroke if the guard was open; (f) A new valve set up was fitted onto the control pedal which permitted only a single stroke action of the Press. This meant that a separate activation of the foot pedal was required for each stroke; (g) Rowe had never operated a power press prior to commencing work at the premises approximately 6.5 weeks prior to his accident; (h) Rowe received inadequate instruction and training concerning the operation of the Press; (i) Rowe received inadequate supervision while operating the Press; (j) Neither the Defendant nor Daly Smith Corporation carried out an adequate assessment of the hazards of operating the Press; (k) Daly Smith Corporation failed to make adequate enquiries concerning Rowe's suitability for the tasks he carried out for the Defendant; (l) Daly Smith Corporation failed to make adequate enquiries concerning the tasks that Rowe would be required to carry out for the Defendant; and (m) The die area of the Press was not adequately guarded at the time of Rowe's accident. (8) On 3 July 2000 the Prosecutor issued to the Defendant Prohibition Notice No 108155 to prevent the Press from being used to produce any further items until it was repaired so that the Press would not stroke other than when the guard was fully closed. (9) On 3 July 2000 the Prosecutor issued to the Defendant an Improvement Notice No 215807 requiring it to provide and maintain suitable guards around the die area of the Press. (10) It is alleged that the Defendant, an employer, breached Section 16(1) of the Occupational Health & Safety Act 1983 on 30 June 2000 at the premises in that failed to ensure that persons not in its employment were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at its place of work. Particulars of the Defendant's breach are as follows: (a) It failed to provide adequate warnings and/or information to persons not in its employment about the risks involved and safety precautions to be utilised while operating a John Heine 208AG Series One Power Press (Press); (b) It failed to provide adequate instruction and training to persons not in its employment in relation to the operation of the Press; (c) It failed to provide adequate supervision to persons not in its employment operating the Press; (d) It failed to carry out an adequate assessment of the hazards of operating the Press; (e) It failed to ensure adequate guarding of the die area of the Press; (f) It failed to adequately maintain the Press; (g) As a result of the Defendant's breach, Rowe suffered serious injury. 8 It would be clear on a reading of the facts and circumstances of this matter that, in addition to the defendant, there are other corporate and personal defendants caught up in prosecution proceedings concerning this matter. In those proceedings involving the Daly Smith Corporation and Mr Thomas Smith as a director of the said corporation, the defendants have entered a plea of not guilty. 9 In addition to the agreed Statement of Facts the prosecution tendered a number of photographs identifying the Press that was involved in the accident with Mr Rowe. Those photographs assisted me in understanding the nature of the Press and its operations as described in evidence before me. 10 As a result of investigations undertaken, the major causal factors in the accident as far as the actual operation of the Press was concerned were identified by Inspector Mansell as: · The Press operated by Mr Rowe was poorly maintained. · The Press was out of adjustment so that the Press would stroke on a power stroke with the front rise and fall guard open to a distance of approximately 77mm; · Mr Rowe had pressed a pole cap and his foot hit the pedal again as the guard was being opened which caused a cycle to commence and a stroke was completed while his hand was within the die area and before he could withdraw the pressed component; · An operator of the Press had to be very careful when opening the guard and releasing the pedal as the linkages back to the clutch from the guard were worn to the extent that a 100mm gap would see the Press continue to stroke as happened here it would seem. If the operator opens the guard while still on the pedal, the Press continued through the stroke, as once the stroke had commenced it must complete the stroke. 11 The above causal factors identified by Inspector Mansell were incorporated into the agreed Statement of Facts before me. 12 On behalf of the defendant the following affidavit material was tendered without objection: · Two affidavits from Mr Graham Thomas Bagley, the Finance and Administration Director of the defendant. The first affidavit of Mr Bagley was sworn on 26 February 2003 and the second on 14 March 2003. · An affidavit of Mr Christopher Welch, Public Accountant, the defendant's external accountant and auditor since 1975. Mr Welch's affidavit evidence went to the defendant's current financial structure, including its assets and liabilities. · A video produced by the defendant showing the 208AG Power Press in operation and changes made to the front guard of the machine post the accident. 