Industrial Relations Commission of New South Wales in Court Session CITATION : Seda Pty Limited v Inspector James (WorkCover Authority of New South Wales) [2003] NSWIRComm 368 APPELLANT Seda Pty Limited PARTIES : DEFENDANT Inspector Wayne James (WorkCover Authority of New South Wales) FILE NUMBER: IRC 7403 of 2002 CORAM: Wright J President; Walton J Vice-President; Boland J CATCHWORDS : Appeal - Leave to Appeal - Occupational Health and Safety - Manufacturing industry - Crush injury - Appeal against severity of sentences - Nature of appeal - Delay in rectifying defects - Aggravation - Mitigation - Financial position of appellant - Turnover - Assets - Principle of totality - Penalties manifestly excessive - New penalties imposed Criminal Appeal Act 1912 s 5AA LEGISLATION CITED : Industrial Relations Act 1996 s 196 Occupational Health and Safety Act 1983 s 15 s 31R Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304, [2001] NSWCCA 280 Crown in the Right of the State of New South Wales (Dept of Education and Training) v Keenan (2001) 105 IR 181 Fernandes Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Steven Jones) [2002] NSWIRComm 364 Inspector Batty v Graincorp Operations Ltd [2002] NSWIRComm 49 Inspector Colin James West for the WorkCover Authority of New South Wales v Australian Veg-Tanners Pty Limited [1997] NSWIRComm 78 Inspector Frank Glass v BNG Battery Technologies Pty Ltd [2002] NSWIRComm 346 Inspector Glenn McCarthy v Advance Packaging Pty Ltd [1997] NSWIRComm 89 Inspector Mahinder Seneviratne v Eric Roberts Trading Co Pty Ltd [2002] NSWIRComm 87 Inspector Wayne James v Seda Pty Ltd [2002] NSWIRComm 369 John William Ingle v Erineton Pty Ltd and John William Ingle v Aspex Paper Australia Pty Limited (unreported, Hungerford J, CT 1238 of 1996, 11 April 1997) P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102 R v De Simoni (1981) 147 CLR 383 CASES CITED : Ridge Consolidated Pty Ltd v WorkCover Authority of NSW (Inspector Mauger) (2002) 115 IR 78 Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority of New South Wales (Inspector Ankucic) v Namoi Cotton Cooperative Ltd [1998] NSWIRComm 351 WorkCover Authority of New South Wales (Inspector Barbosa) v Leigh Mardon Pty Ltd [1999] NSWIRComm 121 WorkCover Authority of New South Wales (Inspector Batty) v Graincorp Operations Ltd [2001] NSWIRComm 127 WorkCover Authority of New South Wales (Inspector Dawson) v Robert John Waugh (1995) 59 IR 89 WorkCover Authority of New South Wales (Inspector Donnelly) v Riverina Wool Combing Pty Limited [2000] NSWIRComm 29 WorkCover Authority of New South Wales (Inspector Kitchen) v Tixana Manufacturing Pty Ltd [2001] NSWIRComm 76 WorkCover Authority of New South Wales (Inspector Mansell) v Australian Paper Limited (unreported, Marks J, CT 1229 of 1995, 28 March 1996) WorkCover Authority of New South Wales (Inspector Mansell) v Hayman Industries Pty Ltd [2003] NSWIRComm 154 WorkCover Authority of New South Wales (Inspector McMartin) v Milltech Pty Ltd [2000] NSWIRComm 246 WorkCover Authority of New South Wales (Inspector Rech) v Defiance Foods Pty Ltd (unreported, Bauer J, CT 1080 of 1995, 1 December 1995) WorkCover Authority of New South Wales v Zac's Pax Pty Ltd (unreported, Fisher CJ, CT 1282 of 1994, 20 December 1995) HEARING DATES: 07/31/2003 DATE OF JUDGMENT: 12/09/2003 APPELLANT Mr G Hatcher SC with Mr R Moore of counsel Solicitor: Mr J Lloyd John Lloyd & Co LEGAL REPRESENTATIVES: DEFENDANT Ms L McManus of counsel Solicitor: Mr D Morris Phillips Fox JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President BOLAND J Tuesday 9 December 2003 Matter No IRC 7403 of 2002 SEDA PTY LIMITED v INSPECTOR WAYNE JAMES (WORK COVER AUTHORITY OF NEW SOUTH WALES) Appeal by Seda Pty Limited against decision of Justice Kavanagh given on 20 December 2002 in matter Nos 6718 of 2001 and 6721 of 2001 JUDGMENT OF THE COURT [2003] NSWIRComm 368 1 This is an appeal brought pursuant to s 196 of the Industrial Relations Act 1996 and s 5AA of the Criminal Appeal Act 1912 against the severity of sentences imposed by Kavanagh J in Inspector Wayne James v Seda Pty Ltd [2002] NSWIRComm 369. 2 Seda Pty Ltd ("the appellant") manufactured pita and pocket breads at its bakery in Yennora in the State. The appellant employed some 16 employees and turned over approximately $2.2 million per annum. The appellant employed Yan Zhong Zhu as a dough maker. On 4 August 2000, whilst Mr Zhu was working on Bread Improver Line No 2 (a conveyor), his left arm was drawn into the conveyor whilst he was attempting to remove and adjust a jammed teflon cover flap/guard. Mr Zhu was unable to turn off the conveyor. Other employees came to his assistance but it took 30 minutes before his trapped arm could be freed. Mr Zhu suffered serious injuries to his left arm as well as other injuries. 3 The appellant was charged with two offences under s 15(1) of the Occupational Health and Safety Act 1983. The first charge (matter no IRC6718 of 2001) related to failures in connection with Bread Improver Line No 2 giving rise to a risk to health and safety. The second charge (matter no IRC6721 of 2001) was in similar terms to the first charge and alleged failures in connection with Bread Improver Line Nos 1 and 3. The appellant pleaded guilty to both charges. 