Industrial Relations Commission of New South Wales in Court Session CITATION : WorkCover Authority of NSW (Insp McMartin) v Milltech Pty Limited [2000] NSWIRComm 246 PROSECUTOR: PARTIES : WorkCover Authority of NSW (Insp McMartin) DEFENDANT: Milltech Pty Limited FILE NUMBER: IRC6191 of 1999 CORAM: Kavanagh J CATCHWORDS : Prosecution under s15 - plea of guilty - gravity of an offence with element of foreseeability - consideration as to early plea when general issue as to validity of summons raised and litigated - leave to reserve question as to validity of summons - plea of guilty accepted as early plea in the circumstances therefore application of Supreme Court guidelines for discount for early plea - small business held to be not an individual trader but question as to "oppressive" level of penalty LEGISLATION CITED : Occupational Health and Safety Act 1983 Industrial Relations Act 1996 Lawrenson Diecasting Pty Ltd v WorkCover Authority of NSW (Insp James Swee Ch'ng) (1999) 90 IR 464 Haynes v James Glass & Aluminium Pty Ltd (unreported, Fisher CJ, CT91/772-775, 20 May 1994) Department of Mineral Resources of NSW (Chief Insp B R McKensey) v Kembla Coal and Coke Pty Ltd (unreported, Walton J, Vice President, IRC142 of 1998, 16 August 1999 CASES CITED : WorkCover Authority of NSW (Insp Callaghan) v Saunders Constructions Pty Ltd (unreported, Maidment J, CT93/1062, 26 November 1993) Mauger v Krcmar Engineering Pty Ltd 47 IR 359 John Fisher v Samaras Industries Pty Ltd (unreported, Hungerford J, CT95/1230, 21 March 1996) Department of Mineral Resources of NSW v AM Hoipo & Sons Pty Ltd [2000] NSWIRComm16 HEARING DATES: 08/04/2000; 10/20/2000 DATE OF JUDGMENT: 12/08/2000 PROSECUTOR: P.E. McDonald of counsel SOLICITORS: PricewaterhouseCoopers Legal LEGAL REPRESENTATIVES: DEFENDANT: J.S. Coombs QC SOLICITORS: ACM Lawyers JUDGMENT: - 19 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date: Fri 8 December 2000 IRC6191 OF 1999 WORKCOVER AUTHORITY OF NSW (INSP McMARTIN) v MILLTECH PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 This is a prosecution under s 15(1) of the Occupational Health and Safety Act 1983 brought by the WorkCover Authority of New South Wales (Insp McMartin) against Milltech Pty Limited. The summons alleges: . . . the Defendant . . . an employer, breached Section 15(1) of the Occupational Health & Safety Act 1983 at premises located at Selwyn Street, Mayfield in the State of New South Wales, in that it failed to ensure the health, safety and welfare of its employees, in particular, Terry Wallace Caslick, in that it failed to provide a Reeler Machine that was safe and without risks to health at the premises. Particulars of the Defendant's failure are as follow: (a) failure to adequately guard nip points on the side of the bar straightening unit of the Reeler Machine; (b) failure to adequately secure a guard to the side of the bar straightening unit; (c) failure to ensure that the space between the charge pinch roll unit and the bar straightening unit of the Reeler Machine was adequately guarded; (d) failure to adequately secure a mesh guard about the charge pinch roll unit, the bar straightening unit and the space between the units. 2 There is an amended statement of facts which relevantly reads: 1. At all material times the Prosecutor was an Inspector appointed and empowered by Section 48 of the Occupational Health and Safety Act 1983 to institute proceedings in this matter. 2. At all material times the Defendant, MILLTECH PTY LIMITED (ACN 002 299 158), was an incorporated company with its registered office located at PricewaterhouseCoopers, Level 2, 14 Watt Street, Newcastle in the State of New South Wales. 3. At all material times the Defendant: (a) carried on the heat treatment and processing of alloy bars at premises located at Selwyn Street, Mayfield in the State of New South Wales (the "premises"); (b) employed Terry Wallace Caslick ("Caslick'), 31 years of age, as a machine operator; (c) owned and operated a bar straightening machine known as the Reeler Machine (the "bar straightening machine"). 4. On 16 February 1998 at approximately 6.00 p.m., Caslick was operating the bar straightening machine when his gloved left hand was caught by a rotating bar being processed by the machine. Caslick sustained injuries which resulted in the amputation of his left arm below the elbow. 5. Caslick commenced employment with the Defendant in approximately September 1996. 6. On 17 February and 25 March 1998 the Prosecutor attended the premises and observed as follows: (a) premises which the accident occurred were located approximately 100m inside the Selwyn Street entrance of BHP at Port Waratah. The building was occupied by the Defendant on lease from BHP and was identified by a sign displayed above the front door which read "No 1 Warehouse". The building is approximately 110m long x 34m wide x 15m high; (b) the building contained racks of steel except for a section in the centre which contained a bar straightening machine referred to as a Reeler machine; (c) the machine ran parallel to the north-east wall of the warehouse and was approximately 1200 millimetres from the wall at the control station. The name "Bigwood Bar Straightener" was displayed on the electrical control