13 When this matter proceeded before me, it became contentious when the defendant took issue with aspects of the agreed Statement of Facts, particularly those matters contained in para [7] of those agreed facts. While counsel for the defendant consistently maintained that the defendant did not take issue nor seek to cavil with the entry of the plea of guilty nor indeed with the agreed facts, the defendant nevertheless persisted in wanting to place evidence and submissions before the Court having regard to the factual information contained in para [7] of those agreed facts. 14 The essence of the point raised by the defendant went to the statement in para [7](b) of the agreed facts that the Press would stroke 'with the front rise and fall guard open to a distance of approximately 77mm.' On that point, counsel for the defendant pointed to the report prepared for the defendant by Mr Pat Citroni of John Heine & Son Pty Ltd shortly after the accident. In that report, following a visual inspection of the Press, Mr Citroni stated (amongst other things): Interlock was in working order, but clutch was able to operate with 2½" gap between upper and lower gates. During operation the gap increased to 4". (my emphasis) 15 Counsel for the defendant submitted that the factual material before me indicated that the Press, at its highest, would stroke when the gap between the rise and fall guard was no greater than 77mm in the case of Inspector Mansell's observations or 4" (100mm) in the case of Mr Citroni's inspection. 16 Given that evidence, it was submitted there was a significant inconsistency with those factual observations when read against the statement of Mr Rowe, the worker injured in the accident. In Mr Rowe's statement which was placed before the Court without objection, the following words appear: I grabbed the pliers with my right hand and used my left to remove the pole cap. The safety gate was opened at its fullest. (my emphasis) 17 The defendant stated that there was no explanation nor anything contained in the facts before me that suggested that the Press would stroke when 'the safety gate was opened at its fullest' as stated by Mr Rowe. In other words, it was submitted, it was not possible to say exactly what caused the accident if one was to accept Mr Rowe's statement that 'the gate was opened at its fullest' and compare that against the evidence of Inspector Mansell that the Press stroked when the guard was opened to a distance of 77mm and Mr Citroni's statement of 4" (or 100mm) beyond which, on the evidence before me, it would not stroke. 18 This disputed contention raised by the defendant somewhat at the last minute in the initial proceedings before me, caused the matter to have to go over to a second day of hearing while the defendant called additional expert evidence from Mr Citroni as to the optimum distance or gap between the rise and fall guard of the Press at which the Press would stroke. 19 Mr Citroni is the Service/Spare Parts Manager for John Heine & Son Pty Ltd. They are the manufacturers of the 208AG Power Press that was involved in the accident with Mr Rowe. It was John Heine & Son who had the contract with the defendant at the time of the accident to maintain the Press, amongst others, in working order. Following the accident involving Mr Rowe on 30 June 2000, Mr Citroni undertook a visual inspection of the 208AG Press and provided a brief report to the defendant dated 20 July 2000 in the following terms: Please find following, a brief report on what I found on your 208AG Series 1 Press. This is based on a visual Inspection carried out with you and Cyrix Tipping on the operation of the clutch and die guard. 1. Die guard is early model type, which has upper and lower front gates, and manually closes before operation of clutch is allowed. 2. Interlock was in working order, but clutch was able to operate with 2 ½ " gap between upper and lower gates. During operation the gap increased to 4". 3. Camplate was not retracting completely after clutch disengagement. A gap of approximately ½" was between gearwheel boss face and camplate. This gap was insufficient to allow clutch to engage automatically. 4. Press has standard single and continuous stroking air treadle system. That is, if pedal is kept depressed, the clutch will stay engaged and continue operating and the die guard gates stay closed. 20 The above report was an annexure to the initial affidavit of Mr Graeme Bagley and was part of the documentary material that was before me on the first day of hearing this matter. Following the adjournment requested, the defendant produced a second affidavit from Mr Bagley to which was annexed a more detailed report from Mr Citroni which sought to elaborate upon the brief report already referred to in para [19] above. 