4 The maximum penalty available in each case was $550,000. Kavanagh J determined a fine of $130,000 for each offence. These amounts were discounted by 20 per cent for the utilitarian value of the pleas. Applying the principle of totality the amounts were further reduced and the defendant was fined $84,000 for each offence or a total of $168,000. Grounds of appeal 5 The grounds of appeal were, in summary, as follows: 1. The penalty or sentence imposed was manifestly unjust and inordinately harsh resulting in a miscarriage of justice; 2. The sentencing judge failed to give any or adequate consideration to the relevant factors on sentencing and in particular the subjective factors of the appellate as would mitigate against an excessive penalty as contained in the evidence before the Commission; 3. The sentence imposed was unreasonable in the circumstances of the case. Decision at first instance 6 After referring to the agreed statement of facts and other evidence in the proceedings Kavanagh J observed that: 11 The risk to safety in the use of the Bread Improvement Line No. 2 was actualised when Mr Zhu on 4 August 2000 had his arm caught in the machine Line No. 2. Mr Zhu was caught in the machine for 60 minutes as the isolation switches were found 20 to 30 metres away the machine and there was difficulty obtaining his release. Mr Zhu was attempting to take a cover off the machine to readjust it for the type of bread being produced. It appears from the agreed facts the cover was not secured. The cover should not have been removed until after the machine had been switched off. Mr Zhu knew this. He also knew the location of the off-switch but he did not turn the machine off before he performed the adjustment. Further, that part of the machine in which Mr Zhu was caught was not the conveyer belt line area, the identified risks to safety to which most of the particulars of the charges are directed. 12 The machines referred to in the charge are the Bread Improver Lines. The Bread Improvement Lines had been imported. The Bread Improver Line Machines No 2 and No 3 were bought in about 1996 and were imported from Lebanon. Some portions of the machines were purchased in Australia. The Bread Improver Line No 1 had been purchased from Mr Zhu who, after the line was purchased by Seda, the defendant company, then worked for the company as an independent contractor. 13 Mr Dahari, the director of the defendant company opined there was no significant difference as between the operation of each Bread Improver Line. He now acknowledges he cannot assume machines, imported, comply with the rigorous safety standards required for machines in factories throughout New South Wales. 14 The circumstances of these prosecutions reveal the defendant failed to adequately guard, isolate and label three Bread Improver Line Machines in its production line including the attached conveyor belts. It also failed to adequately instruct and train employees in the operation of the Bread Improver Lines: (a) As to Guarding There were some guards over the drive chains of the attached conveyor but there was no guard behind the drive chains of the conveyor. The risk arising from an unguarded machine has been commented upon by Fisher CJ in WorkCover Authority of New South Wales v Zac's Pax Pty Limited (unreported, CT1282 of 1994, 20 December 1995): Leaving dangerous moving parts of machines unfenced always has a potentiality for serious injury wherever it occurs. (b) Isolated and Emergency Switches There were no emergency stop switches and no adequate motor isolation switches fitted to the bread line machines or the conveyors. (c) Labelling There was a further failure to identify the function of the controls on the Bread Improver Line Machines and especially to adequately label the motor isolation switches. The stop button on the Bread Improver Line No 2 was 20 to 30 metres away from the machine. (d) Instruction and Training There was a failure to adequately instruct and train including any induction training on the operation of the Bread Improver Line No 2. 15 There was no report of this incident by the company to the WorkCover Authority. The NSW Police notified WorkCover. Mr Dahari, the director/owner of the company originally held the view following the incident, the guarding already on the machines was adequate. It was also his view Mr Zhu and others needed only "on the job" instructions. No formal training session was in place. In evidence he conceded he now understands he held an incorrect view and belief. 7 Her Honour noted that Mr Dahari, the director/owner of the company originally held the view following the incident that the guarding already on the machines was adequate. It was also his view Mr Zhu and others needed only "on the job" instructions. No formal training session was in place. Kavanagh J said that in his oral evidence Mr Dahari "conceded he now understands he held an incorrect view and belief." 8 Kavanagh J considered that appropriate measures were available and feasible to remedy the defects in the machines, however, appropriate measures were not taken immediately. 