panel adjacent to the machine. The machine was approximately 20400 millimetres wide and consisted of 5 units being the infeed table and conveyor, the charge pinch roll unit, the bar straightening unit, the discharge pinch roll unit and the outfeed conveyor and kick-off table; (d) located on the infeed table on 17 February 1998 were a large number of 24 millimetres diameter by 6020 millimetres long bars in a deformed condition; (e) the infeed conveyor consisted of eight rolls 180 millimetres diameter by 600 millimetres wide, spaced 1070 millimetres apart. The top edge of the rollers was 790 millimetres above the floor. The second, fifth and seventh rollers were electrically driven with individual electrical motors directly attached. The remaining rollers were idle rollers; (f) the conveyor line was fitted with "J" guard, which enclosed the operator's side, which was between the machine and north east wall of the building. This guard was 1130 millimetres high. In this guard there were 4 viewing points, one between the fourth and fifth roller, one each above the sixth and eighth rollers and one between the seventh and eighth roller. These were cut out of the steel plate guard and each was approximately 260 millimetres long by 160 millimetres high with 12 millimetres diameter bars welded horizontally 30 millimetres apart except for the port over the eighth roller which was an open port on 17 February 1998 and was closed with the bars welded in position on 25 March 1998 inspection. This port was immediately adjacent to the operator's position. (g) The bars were fed from the conveyor through a funnel guide 450 millimetres long by 200 millimetres diameter into a charge pinch roll unit which in turn fed them into the straightening unit. (h) The charge pinch roll unit was 1160 millimetres long by 500 millimetres wide by 1120 millimetres high. It comprised of an electrically driven roller fixed in the upper position which was 180 millimetres diameter x 90 millimetres wide and two idle rollers 140 millimetres diameter by 90 millimetres wide set 110 millimetres apart. These two rollers were in a line of travel from the infeed conveyor rollers. The bottom rollers were raised pneumatically to bring the bar in line to be fed by the driven roller into the straightening unit of the machine; (i) the pneumatic control to raise the bottom rolls was located on the north-east side of the unit 200 millimetres below the top on the left side of the operator's position; (j) the bottom rollers were 110 millimetres below the top roller in the open position and their top edge was 780 millimetres above the floor and in line with the top edge of the infeed conveyor rollers; (k) the bottom unit was raised by a 150 millimetres diameter air cylinder and was guided by 4 posts, each 60 millimetres diameter and approximately 400 millimetres apart; (l) this unit and the straightening unit were spaced 500 millimetres apart. This space was spanned by the bar being straightened. On 17 February 1998 there were two bars spanning this area. One bar was resting on the frame of the straightening unit adjacent to the straightening rollers and the second was between the straightening rollers with 5300 millimetres of the bar protruding from the nip point of the straightening rollers back onto the infeed conveyor. From the end of this bar it was 4400 millimetres to the position where the operator was injured. The bars were 6020 millimetres long; (m) on the date of inspection there was no guarding over the charge pinch roll unit nor the space between it and the straightening unit. An "L" shaped mesh guard was on the floor against the straightening unit. Manfred Reis (a Director of the Defendant) demonstrated that this guard was for this area by placing it in the correct position; (n) the straightening unit was 2100 millimetres long by 3600 millimetres wide by 2000 millimetres high. It consisted of two electrically driven rollers in line and inclined at 24 degrees from the horizontal and 3 idle rollers in the horizontal position. The driven rollers were approximately 550 millimetres long by 300 millimetres diameter with a concaved surface reduced to approximately 250 millimetres diameter. The idle rollers were approximately 250 millimetres long by 250 millimetres diameter with a slightly concaved surface. These rollers were covered by mesh guards on each end, over the top and on the opposite side to the operator. The guard on the operator's side which was a mesh panel 2000 millimetres long by 900 millimetres high was removed and placed on top of the unit at the inspection on 17 February 1998. There was a gap of approximately 100 millimetres between the base of the unit and bottom of the side guards which were level with the top of the idle rollers; (o) at the front of the straightening unit at the infeed area there was a cast steel section 2000 millimetres long x 300 millimetres wide with the top edge 850 millimetres above the floor. This had a "J" section at the centre which was 150 millimetres wide with the bottom edge 740 millimetres above the floor. This case section was secured by four 50 millimetres diameter tie bolts in a horizontal position. The front two tie bolts were 605 millimetres and 960 millimetres above the floor and in line