21 Mr Citroni's additional report was dated 12 March 2003. It is not my intention to repeat it in toto for the purposes of this judgment. Suffice to say that relevant extracts of it are as follows: Further to paragraph 2 of my report on inspection of the 208AG Power Press, I observed that guards had to be brought within 2 ½ inches of the fully closed position before the interlock block or bar would allow the camplate to move across to the engaged position and allow a Press cycle to commence. In other words the machine could not be reactivated if the bi-fold guards were open any more than a distance of 2 ½ inches or 62mm. and: However during the Press cycle or operation of the Power Press, that is (when the camplate is in the engaged position) the die guard could be forced to open to a maximum of 4 inches or 100mm by causing the backlash in the linkage mechanism to be compressed. On my investigation, if this die guard position were to be maintained at 4 inches until the Press cycle was completed, at completion of the cycle the camplate would still disengage, and the interlock block would engage to prevent the Press from stroking again. At all times the interlock was functioning in the designed manner and would return to its position. On my inspection I observed that in order for the clutch to re-engage and allow the Press to stroke again, the die guard would need to be closed to within 2 ½ inches or 62mm of the fully closed position. and further: Finally I wish to confirm the results of my inspection of the 208AG Series 1 Power Press as contained in my report of 20 July 2000 indicated that whilst the Press could be operated if the die guards remained open to a gap of 62mm, the die guards could not open more than 100mm until the Press had completed the cycle and the interlock block had re-engaged. I did not, and do not consider that the original bi-fold guards were defective in design or in function (apart from the adjustment and wear in the linkage system) 22 What Mr Citroni's further report confirmed, but in more detail perhaps, was what he had already stated in his earlier report. That is, based on his inspection, the maximum distance the guard could be opened and the Press would stroke was 4" or 100mm. 23 Also included as part of Mr Bagley's affidavit material as an annexure to Mr Citroni's further report was a Bulletin that had been printed by John Heine Pty Ltd titled Press Die Guards. As Mr Citroni's report stated: In order to further assist you I have enclosed pertinent copies of the installation manual concerning the bi-fold guards. 24 That installation manual provided by Mr Citroni to Mr Bagley only further demonstrates the inadequacies of the particular Press being operated by Mr Rowe in June 2000 as far as the proper maintenance and operation of that machine is concerned. For a start, at the beginning of that installation manual, the following words appear in large, bold type: GUARDING OF MACHINES The Power Press has been recognised for many years as being one of the most dangerous machines used in industry. Records clearly indicate that many serious accidents are still occurring due to persons' hands being trapped between the tool and die, resulting in severe mutilation of the fingers or hand. It is essential for the safe operation of Power Presses that both the employer and employee should recognise the hazards connected with their use. 25 As well, in a part of those installation instructions the following words with their attendant emphasis appear in relation to the die guards: The camplate interlock should prevent the treadle from operating the clutch mechanism until the Guard is COMPLETELY CLOSED . 26 Further, in the instruction manual, under the heading Construction and Purpose of Guards used on Power Presses, it states: Power Presses must be safe by construction, or alternatively, must be securely fenced. A vital factor in the prevention of accidents on Power Presses is the effective maintenance of both the Press operating mechanism and the guard mechanism, both of which must be kept in a sound working condition. Many accidents are attributed to the lack of maintenance of guards and by reason of Press mechanism defects, such as worn parts of the clutch mechanism. (my emphasis) The guard covering the tool, die and ram must be so constructed to allow adequate vision of the work area, but at the same time openings must be restricted in size so that the tip of one's finger cannot reach the danger zone. 27 Notwithstanding the issue raised by counsel for the defendant that the distance at which point the Press would stroke was inconsistent with the statement made by Mr Rowe does not, it seems to me, assist the defendant as far as creating some mitigating factor to the offence before me - particularly having regard to the particulars of the offence to which the defendant has entered its plea of guilty. On any view, on the basis of the information placed before the Court by the defendant, the Press should not stroke until the guard is completely closed. That clearly was not the case here. Also, there is little doubt that even on Mr Citroni's evidence, the machine was not well maintained. As he stated, there was 'adjustment and wear in the linkage system.' This accords, as I assess his evidence, with that of Inspector Mansell in his Statement before me, which relevantly stated: 8. On seeing the John Heine 208AG power press, I asked them to find some wood and/or metal packing. 