9 Her Honour found at par [19] that: [T]he unguarded parts to the machine; the lack of labelling; the failure to provide stop switches within reach of the machine operator and the lack of training of the operators created a grave risk to the health and safety of employees on this site. This was a serious offence by an employer in neglect of his obligations under the Act. 10 Kavanagh J considered that in relation to specific deterrence there had been 12 Improvement Notices served on the appellant. Her Honour noted that the Notices directed themselves to identified risks to safety in the design and operation of the machines and that "These notices were not fully complied with over a five month period until the end of January 2001." In this respect her Honour said: 23 Mr Dahari reacted, initially, to the WorkCover Notices quickly and the electrical work was attended to at a total cost of approximately $4,290. However, by 6 December 2000, many of the detailed faults, brought to his attention in the numerous Improvement Notices, had not been attended to. The first guards designed for the conveyor wheels were not held by WorkCover Inspectors to be satisfactory. Electrical equipment was installed to allow access by the operator of the Bread machines to stop and start switches. Those associated electrical cables run along the machines, however, then required guarding. A number of the notices had to be re-issued. 24 Finally on 12 December 2000, Mr Dahari called in Industrial Safety Advisers to assist in the implementation of a complete safety audit and advise as to compliance. There was no final compliance with the notices until late January 2001. Mr Dahari was cross examined on the delay and conceded he now understands his full obligations under the Act to provide his workers with safe working. He effectively conceded 'I now understand'. 25 The defendant company through Mr Dahari has now expressed contrition. He acknowledges the need to rigorously apply his endeavours to ensure a safe working environment for his employees. He expended further monies to bring the equipment up to standard in relation to guarding the switches and labelling. 11 Kavanagh J referred to the financial status of the appellant. She found the appellant was not without financial means and did not accept that she should take into account a submission that the appellant had lost 40 per cent of its potential income for the financial year ending 30 June 2002 because of the loss of a large contract. Her Honour acknowledged the appellant had no prior convictions. As we have already noted her Honour allowed a discount of 20 per cent for the utilitarian value of the pleas and reduced the combined penalties by $40,000 after applying the principle of totality. Submissions for the appellant 12 Mr G J Hatcher SC with Mr R Moore of counsel appeared for the appellant. The submissions for the appellant may be summarised as follows: 1. The penalties imposed by her Honour were manifestly excessive. This may be illustrated by references to other cases involving similar risks. See for example, WorkCover Authority of New South Wales v Hayman Industries Pty Ltd [2003] NSWIRComm 154 where in a case involving a crush injury leading to amputation of four finger's a discounted penalty of $41,250 was imposed in circumstances where the maximum fine available was $825,000. 2. Her Honour inappropriately took into account matters arising after the date of the incident including the issuing of Improvement Notices. 3. The two prosecutions arose out of a common set of circumstances and should have been regarded by her Honour as one offence. 4. Her Honour placed undue weight on the circumstances in which the worker was injured in that her Honour said at par [11] of her judgment, "The risk to safety in the use of the Bread Improver Line No 2 was actualised when Mr Zhu on 4 August 2000 had his arm caught in the machine Line No 2." It was submitted that none of the Improvement Notices required any change to the guards that were in place in the location where Mr Zhu was drawn into the machine. The only difference in terms of ensuring safety in the circumstances that led to Mr Zhu's injuries was the installation of the switch that would enable any person caught by the machine in the way Mr Zhu was, to stop the machine. 5. Her Honour erroneously formed the view that it was only within the confines of the witness box under examination by her Honour that Mr Dahari first "understood" his obligations about providing a safe working environment and that this was the reason why there was a delay in the appellant finally complying with the Improvement Notices. It was submitted that Mr Dahari understood his obligations regarding the provision of machinery that met required safety standards and that he believed "up to and including 4 August 2000" the appellant's machinery met those standards. After 4 August 2000 it was submitted that the appellant understood the need to comply with the Improvement Notices. 6. Her Honour failed to give any recognition in fixing sentence to the subjective features of the circumstances of the appellant including the expression of contrition, the appellant's financial circumstances and the appellant's previous good record over 15 years of operation. 7. Her Honour's assessment of the appellant's culpability placed it in the middle of the worst possible case. This could not be so on the evidence. Submissions for the respondent 13 Ms L McManus of counsel appeared for the respondent. The submissions for the respondent may be summarised as follows: 1. The appeal is to be determined as an appeal stricto sensu . The Court will only intervene if an error of principle or a mistake of fact or law is established whereby her Honour's sentencing discretion miscarried or if the sentence is so excessive that the exercise of discretion must have been affected by error. 