with the front face of the straightening unit. The rear tie bolts were the same height from the floor as the front bolts and 480 millimetres back; (p) the distance from the tie bolts at the front to the nip point on the straightening rolls was approximately 800 millimetres. The opening into this area was approximately 200 millimetres square; (q) once the bars were fed through the straightening unit, they were fed onto the outfeed conveyor and table via a discharge pinch roller unit. This unit was similar in dimensions to the charge pinch roller unit and similar in operation, however it was inverted. The pneumatic control to close the rollers on this unit was located on top of the unit on the north-east side; (r) the outfeed unit conveyor was 8700 millimetres long consisting of a "U" channel, which was 200 millimetres wide by 130 millimetres deep and 780 millimetres above the floor. There are 5 idle rollers equally spaced along this channel. The bars were picked up off these rollers by a pneumatic operated rocker bar and fed onto the outfeed table. These rollers and the channel were guarded by a hood guard 1300 millimetres high. (s) the pneumatic kick-off control was located on the north-east side of the outfeed conveyor hood guard 1300 millimetres from the discharge pinch rolls control; (t) the outfeed table consisted of 6 railway line sections slightly inclined away from the conveyor. The rails were 1950 millimetres long and 960 millimetres above the floor with an 80 millimetres incline over the length. These rails had manual stops at the end. Below these rails at the end there were two collection frames with the first being bridged by manually operated arms. Each bay was approximately 300 millimetres wide by 600 millimetres high. On 17 February 1998 there were 3 bars on the outfeed table. Each collection bay had two layers of bars stored in each which were separated by 100 millimetres square dunnage. The bottom layers had 27 bars in each which were 32 millimetres diameter and the top layers were 24 millimetres diameter bars with 20 in the outer frame and 11 in the inner frame; (u) located on the north-east side of the machine along the entire length and 540 millimetres above the floor was an emergency stop lanyard; (v) located in the building column adjacent to the charging pinch roll unit were 3 control switches 1 metre above the floor. These switches had a central off position and a forward and reverse position. These controls were labelled from left to right: A. Bigwood straightened controller B. Pinch Rolls C. Individual Rolls Feed Roll controller (w) Parallel to the infeed conveyor 1 metre away were two electrical control panels. The first was 1200 millimetres from the control switches and displayed a label "Bigwood Bar Straightener". The second panel was 1500 millimetres away and display various control switches for each unit of the machine on the right hand side and incoming electrical supply 415V mains on the left; (x) lying on top of the charge pinch roll unit was a hand tool with one end in the shape of a hook and the other with a triangular handle. This tool was made by 16 millimetres diameter bar and was approximately 850 millimetres long. A second smaller hand tool of similar shape made of 12 millimetres diameter bar and approximately 350 millimetres long was located on the north-east side of the cast steel section of the straightening unit. Mr Reis indicated these were bar lifting tools; (y) with the smaller tool was a leather glove. A second leather glove was wrapped around the bar, which was located in the straightening rollers. This glove was level with the front tie rods on the straightening unit. 7. On 17 February 1998 the Prosecutor issued a Prohibition Notice to the Defendant requiring it to secure guard all moving parts of the bar straightening machine including the bar being fed into the machine and to label all operating controls. 8. The Defendant has taken the following action concerning the bar straightening machine since the date of Caslick's accident: (a) the whole of the feed side of the rollers has been enclosed in a 2 metre high steel mesh fence; (b) bars to be straightened have been placed on the feed rack (within the enclosure) by overhead crane without the need for contact by the operator; (c) openings have been provided in the enclosure for the manipulation of feed bars by means of tools designated for this purpose. Bars and moving machinery cannot be reached by hand through these openings; (d) entry to the enclosure is by means of a locked gate. The lock is part of an Integrated Trapped Key Interlocking Device which complies with the principles of section E5 of AS4024.1 – 1996 (Safe Guarding of Machinery); (e) the entry area of the bar straightening machine has been fitted with a steel mesh guard which prevents contact by the operator with feed bars or moving machinery; (f) an access slot has been provided for the manipulation of bars which also prevents the operator contacting feed bars or moving machinery; (g) removal of the guard requires the opening of the lock of the Interlocking Device; (h) the straightening rolls have been fully enclosed by wire mesh guards; (i) access to the moving components of the rolls is available by the removal of a