9. This was found and I placed a piece of wood and strip of metal between the rise and fall guard. 10. This was done to hold the guard closed onto the material to hold it at a setting open at 80mm. 11. I then asked that the machine be turned on. When it was determined there was nothing in the die area to cause any damage to the die, I then asked for the press to be activated. That is to press the foot control to initiate a power stroke. 12. The press completed a power stroke. 13. This method of checking the integrity of a guard is one I have used a number of times in the past. The purpose is to establish at what point the press strokes other than when the guard is closed. 14. The test carried out that day established the linkages back to the interlock of the press were worn or out of adjustment. (my emphasis) 15. The press would stroke when the guard was closed, as it is supposed to. However, it would also stroke when there was a gap up to 80mm at the time I tested it on that day. 28 In raising the issue as he did, counsel for the defendant relied on the decision of a Full Bench of this Court in Nesmat Pty Ltd v Workcover Authority of New South Wales [1998] 87 IR 312. That decision was an appeal brought from a decision of Fisher P in which he imposed a penalty of $80,000 on the appellant following the entry of a plea of guilty. In allowing the appeal and reducing the penalty, the Full Bench referred to the decision of Kirby P (as he then was) in the New South Wales Court of Appeal decision in Camilleri's Stockfeeds Pty Ltd v Environment Protection Authority [1993] 32 NSWLR 683 where his Honour summarised a number of general principles of sentencing that included the following: The Court must keep in mind not only the facts which establish the seriousness of the offence but also those which tend to mitigate that seriousness or exculpate the offender. In this process, where a relevant fact is the subject of conflicting evidence, and where that evidence is of like probability, the Court should resolve the conflict of fact in favour of the offender: See R v O'Neill [at 588]. 29 Taking the above principle into account, it does not seem to me that I am confronted with conflicting evidence of like probability about a relevant fact. That is, in the agreed facts there was evidence that the Press would stroke where the distance between the rise and fall guard was approximately 77mm. On Mr Citroni's evidence called by the defendant, the Press would stroke when the distance between the rise and fall guard was, as he stated, '62mm and the die guards could not open more than 100mm until the Press had completed the cycle.' 30 On any view, those two pieces of factual evidence are not significantly or in any way, it seems to me, at odds with each other. Certainly, those two statements are at odds with the sentence of Mr Rowe's handwritten statement that at the time that the accident occurred when he put his left hand in to remove the pole cap 'the safety gate was opened at its fullest.' Mr Rowe was not called. That was not sought by the defendant and Mr Rowe's statement came before me without any objection at the relevant time. More significantly it seems to me, there is no dispute between the prosecution and the defendant as to the particulars of the offence before me. That is, amongst other things, that the defendant failed to adequately maintain the Press as well as the adequacy of the guarding of the die area of the Press. On the evidence before me from both Inspector Mansell and Mr Citroni, the linkages back to the interlock of the Press were worn or out of adjustment. Mr Citroni stated that he did not consider the bi-fold guards were defective in design or function - apart from the adjustment and wear in the linkage system. (my emphasis) The statement by Mr Rowe is not, in my view, relevant to the specific particulars to which the defendant has pleaded guilty to and from which, I was consistently told, it did not resile. 31 Mr Bagley's affidavit outlines those steps taken to remedy the adjustment of the Press and make certain modifications to it post the accident. As Mr Bagley's affidavit explains at paras [66] and [67]: However given our serious concerns that the accident had occurred at all, Hayman concluded (sic) to completely overhaul the 208AG press. Subsequent to conversations conducted with the engineers of Heines and their personnel we replaced the standard foot treadle with a single stroke interlock and air tread system. This allows the machine to complete only one cycle, even if the treadle is held down continuously. The machine will not strike again until the treadle is released and reset. This work was carried out by Heine at a cost of $9,729.00. Simultaneously Hayman also engaged the services of Mr Leon Myers of Guarding Specialists Pty Limited who advised that the original bi-fold guarding mechanism be replaced with a single front gate guard at a total cost of $7,150.00. 32 The video produced by the defendant demonstrated how the Press now operates following the safety modifications made after Mr Rowe's accident. 