2. Many of the cases referred to by the appellant for comparative purposes were cases brought in the Chief Industrial Magistrate's Court where the maximum penalty is $55,000. In considering cases involving similar risks that had come before the Commission in Court Session the penalties imposed by Kavanagh J were at the higher end of the range of sentences. 3. When referring to the objective seriousness of the offence Kavanagh J referred to appropriate measures not having been taken immediately even though such measures were available and feasible. It was not clear from her Honour's judgment whether her Honour was making a statement of fact when identifying that simple and straightforward steps were available or whether her Honour had taken into account the fact that steps were not immediately taken by the appellant as a matter going to the objective seriousness of the offence. It had been submitted to her Honour by the prosecution that the delay in rectifying the breach was a subjective not objective factor. 4. As to the appellant's contention the two offences should have been treated as one, her Honour correctly applied the principle of totality. 5. Her Honour properly took into account the circumstances of the injured person. The injury manifested the risks arising from the unguarded machinery not only in the area of the machine in which he was caught but the other areas of the unguarded machine. 6. It was open to her Honour to find that Mr Dahari understood his full obligations under the Act when he gave evidence at the sentencing hearing. 7. Her Honour correctly took into account the appellant's financial circumstances. It was open to her Honour to come to the view that it was a company with financial means and to reject the submission that the company had lost 40 per cent of its potential income for the current financial year. 8. It would appear that her Honour took into account the objective seriousness of the offence and subjective matters in setting the fine of $130,000 in each matter. Further discounts were then given for the guilty pleas and the principle of totality. Accordingly, her Honour did discount for all of the subjective factors. Nature of appeal 14 The proper approach to an appeal under s 5AA of the Criminal Appeal Act is as an appeal stricto sensu. In P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102, the Full Bench of this Court considered the nature of an appeal under s 5AA in the following terms: 12 As a result of the amendment to the section by the legislature effective from September 2000, the principles on appeal are accordingly not those set out in cases such as Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326, Fletcher Constructions Australia Limited v WorkCover Authority of NSW (Inspector Fisher) (1999) 91 IR 66 and Capral Aluminium v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 99 IR 29 which depend upon an earlier form of s 5AA. 13 The approach to be adopted in this matter, which is an appeal against sentence is, therefore, the more traditional approach exemplified by the authorities such as House v King (1936) 55 CLR 499 and WorkCover Authority of New South Wales (Inspector Viesis) v Thiess Contractors Pty Limited (1996) 85 IR 12 at 31; see for example the discussion in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163. 15 See also Ridge Consolidated Pty Ltd v WorkCover Authority of NSW (Inspector Mauger) (2002) 115 IR 78 at [15] and Fernandes Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Steven Jones) [2002] NSWIRComm 364 at [1]. 16 Similarly, in Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304, [2001] NSWCCA 280, Giles JA (Hulme and Adams JJ agreeing) in the Court of Criminal Appeal held: 3 An appeal lies by the combined operation of ss 5AA and 5AB of the Criminal Appeal Act 1912. Prior to the amendments made by the Courts Legislation Amendment Act 2000 such an appeal was by way of rehearing on the evidence before the trial court, subject to fresh, additional or substituted evidence by leave (see Camilleri's Stock Feed Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683). The amendments omitted sub-ss (3) and (3A) of s 5AA, which had provided for an appeal of that nature. In the light of the observations of the court in Histollo Pty Ltd v Director-General of National Parks and Wildlife Service (1998) 45 NSWLR 661, which clearly enough brought the amendment, it was intended that an appeal under s 5AA become an appeal of the same nature as that for which s 5 of the Criminal Appeal Act provides, described in Histollo Pty Ltd v Director-General of National Parks and Wildlife Service as an appeal "in the strict sense". … 5 It is accordingly necessary that the appellant establish error on the part of Cowdroy J. It is not enough that this Court would itself have imposed a different sentence. The Court will intervene if an error of principle or a mistake of fact or law is established whereby his Honour's sentencing discretion miscarried, or if the sentence is so excessive that the exercise of the discretion must have been affected by error. Conversely, even if error is established the sentence will not be varied unless the Court considers that some other sentence was warranted. Consideration 17 The charge in matter No IRC 6718 of 2001 was in relation to the appellant's failures, as particularised, in connection with Bread Improver Line No 2, which was the machine where Mr Zhu sustained his injuries. Those failures were a failure to: 1. Provide or maintain plant that was safe and without risks to health. 