guard which requires the opening of the lock of the Interlocking Device; (j) power supply to the electric drive motors of the bar straightening installation requires that an isolating switch be closed by an operating key; (k) this same key is required to open the gate to the enclosure and to open each of the two removable guards; (l) power supply cannot be maintained unless the key remains in the isolating switch; (m) the key cannot be removed from the guard locks unless the guards are in place and the lock closed; (n) the key cannot be removed from the enclosure gates unless the gate and lock are both closed; (o) signs have been fixed to the wire enclosure, which state the following: Ÿ No Person is to Remain Inside Enclosure if Machine is Able to be Operated Ÿ Climbing Over Fence is Prohibited (p) minor openings to low risk hazards were being plated or screened over. 9. From his observations and investigations the Prosecutor found as follows: (a) on the date of his accident, Caslick was working with another operator employed by the Defendant, Jason Grunsell. Both employees were unsupervised during the afternoon while carrying out work on the machine due to their supervisor, Scott Wilson attending Technical College; (b) both employees had finished straightening 32 millimetres diameter bars and commenced to straighten 24 millimetres diameter bars. The employees experienced difficulty in feeding the 24 millimetres diameter bars to the charge pinch roll unit; (c) Grunsell subsequently removed an unsecured mesh guard about the charge pinch roll unit, the bar straightening unit and the spaced between the units in order that the 24 millimetres diameter bars could be fed by hand using a small steel hook. The mesh guard was not adequately secured to the Reeler Machine and was able to be lifted off without any difficulty. (d) Following removal of the unsecured mesh guard by Grunsell, Caslick commenced feeding 24 mm diameter bars from the charge pinch roll unit to the bar straightening unit using his gloved left hand, when his gloved left hand became caught by a rotating bar between the charge pinch roll unit and the bar straightening unit. Caslick's injuries resulted in the amputation of his left arm below the elbow; (e) The defendant failed to ensure that the space between the charge pinch roll unit and the bar straightening unit of the machine was adequately guarded; (f) immediately he realised that Caslick's left arm was caught in the machine, Grunsell stood on a trip wire to shut down the machine; (g) the side of the bar straightening unit of the machine was not adequately guarded and access to several nip points was available; (h) a guard which was constructed for the side of the bar straightening unit of the machine was not adequately secured to the machine and was able to be lifted off without any difficulty. The defendant enters a plea of guilty to the charge. 3 In consideration of penalty, the Full Bench commented in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 at 474: . . ., in our view, it 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'. and the Full Bench said (at 474): It has been observed on a number of occasions that subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to consideration of the nature and quality of the offence. With approval, the passage from the judgment of Fisher CJ in Haynes v James Glass & Aluminium Pty Ltd (unreported, CT91/772-775, 20 May 1994) was cited (at 474) where his Honour said: . . . While previous good industrial citizenship and the absence of prior convictions are proper considerations, their importance lies well behind the two primary aspects of the matter, namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce. The Full Bench notes that (at 476): . . . the proper approach is to first consider the gravity of the offence viewed objectively. And also (at 476): In the case of an offence under s 15(1) of the OH & S Act, there are a number of factors which may tend to establish the existence of an objectively serious offence. It will be a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and feasible: see Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, CT90/1214, 30 June 1992) at 9. The gravity of the consequences of an accident does not, of itself, dictate the seriousness of the offence. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and the culpability of the defendant; see Tyler v Sydney Electricity (1993) 47 IR 1 at 5. In Inspector Hannah v Wonar Pty Ltd , the Full Bench indicated (at 9), properly in our view that 'a breach that was quite unlikely to lead to serious consequences, might be assessed on a different basis to a breach where there was every prospect of serious consequences.' 4 Mr Caslick had his left gloved hand caught by a rotating bar being processed by the machine. The agreed facts reveal that a worker, Mr Grunsel who was working with Mr Caslick had removed the unsecured mesh guard above the charge pinch roller unit after the employees had had difficulty in feeding 24 millimetre diameter bars into the charge pinch roller unit. The evidence revealed the mesh guard was not only not adequately secured to the reeler machine but it was able to be lifted off without any difficulty. Having lifted the guard the workers proceeded with the task at hand feeding the 24 millimetre diameter bars into the machine. While performing this task, Mr Caslick's gloved left hand became caught by a rotating bar between the charge pinch roller unit and the bar straightening unit and was dragged into the machine. Mr Caslick's injuries resulted in the amputation of his left arm below the elbow. 