33 The affidavit evidence of Mr Graham Bagley is most comprehensive. It details the history of the company going back to 1957. Mr Bagley is both the Finance and Administration Director of the defendant as well as a director of the company, along with his brother, Mr John Bagley. 34 The defendant currently employs some 29 permanent employees engaged in light metal manufacturing and engineering specialising in the supply and manufacture of electricity hardware paraphernalia to electricity supply authorities. 35 The defendant uses the services of a labour hire company to provide additional labour to its full time workforce according to production demands. As part of the agreement between the defendant and the Daly Smith Corporation, Mr Rowe was engaged to work at the defendant's premises as a machine operator. Mr Rowe commenced work at the defendant's premises sometime in June 2000. According to Mr Bagley, Mr Rowe was inducted into his position at the defendant's premises by employees of the defendant, specifically Mr Cyril Tipping, Production Manager. Subsequently, Mr Rowe came under the direct supervision of Mr Dennis Laycock who, according to Mr Bagley, provided him 'with training on issues of safety and provided him with training on the use of the 208AG Power Press.' 36 Up until about 1998, the defendant did have a permanent employee whose work involved the carrying out of maintenance and repairs to its capital equipment, particularly the Power Presses - some 10 in all. In 1998 that person left the defendant's employment. 37 In 1999 the defendant entered into an arrangement with John Heine & Sons Pty Ltd, they being the manufacturer of the Presses used by the defendant in its business. The arrangement was that Heine & Sons would provide ongoing preventative and maintenance programs in relation to the Power Presses. As part of that agreement, Heine & Sons provided: · A preventative maintenance and programme package. That included recommendations made by Heine's as to the nature and frequency of inspections that Heine's would carry out as part of the preventative maintenance package. This maintenance package included a visual and physical check of the guards to ascertain if the guards were functioning and that the guards were interlocking with the clutch. · A maintenance programme schedule. The maintenance programme schedule was an agreement to undertake over a 12 month period and as pre-agreed, various inspections, both visual and physical, of the Power Presses. 38 In accordance with that agreement, Heine & Sons carried out repair and maintenance checks on the Power Presses and on the particular Press involved. That particular Press was assessed on 17 May 2000 as being 'in good condition.' 39 The particular Press involved in the accident with Mr Rowe was used to press galvanised mild steel sheeting into power pole caps. The defendant, through Mr Bagley, stated that it did provide training and supervision in relation to the operation of the particular machine, although as Mr Bagley stated in para [25]: The 208AG Power Press is a relatively simple machine to operate and the manufacturer does not require any operator to undergo any process of certification or formal tuition. 40 At the time of the accident, the defendant did have an Occupational Health and Safety Committee in place with proper accreditation under the Occupational Health and Safety Act. This Committee did meet on a monthly basis. It now meets on a fortnightly basis and does so with all employees during work time. As Mr Bagley advised in para [75] of his affidavit: The Committee continues to consult directly with the workforce and with Hayman Management. Hayman and its management understand the duties and obligations which persist in matters of safety and considers these issues to be an on-going and evolving process. Consequently, Hayman has now conducted some preliminary discussions with the Brief Group Pty Ltd who will be putting in a proposal to Hayman for the purpose of carrying out a workplace safety assessment which the senior management and the Occupational Health and Safety Committee will subsequently use to review and refine the safety practices and procedures at Hayman. 41 As well, following the accident the defendant actively assisted Mr Rowe and offered to continue to employ him once he was fully recovered. Mr Rowe did not take up that offer and returned to New Zealand. 42 The defendant has reviewed all of its training, instruction and checking procedures and as a result of that has developed induction and training sheets for its workforce. It has undertaken to ensure the closest supervision of labour hire workers. It has put up warning signs attached to its Power Presses. The defendant has also implemented daily machine inspections with records of same and continues with a more rigorous maintenance programme. 43 Overall, I am satisfied that the defendant has been positive and proactive in seeking to address those matters that it saw as necessary following this accident involving Mr Rowe. Considerations on Penalty 44 To begin with it is necessary to consider the objective seriousness of the offence before me: Lawrenson Diecasting v Workcover 90 IR 464 particularly at 476. 