2. Provide adequate instruction and training, including induction training, on the operation of plant and machinery. 3. Provide adequate information, instruction or training on emergency procedures. 18 In matter No IRC 6721 of 2001 the failures alleged in the charge related to the Bread Improver Line No 1, Bread Improver Line No 3, conveyors in the inclined conveyor adjacent to the Agridy Dryer, a packaging machine identified as UBE model 67-2P with serial number R67 and a packaging machine identified as UBE model 67-8BT with serial number 756. Those failures were failures to provide and maintain the respective pieces of plant or machinery that were safe and without risks to health. It was also alleged that the appellant failed to conduct any adequate machine guarding risk assessment on all plant in the premises. 19 In relation to the failures to provide and maintain safe plant the particulars of each of the charges referred to the appellant's failure to guard, isolate and properly label the various pieces of plant and machinery. 20 In determining the penalty in each case Kavanagh J indicated in her judgment that she had taken into account the gravity of the offences and the relevant subjective factors. The penalties were then discounted by 20 per cent for the utilitarian value of the guilty plea. In assessing the gravity of the offences her Honour found that "the unguarded parts to the machine; the lack of labelling; the failure to provide stop switches within reach of the machine operator and the lack of training of the operators created a grave risk to the health and safety of employees on this site." Her Honour also appears to have had regard to the seriousness of Mr Zhu's injury as reflecting the "degree of seriousness of the relevant detriment to safety" posed by the machinery. Her Honour found that the offences were serious. 21 In the process of considering objective factors, her Honour said that the company had not reported the incident involving Mr Zhu but that it was the Police who notified the WorkCover Authority. Her Honour appears to have put this alleged failure to notify down to Mr Dahari's view, expressed after the incident, that the guarding already on the machines was adequate. Her Honour noted in his evidence Mr Dahari conceded that this view was incorrect. Her Honour does not elaborate further on the failure to notify but the fact that it was referred to in the course of her consideration of the objective seriousness of the offence is an indication that it was a factor taken into account by her Honour. In doing so, we consider her Honour erred. Her Honour's reference to a failure to notify was not the subject of any evidence and, as the prosecutor properly conceded, it was not put in issue in the proceedings. 22 In considering objective factors, Kavanagh J also referred to the availability of simple and straightforward steps to remedy the defects in the machines. Her Honour observed that appropriate measures "were not taken immediately by the defendant company even though such measures were available and feasible." The defendant's failure to take immediate steps to rectify the defects was also referred to by her Honour in the context of specific deterrence. At pars [22] to [24] her Honour said: 22 As to the element of specific deterrence there has been a weight of evidence as to the 12 Improvement Notices served on this defendant company. The defendant was over a number of months issued with the 12 Improvement Notices by the WorkCover Authority. The notices directed themselves to identified risks to safety in the design and operation of the machines. These notices were not fully complied with over a five month period until the end of January 2001. 23 Mr Dahari reacted, initially, to the WorkCover Notices quickly and the electrical work was attended to at a total cost of approximately $4,290. However, by 6 December 2000, many of the detailed faults, brought to his attention in the numerous Improvement Notices, had not been attended to. The first guards designed for the conveyor wheels were not held by WorkCover Inspectors to be satisfactory. Electrical equipment was installed to allow access by the operator of the Bread machines to stop and start switches. Those associated electrical cables run along the machines, however, then required guarding. A number of the notices had to be re-issued. 24 Finally on 12 December 2000, Mr Dahari called in Industrial Safety Advisers to assist in the implementation of a complete safety audit and advise as to compliance. There was no final compliance with the notices until late January 2001. Mr Dahari was cross examined on the delay and conceded he now understands his full obligations under the Act to provide his workers with safe working. He effectively conceded 'I now understand'. 