5 The operation of the reeler machine is a one man operation. However, for the last three and a half years it has been a two man operation because the employer acknowledged the difficulties of the task. Mr Reis, the managing director of the defendant company, in his evidence swears: The guarding of the reeler machine and the prohibition on hand feeding small bars into the reeler were regularly discussed in my conversations with employees and in the monthly safety meetings. . . . I gave safe working instructions to Terry Caslick, Jason Grunsel and other employees when working on the reeler machine. One particular thing I told them was you never touch the rotating bars or one that is about to rotate because a BHP employee had lost his arm some years earlier." 6 Evidence revealed it was common practice amongst workers to remove the guards from the in-feed area of the machine. Mr Caslick said in an interview with the WorkCover Authority: Yes it was common practice. It was the only way we could feed the bars in because they wouldn't fix the pinch rolls properly to take the small bars. Q. Were the supervisors or management aware the machine was operated with the guards off? A. Yes, everyone, the safety officer and anyone that had anything to do with it. 7 It was in late 1997 Mr Reis had been made aware of the practice of operators removing the guard and also using their hands rather than a hook to feed the machine and he specifically addressed this issue at staff meetings with the words "No guard means no operation." He swears: I was aware of some difficulties in feeding small bars into the machine which is why I issued those instructions. 8 The essence of the offence pleaded against the defendant is that it failed to adequately guard dangerous machinery. While there was a guard for the machine or a dangerous part thereon, it is clear the defendant knew the employees removed the guard. The guards were not locked on. The defendant issued warnings in safety meetings that the guards should not be removed however this circumstance is not sufficient to comply with the proactive obligations placed on an employer by the Act. Mr Reis reveals he was aware of the possible consequences in that he referred to the injuries suffered in the past by a BHP employee whilst using the machine. 9 The Industrial Relations Act 1996 places an onus of strict liability on an employer to provide a safe workplace. That strict liability is acknowledged by the defendant's plea of guilty to the charge. 10 Any assessment of the objective seriousness of this offence, has to take into account that the defendant was aware of the practice by the employees of taking off the guards and although it warned them against this practice, it took little proactive action to ensure that the practice could not occur. The offence thereby takes on an element of forseeability. As Walton J, Vice President, in Department of Mineral Resources of New South Wales (Chief Insp B. R. McKensey) v Kembla Coal and Coke Pty Ltd (unreported, IRC142 of 1998, 16 August 1999) said (at 37): Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng, Matter No. IRC 3064 of 1997, 12 August 1999 at 39), 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: see Camilleri's Stock Feeds (at 700); James Moore v Vibro-Pile (Aust.) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at p17) and The University of Sydney (at 16). 11 Some subjective features have also been placed before the court in consideration of penalty. The maximum penalty prescribed by the Parliament for this offence was $550,000. That statutory maximum represented an increase from $250,000 for offences committed after 1 February 1996. The strict nature of the duty of care imposed on an employer by the Act coupled with the increase in penalties by the legislature reveals the importance placed on a safe working environment in New South Wales. 12 The defendant has no prior convictions. The defendant had clearly in place a significant site safety operation. Further, the defendant took steps immediately following the accident to ensure no similar incidents could occur. They engaged consultant engineers who implemented immediately a system of enclosure where the whole of the feed side of the rollers has been enclosed in a two metre high steel mesh fence. The bars are now passed on to the feed rack by an overhead crane; openings are in the enclosure for the manipulation of feed bars by means of tools designed for this purpose. Entry to the enclosure is by means of a locked gate. There is a further internal entry bar across the straightening machine preventing an operator contacting feed bars or moving parts. The removal of the side guard requires the opening of a lock. There are now power controls on the operation of the machine where supply immediately shuts off if the guard is removed and/or the enclosure unlocked. 