45 The proper and safe operation and guarding of highly dangerous machinery such as the 208AG Power Press that was involved in the accident before me is critical to ensuring a safe system of work in the type of business conducted by the defendant. 46 This Court is replete with cases concerning such matters and the clear, foreseeable risk to injury that failures in that area can pose as a direct risk to the safety of its employees. On that point, the information material provided by Mr Citroni and incorporated into Mr Bagley's second affidavit to which I have already referred, only highlights the dangerous nature of the machinery being operated by Mr Rowe on 30 June 2000 to which proper maintenance in the area of guarding was paramount. On any view, the proper assessment, checking and maintenance of this particular Power Press was simply inadequate. Given the adjustment and wear in the linkage system of the Press, it is quite proper to say I believe, that it was only a matter of time before an accident such as that which occurred to Mr Rowe did in fact occur. 47 In coming to the determination of penalty, one must have regard both to general and specific deterrence. It is my view that the decision in Capral Aluminium Ltd v Workcover Authority of New South Wales (Inspector Mayo Ramsay) [2000] 49 NSWLR 610 clearly reinforces such an approach here particularly having regard to paras [74] and [77]. 48 There is evidence before me as to the defendant's financial position. It is appropriate that I take that evidence into account in the determination of penalty. On that point, I have regard to the decision of Wright P in Benbow v Converquip Pty Ltd [2001] 106 IR 258 at para [53] where his Honour stated: Section 6 of the Fines Act (1996) makes plain that, in the exercise by this Court of its discretion to fix the amount of any fine, it is required to consider inter alia 'such information regarding the means of the accused as is reasonably and practicably available to the Court for consideration. Such matters were considered in Ferguson v Nelmac Pty Ltd and also in Walco Hoist . This was said in the second of those cases, (again without setting out the authorities relied upon) at [27]: As to the financial position of the defendants, it is to be accepted in terms of general sentencing policy that the means of a defendant are relevant. This consideration may, in appropriate cases, involve the careful examination of the means of the defendant, and consideration of the means of the defendant in fixing the amount of any penalty or fine: …This is, in any event, required by s6 of the Fines Act …It is to be observed, however, that a consideration of the means of the defendant with the conclusion that a heavy fine may be a burden on the defendant and it financial resources does not necessarily preclude the imposition of a heavy penalty. 49 The evidence concerning the financial circumstances of the defendant are to be predominantly found in the affidavit evidence of Mr Christopher Welch. As Mr Welch deposes, he has been the defendant's external accountant and auditor since 1975 and has a comprehensive knowledge of the Company's finances and a day-to-day knowledge of the Company's books and accounting. 50 Attached to Mr Welch's affidavit is a copy of the defendant's financial statements for the year ending 30 June 2002. Those financial statements disclose that profit from ordinary activities before income tax for the year ending 30 June 2001 was recorded as being $481,686.30. In addition, Mr Welch states at paras [4], [5], [6] and [7]: Property holding cost losses from the associated company H Hayman Industries Pty Ltd were $141,520.58 reducing the taxable profit to $340,165.72. Since that date Hayman has experienced increasing expenses including relocation costs to move its place of operation from Padstow to Minto. The relocation cost is a one-off expense, however Hayman's profit throughout the years has proved to be haphazard and fluctuates greatly. In the financial year ending 30 June 2002 the profit from ordinary activities before income tax was $85,560.45. Property holding costs losses from the associated company H Hayman Industries Pty Ltd were $184,945.40, realising a net loss for the year of $99,384.95. Hayman Industries Pty Ltd has a substantial debt repayment obligation to Westpac Bank of $150,000.00 per annum (total loan $1,500,000.00) which is funded from after tax profits, when available. On review of the accounts and Hayman's current activities year to date I estimate that Hayman's profit from ordinary activities before income tax for the year ending 30 June 2003 will be in the range of $190,000.00 to $205,000.00 which again represents a poor trading year. 51 Mr Welch was not required to give evidence. I accept that the financial position of the defendant as evidence before me is that of a medium sized company trading in an industry that fluctuates in its production demands. That fluctuation in production demands is accordingly reflected in the ultimate profit and loss statements of the defendant in successive years. 