23 There is some relevant background to this issue relating to the appellant's compliance with the improvement notices. Originally, the appellant faced four charges; the two charges that are the subject of these proceedings and two charges under s 31R of the Act alleging failure to comply with a requirement imposed by an improvement notice. The prosecution indicated to Kavanagh J that it intended to withdraw the charges under s 31R. The prosecution informed her Honour that whilst it intended to withdraw the charges, in light of the appellant's proposed reliance (in relation to the s 15 charges) on its efforts to remedy the defects and its cooperation with the prosecuting authority, the prosecution intended to refer to the lengthy time taken by the appellant to comply with the improvement notices. Kavanagh J expressed some concern about the implications for the course proposed by the prosecution by the High Court's judgment in R v De Simoni (1981) 147 CLR 383 and whether the Court was entitled to take into account circumstances of aggravation that would have warranted a conviction for another offence. 24 The prosecution made it clear that its reliance on the time taken by the appellant to comply with improvement notices was not being put as a matter of aggravation but rather that, given the appellant intended to raise in mitigation its efforts to remedy the defects in its plant and machinery, the prosecution was entitled to ask the Court to have regard to the time taken to do so and to weigh up the matter accordingly. 25 The appellant's complaint was that despite the caution noted by Kavanagh J concerning De Simoni her Honour, in effect, took into account the delay in complying with improvement notices as aggravating circumstances and thereby increased the sentence whereby the proper approach, if her Honour did not accept the appellant's case relating to mitigation, was that there would be no ameliorating effect on sentence. The appellant contended, of course, that it had made out a case in mitigation such that it called for a more lenient sentence having regard to the appellant's cooperation and also that the rectification of the defects should lessen the need for any sentence to include a significant element for specific deterrence. 26 It is evident from Her Honour's judgment, and from the transcript of proceedings, that Kavanagh J took a significantly adverse view of what she considered to be the defendant's failure to take quick action to remedy the defects in its machinery. And whilst it is not expressly stated in her judgment, her Honour reflected this adverse view in her determination of penalty. This adverse view seems to be have been tempered to some degree by her Honour's acknowledgement that Mr Dahari had acknowledged the need to "rigorously apply his endeavours to ensure a safe working environment for his employees" and that he had "expended further monies to bring the equipment up to standard in relation to guarding the switches and labelling." Nevertheless, the penalty imposed was, in our opinion, a penalty towards the highest end of the range that might have been considered appropriate in this case. 27 This observation is supported by the cases referred to by the prosecutor involving crush or amputation injuries. The cases referred to were: WorkCover Authority of New South Wales (Inspector Dawson) v Robert John Waugh (1995) 59 IR 89; WorkCover Authority of New South Wales (Inspector Rech) v Defiance Foods Pty Ltd (unreported, Bauer J, CT 1080 of 1995, 1 December 1995); WorkCover Authority 0f New South Wales v Zac's Pax Pty Ltd (unreported, Fisher CJ, CT 1282 of 1994, 20 December 1995); WorkCover Authority of New South Wales (Inspector Mansell) v Australian Paper Limited (unreported, Marks J, CT 1229 of 1995, 28 March 1996); John William Ingle v Erineton Pty Ltd and John William Ingle v Aspex Paper Australia Pty Limited (unreported, Hungerford J, CT 1238 of 1996, 11 April 1997); Inspector Colin James West for the WorkCover Authority of New South Wales v Australian Veg-Tanners Pty Limited [1997] NSWIRComm 78; Inspector Glenn McCarthy v Advance Packaging Pty Ltd [1997] NSWIRComm 89; Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326; WorkCover Authority of New South Wales (Inspector Ankucic) v Namoi Cotton Cooperative Ltd [1998] NSWIRComm 351; WorkCover Authority of New South Wales (Inspector Barbosa) v Leigh Mardon Pty Ltd [1999] NSWIRComm 121; WorkCover Authority of New South Wales (Inspector Donnelly) v Riverina Wool Combing Pty Limited [2000] NSWIRComm 29; WorkCover Authority of New South Wales (Inspector McMartin) v Milltech Pty Ltd [2000] NSWIRComm 246; WorkCover Authority of New South Wales (Inspector Kitchen) v Tixana Manufacturing Pty Ltd [2001] NSWIRComm 76; WorkCover Authority of New South Wales (Inspector Batty) v Graincorp Operations Ltd [2001] NSWIRComm 127; Inspector Mahinder Seneviratne v Eric Roberts Trading Co Pty Ltd [2002] NSWIRComm 87; Inspector Frank Glass v BNG Battery Technologies Pty Ltd [2002] NSWIRComm 346; WorkCover Authority of New South Wales (Inspector Mansell) v Hayman Industries Pty Ltd [2003] NSWIRComm 154 28 We consider that her Honour erred in treating too harshly the issue of the time the appellant took to comply with the improvement notices and that greater leniency should have been shown in this respect than what is reflected by the sentence. In Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; 99 IR 29 the Full Bench quoted with approval the well known observation of Hungerford J in Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 that: the fundamental duty of the