13 There is a significant induction and training system implemented for all staff. New employees work under the supervision of experienced employees until they are assessed as capable. There are also various levels of competency on which employees are graded and paid in accordance with the enterprise agreement. Mr Caslick had been considered a most proficient operator. 14 From an analysis of all the steps the defendant has since taken to ensure this machine is safe in its operation, it is clear that the corporation has had to spend significant moneys to ensure site safety. It is a great pity that such expenditure had to be invested after what was well within their knowledge as a foreseeable risk of injury if the machine was misused. The words of Maidment J in WorkCover Authority of NSW (Inspector Callaghan) v Saunders Constructions Pty Ltd (unreported, CT93/1062, 26 November 1993) seem apposite in the circumstances: Commendable though it is to introduce appropriate occupational health and safety measures after the event it needs to be remembered that the legislation is not directed at ex post facto measures, it requires positive preventative steps being taken to ensure that workers are afforded safe working environments irrespective of their own laxities. 15 There is some history to this matter. The prosecution was first mentioned in the Registry on 14 February 2000. On 27 March 2000 following the filing of an amended summons as to the details of the charge, the defendant entered a plea of guilty. The matter was then set down for hearing on 4 August 2000 by this court at a mention on 13 April 2000. However, some issues as to the validity of the summons were raised on 4 August 2000 when the defendant filed a Notice of Motion seeking relief including an order that the amended summons in the proceedings be struck out or stayed permanently. 16 The question as to the validity of the summons then became an issue as did the validity of the plea of guilty which had been entered. The hearing on all issues began on 4 August 2000 and various applications by both the prosecutor represented by Ms P.E. McDonald of counsel, and Mr J.S. Coombs QC for the defendant were heard. 17 The matter was further stood over part heard to 30 October 2000. On that day Mr Coombs noted formally his objection as to the defects in the summons. He conceded that if this court were to follow the authority of the Full Bench in Ridge Consolidated Pty Limited v WorkCover Authority of NSW (Inspector Mauger) [2000] NSWIRComm 151 then his Notice of Motion would fail. The court made clear it intended to follow the Full Bench authority of Ridge. To protect the defendant's interest in the event the Full Bench decision of Ridge was overturned, the defendant's objection as to the defects in the summons were noted and stay on the record for the purpose of any appeal by the defendant should the authority of Ridge be overturned. The defendant otherwise confirmed its earlier plea of guilty. There was no objection from the prosecutor as to this course of events to be entered on the record. 18 In R v Thompson; R v Houlton [2000] NSWCCA309, the Court of Criminal Appeal introduced guidelines for the utilitarian value of an early plea of guilty in the consideration by a court as to penalty. An application has been made by Mr Coombs for the defendant company for a reduction in penalty in this matter given, as he submits in a true analysis of the history of the prosecution, there was entered an early plea of guilty. 19 In the circumstances the prosecutor did not then cavil with the defendant's submission that there had been an early plea of guilty entered notwithstanding the history of litigation that has ensued. I accept there was an early plea of guilty under the circumstances. The plea however does not appear to the court to be entered at the earliest possible date as the record clearly shows some short negotiations ensued leading to an amended summons being filed. Nevertheless I intend to allow for the utilitarian value for the plea a 20% discount as to penalty. 20 One further consideration as to mitigation of penalty was submitted by the defendant for the court's consideration. The defendant submitted the company should be viewed as an "individual" attracting a much less onerous penalty or at least be considered as the financial operation of an individual. Mr Reis is the managing director of the company. Profits are shared between Mr Reis and his wife. The defendant relies upon the view of Fisher CJ in Mauger v Krcmar Engineering Pty Limited (47 IR 359 at point 7): The Commission has on several occasions held that it was appropriate to look at the nature of the Company to ascertain whether in fact it was truly a corporation within the meaning of that description in the Occupational Health and Safety Act 1993 or whether its true nature, even though there was some incorporation was that of an individually run business incorporated purely for the convenience of book-keeping and perhaps making appropriate tax arrangements. 21 In consideration of the subjective features of the breach, Mr Coombs submitted the court should also consider a penalty not "onerous" in the circumstances. 