52 The defendant has certain debt repayment obligations. While I consider this offence to be a serious one and I propose to impose a penalty accordingly, I do so against the background properly reflected by those audited statements as deposed by Mr Welch. 53 The defendant entered its plea of guilty to this offence on 3 October 2002. On one view it would normally be entitled to a proper discount for the entry of that early plea. While I accept that some discount is appropriate I have to say that the defendant somewhat eroded that early plea of guilty by the Court time it utilised in putting forward contentions that ended up occupying the best part of an additional day of Court time. While in no way denying the defendant the right to place whatever material it saw fit before the Court in defence of its position, the matter that it sought to place in contention is a matter that I ultimately found against them. I am of the view that the defendant has eroded the utilitarian value of its early plea of guilty and I assess the discount for the early plea at 15% of the penalty that I propose to impose. 54 The defendant before me has one prior conviction. That was a conviction entered in 1988 for an offence under s15(1) of the Act involving an accident by an employee in the use of a John Heine Power Press. That matter was dealt with by the Chief Industrial Magistrate and a penalty of $3000 was imposed. The information concerning this prior offence was admitted without objection following enquiries made by Inspector Mansell. The act or omission that caused the accident to the employee concerned involved the disconnection of the interlock mechanism to the front rise and fall guard. It was stated by Inspector Mansell that the foreman then employed admitted to disconnecting the interlock. As part of the accident the injured person had commenced employment on the morning of the injury with no prior training instructions. The nature of the injury was such that the employee concerned suffered the amputation of four fingers to his left hand. 55 While the accident that occurred in or about 1988 had an exactly similar outcome to that as involving Mr Rowe in the matter before me, there were clearly differences between the background circumstances. In the earlier matter (No. 88/135) there is an acknowledgement by the prosecution that the act or omission giving rise to the accident was a deliberate disconnection by a then supervisory foreman of the defendant of the interlocking mechanism to the front rise and fall guard of the particular Power Press. In the matter before me, the particulars as pleaded and as acknowledged by the defendant involve matters that go to a failure of proper supervision, training, instruction and maintenance of the said Power Press rather than any deliberate act on the part of the employee of the defendant to place the Power Press in a situation of danger to any employee then using it. While the offence before me is a second one, I do take into account the differing background circumstances giving rise to the accident Nevertheless, that prior prosecution enlivens s51A of the Act such that the maximum penalty for the offence before me is $825,000. 56 There are a number of subjective features that I should properly acknowledge on the part of the defendant before me. As properly acknowledged by the prosecution, the defendant has cooperated in every way with the investigatory authorities. There is no doubt that Mr Bagley, on behalf of the defendant, was both compassionate in his response to Mr Rowe's accident and went out of his way to offer alternative employment to the young man when he was ready to return to work. That Mr Rowe did not wish to take up that offer of further employment does not derogate from the defendant's both caring and compassionate concern for Mr Rowe's long term employment future. 57 I also accept that the defendant has acted swiftly and comprehensively to have the particular Press modified and has taken those additional steps that I have already identified to address the issues that would properly arise in a matter such as this. The prosecution rightly acknowledged that, given the nature of the defendant's manufacturing business, it has been in operation since the 1950's and, notwithstanding the prior conviction, is a company that has an overall good safety record. I accept that and taking into account all of the subjective features that I have identified, I determine a further discount on penalty of 10%. 58 Taking into account all of those matters I have referred to I determine a notional penalty in this matter of $55,000. In applying the discounts that I have determined I set a final penalty of $41,250. 59 Accordingly, I make the following orders: · The defendant is convicted of the offence as charged · I impose a penalty of $41,250 · I allocate a moiety to the prosecutor on the usual terms · Costs to the prosecution as agreed between the parties or, failing agreement, the matter may be re-listed before me to determine. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.