Court in this important area of public concern ... [is] to ensure a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace. 29 Hungerford J also observed, however, in the same judgment at 388 that: At the same time, the Court has a corresponding duty insofar as a defendant is concerned not to impose such a penalty as would be oppressively high. 30 After the original ten improvement notices were issued in August 2000 the appellant moved quickly to obtain quotes from contractors to undertake the work required. Mr Dahari said that he asked the contractors to carry out the work as a matter of urgency. On 12 September 2000 Mr Dahari sought an extension of time from the prosecutor because the contractors he had engaged had not been able to complete the work in the allotted time. Mr Dahari said that he did not seek to replace the contractors because they were familiar with his operations. The extension of time was granted to 15 October 2000. 31 On 6 December 2000 the prosecutor visited the appellant's premises and made certain observations about the appellant's non-compliance with aspects of the improvement notices. There was a further visit by the prosecutor on 12 December 2000 at which time the contractors engaged by the appellant were present, together with a consultant in occupational health and safety engaged by the appellant. It appears that further work was required to satisfy the requirements of the improvement notices and the appellant sought a further two weeks in which to complete it on the basis that the contractors had not properly understood what was required of them. The extension was granted except in relation to two improvement notices numbered 198711 and 198712 relating to Bread Improver Line No 2. The appellant was not using this Line - it was to be kept as a "spare". 32 On 15 December 2000 the prosecutor issued two new improvement notices numbered 198777 and 198778 that were in virtually identical terms to the improvement notices 198711 and 198712 issued on 4 August 2000. This was done in circumstances where the appellant had determined not to operate the No 2 line. Why the prosecutor extended time for compliance in relation to machinery that was operating but declined to extend time and in fact issued new improvement notices in relation to machinery that was not in operation, is not clear. 33 On 5 January 2001 Mr Dahari contacted the prosecutor and requested his attendance to ensure that all improvements had been carried out in compliance with the improvement notices. On 12 January 2001 the prosecutor visited the premises and although there was a small amount of work that had been overlooked there had been substantial compliance. On 31 January 2001 the prosecutor again visited the premises and noted that the improvement notices had been complied with. The cost to the appellant of remedying the defects was in the vicinity of $50,000. 34 We consider that the appellant understood its obligations to remedy the defects identified in the improvement notices in order to eliminate risks to safety and that the appellant took appropriate steps to achieve that objective. We accept that there was some tardiness on the appellant's part in complying with the notices and compliance should have been given the utmost priority. This delay in complying with the notices means that any penalty would not be as lenient as it otherwise might be. However, we do not consider the delay in complying in this case was of such a nature as to support a penalty at the highest end of the available range. 35 As to subjective factors, apart from the guilty plea, Kavanagh J did not identify a specific amount of discount. However, her Honour did indicate that in determining the pre-discount penalty she had taken into account the relevant subjective factors. These factors appear to have been contrition, the fact that the appellant had no prior convictions and the expenditure of monies "in bringing the equipment up to standard". We see no error in this regard. 36 In her judgment Kavanagh J referred to the financial position of the appellant. At par [28] her Honour stated: In assessing penalty, the financial status of the company is a consideration. Mr Moore, on instructions, submitted that there were no financial records for this year but that the company had suffered a 40 per cent loss of income reflecting the loss of a big contract. Clearly that was his instruction. However, Mr Dahari revealed he had lost that contract for only three weeks. The company has had a turnover of $1.7 million in the financial year 1999; $1.9 million in the financial year 2000 and expects a turnover of up to $2.2 million in the last financial year. It is maintaining its level of production. I find the defendant company is one with financial means and do not accept that I should take into account the submission that it has lost 40 per cent of its potential income this financial year. 37 The assistance provided to her Honour regarding the appellant's financial means was quite unhelpful. Nevertheless, her Honour's focus on turnover as providing the basis upon which to reach a conclusion that the appellant was a company "with financial means" drew her into error. The appellant was a company that acted as a trustee for a unit trust. The directors of the company were Mr Dahari and his wife. The net assets of the unit trust as at 30 June 2001 were $100.00. There was also in existence a family trust whose net assets as at 30 June 2001 were $10.00. Net profit before tax for the 2000/2001 financial year was $13,633.65. We are not satisfied that the evidence relating to the appellant's means told the whole story but it does not appear that her Honour paid any regard to the question of assets and, as we have noted, focused entirely on turnover in reaching the conclusion that the appellant had financial means. We consider that in those circumstances, taking into account our view about the severity of the sentence, her Honour's judgment gave rise to an injustice and error requiring appellate review. 