22 The corporation has a turnover well over $1,000,000 per year. From the facts the company debt is approximately $500,000 met through various loans. Mr Reis himself invested $150,000 of the capital. He and his wife take out two modest salaries of $36,400 and $21,840 respectively. They each hold a company car. Clearly all profits are retained to fund increasing stock levels and the purchase of equipment. Very recently the company has been given notice to quit their site by BHP, and they have been advised to remove the operation to another site will cost a further $300,000. The asset position of the company is also valued at over $1 million but is mostly in its stock of steel. 23 In the circumstances, with 11 employees and a significant financial turnover I find the company cannot be perceived as the operation of an individual. The court rejects this application. However, the implementation of penalty must not be so oppressive in the circumstances as to force the business to close. 24 It seems apposite in the circumstances to consider the facts as did Hungerford J in John Fisher v Samaras Industries Pty Limited (unreported, 21 March 1996, No CT1230 of 1995) where his Honour states (at 12): I . . . would only echo what I see to be the fundamental duty of the Court in this important area of public concern, that 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. 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. Again, I echo Cullen J in WorkCover Authority of NSW (Insp Gordon) v Walco Elevators Pty Ltd (CT93/1117, 13.3.96) in referring to what was observed by Smithers J in Trade Practices Commission v Stihl Chainsaws (Australia) Pty Limited (1978) ATPR 40-091 at 17,896 as adopted by Forster J in (Trade Practices Commission v Lois (Australia) Pty Limited (1986) ATPR at 47,225. 25 This issue as to the consideration of the financial status of a defendant was also addressed in Department of Mineral Resources of NSW v AM Hoipo & Sons Pty Ltd [2000] NSWIRComm16 where Walton J, Vice President said (at 48-50): . . . it was submitted that as a matter of discretion the Court should take into account the financial circumstances of the defendant and the fact that its corporate structure was in reality a vehicle for Mr Hoipo's personal activities. In this regard, I note the judgment in Inspector Gordon v MIJO (NSW) Pty Limited (unreported, Cullen J, CT1002 of 1993, 2 December 1993), in which his Honour commented (at 5): The Court does not have a discretion to consider the maximum penalty at some level other than that provided by the Statute. Where a corporation is involved, the appropriate maximum penalty is that applicable to a corporation and not to an individual regardless of how or why the corporation was established. The three judgments of the Chief Judge in Inspector Robins v CT Plumbing Pty Limited (unreported, Fisher CJ, No 522 of 1991, 16 December 1991), Mauger v Krcmar Engineering Pty Limited (1993) 47 IR 359 and Inspector Young v Hidane Pty Limited (unreported, Fisher CJ, CT 1113 of 1993, 30 September 1993), do not support this submission. Individual factors going to capacity to pay are not relevant in the determination of penalty. They may be relevant at a later time in terms of any application the defendant may make as to consideration of payment, but they are not relevant as to the determination of penalty. 49 I respectfully agree that the Court has no discretion to apply a maximum penalty other than that prescribed by the legislation: see also WorkCover Authority of New South Wales (Inspector Ankucic) v Lyndhurst Trading Co Pty Limited (unreported, Walton J, Vice-President, Matter No. IRC1072 of 1998, 4 February 2000) at 23 - 24. 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 Limited (unreported, Wright J, President, Matter No. IRC3418 - 3423 of 1997, 24 May 1999 at 41). 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 far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200 - 201. 26 I accept the submission of Mr Coombs that on consideration of penalty the court takes into account the financial resources and income of the defendant but in the context of the appropriate level of penalty for the gravity of the offence. 27 The court further takes into account the other mitigating factors placed before the court including not only the utilitarian value of the plea (as referred to above) but the fact that this business has been operating as a heavy industry area for eight years without any recorded breach; that there pre-existed an awareness of the need for a safe work culture; that some warning had been given to workers about the practice; that there were safety meetings held; that it is a small operation contributing to employment in regional New South Wales; that there have been significant expenditures of moneys to indicate real contrition by the employer and to ensure future safe working. In all the circumstances the court believes there should be a further mitigation of penalty to the 20% discount to be applied for the utilitarian value of the plea. 28 The court accepts the plea of guilty is proper in the circumstances and enters a verdict against the defendant. 29 I fine the defendant $60,000 with moiety to the WorkCover Authority. 30 The defendant shall pay the prosecutor's costs as agreed or 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.