38 Kavanagh J addressed the principle of totality and in doing so noted that: 35 In the application of the principle of totality, the Commission in Court Session is to have regard to the overall criminality in determining the overall sentence/penalty. When the Industrial Relations Commission of New South Wales is sitting in Court Session considering prosecutions under the Occupational Health and Safety Act 1983 there are, at times, common elements to charges . In such cases the view of the Full Bench must be taken into account and regard must be had, when considering more than one offence, to the principle that a defendant is not to be punished more than once for elements which are common to the offences being considered. The statement of the Full Bench of the Court in Keenan [at 37] that the Commission in Court Session must have regard to "the principle that a defendant is not to be punished more than once for elements which are common to the offences" does not in any way limit the application of the principle of totality to sentence/penalty in matters which do not contain similar elements in the offences. 36 I believe this is an appropriate matter in which to apply the principle of totality. 39 After discounting the penalties for the utilitarian value of the guilty pleas her Honour further reduced the aggregated penalties by $40,000 leaving total penalties of $168,000. This amount was apportioned evenly between the two offences. 40 The application of the totality principle was considered at length by the Full Bench in Crown in Right of the State of New South Wales (Dept of Education and Training) v Keenan (2001) 105 IR 181 and we respectfully adopt the approach laid down in that case. 41 In relation to the offence in matter No IRC 6718 of 2001 and having regard to the errors we have identified we consider that the fine of $130,000 was manifestly excessive. Having regard to the objective seriousness of the offence we consider that an appropriate penalty is $100,000. Having regard to the subjective factors (other than the guilty plea) we would reduce this amount by five per cent. We consider her Honour was correct in granting a discount of 20 per cent for the guilty plea. This results in a penalty of $75,000. 42 In relation to the offence in matter No IRC 6721 of 2001, Kavanagh J imposed a penalty of $130,000. The charge in this matter related to five pieces of machinery or equipment whereas the charge in matter No IRC 6718 of 2001 related to just the one Bread Line. However, the charge in this latter matter identified three specific failures (failure to provide and maintain, failure to provide adequate instruction and training and failure to provide adequate information, instruction or training) whereas in the former matter the failures identified in the charge were a failure to provide and maintain and a failure to conduct any adequate machine guarding risk assessment, albeit in relation to five pieces of machinery. 43 We consider that her Honour was correct in assessing the gravamen of the offences to be the same. However, we take the same view about the penalty in matter No IRC 6721 of 2001 as we have in matter No IRC 6718 of 2001 that is, it is manifestly excessive. We consider an appropriate penalty in matter No IRC 6721 of 2001 to be the same as that in matter No IRC 6718 of 2001, namely, $100,000 with discounts totalling 25 per cent leaving a penalty of $75,000. 44 In considering the totality principle we are of the opinion that there is a very substantial overlap between the two offences. The primary failure alleged in both charges related to the failure to provide and maintain plant and machinery manifested by failures to guard, isolate and properly label the various pieces of plant and machinery. We consider that the aggregate penalty of $150,000 should be reduced to $100,000, that is, $50,000 penalty for each offence. 45 We consider that such penalties reflect the criminality of the offences. In this regard we observe that there was a general failure on the appellant's part to adequately guard, isolate and label plant and machinery on the premises and this constituted a serious risk to the health and safety of employees. Orders 46 We make the following orders: 1. The appeal is upheld. 2. The fines imposed by Kavanagh J in matter Nos IRC 6718 and 6721 of 2001 are quashed. 3. In relation to matter No IRC 6718 of 2001 the appellant is fined the amount of $50,000. 4. In relation to matter No IRC 6721 of 2001 the appellant is fined the amount of $50,000. 5. The respondent is to receive a moiety of each fine. 6. The appellant shall have its costs on appeal as agreed, or in default, as assessed. 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.