Industrial Relations Commission of New South Wales in Court Session CITATION : WorkCover Authority of New South Wales (Inspector Marshall) v BBC Hardware Limited [2004] NSWIRComm 296 PROSECUTOR: WorkCover Authority of New South Wales PARTIES : (Inspector Marshall) DEFENDANT: BBC Hardware Limited FILE NUMBER: 62 of 2004 CORAM: Staunton J CATCHWORDS : Occupational health and safety - plea of guilty - objective seriousness of the offence - obvious foreseeability of risk to safety - readily and easily available remediation steps which could have been taken by the defendant before the accident to prevent the injury occurring - general and specific deterrence applicable - plea entered at the earliest opportunity - additional subjective features - defendant now part of corporate entity with positive committment to occupational health and safety - consideration of Victim's Impact Statement - defendant convicted - penalty imposed - order as to costs. Occupational Health and Safety Act 2000 LEGISLATION CITED : Factories Shops and Industries Act 1962 Crimes (Sentencing Procedure) Act 1999 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464 CASES CITED : Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 99 IR 29 R v Thompson, R v Houlton (2000) 49 NSWLR 383 HEARING DATES: 09/27/2004 DATE OF JUDGMENT: 09/27/2004 PROSECUTOR: Mr P Lowe of counsel SOLICITORS: WorkCover Authority Legal Group DEFENDANT: LEGAL REPRESENTATIVES: Mr B Hodgkinson SC Mr M Cahill of counsel SOLICITORS: Lander & Rogers Lawyers JUDGMENT: - 15 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM : Staunton J DATE: 27/9/2004 IRC Matter No. 62/2004 WorkCover Authority of New South Wales (Inspector Marshall) v BBC Hardware Limited Prosecution arising under s8(2) of the Occupational Health and Safety Act 2000 Judgment NSWIRComm 296 1 The defendant operated a national chain of hardware stores. As part of that, it operated a hardware and building supply business from premises located at Green Hills near Maitland in New South Wales. 2 Mr Neil Farquharson was employed by B & B Transport Pty Limited. That company had a contract with the defendant to deliver goods on its behalf. On 17 January 2002, Mr Farquharson drove his employer's truck into the defendant's premises at Green Hills to load up supplies for delivery. He parked his truck on a flat section of the defendant's yard and from which the yard then commenced to slope upwards. 3 A forklift operated by an employee of the defendant was being utilised to load plywood into a utility parked on the sloping section of the defendant's yard. The forklift was parked with the tynes off the ground, pointing downhill. It was in gear with the handbrake on. The driver of the forklift had alighted from the forklift to assist in loading the plywood into the parked utility. 4 As is described in the agreed facts, a clunking sound was heard and without warning, the forklift rolled down the slope and struck Mr Farquharson who was standing beside his truck. He was pinned between the load of the forklift and the side of the table tray of his truck. Mr Farquharson sustained severe injuries and died later that day in hospital. 5 As a result of the accident, the defendant was charged with the breach of s8(2) of the Occupational Health and Safety Act 2000. The particulars of the offence being that the defendant: Failed to ensure that persons not in its employment, in particular Neil Gregory Farquharson, were not exposed to risks to their health and safety arising from the conduct of its undertaking whilst they were at its place of work contrary to Section 8(2) of the Occupational Health and Safety Act 2000 In particular the defendant failed to maintain a safe system of work for the use and operation of forklifts used in the loading and unloading of vehicles in that the defendant failed to ensure adherence at the subject premises to its policy that forklifts were not to be parked on a slope or gradient. 6 In these proceedings, the prosecution have tendered an agreed statement of facts which relevantly discloses: [1] The Defendant operated a national chain of hardware stores and, amongst other things, carried on the business of hardware and building supplies from premises situated in Green Hills (the premises) in the State of New South Wales. [2] The Defendant was, at all material times, an employer. [3] The Defendant had care and control of the yard of the premises used for the loading and unloading of motor vehicles and trucks in respect of the supply of hardware and building materials, including the supply of timber and timber products. [4] The loading and unloading yard had a sloping area where motor vehicles and trucks would park. Staff from the Defendant would on a daily basis use a forklift on the sloping part of the yard to load or unload these vehicles. [5] The Defendant did not have a traffic control plan in place in relation to controlling the amount of traffic entering the yard or which limited the movement of vehicles in the yard. [6] Neil Gregory Farquharson was an employee of B & B Transport Pty Ltd, which had a contract with the Defendant to deliver goods on its behalf. Mr Farquharson would attend the Green Hills premises in order to load building supplies for the purposes of delivering them. Mr Farquharson was the driver who was dedicated to the premises and had been working primarily at that location for 14 months. [7] At all material times, Ken Fraser was an employee of the Defendant who operated the forklift that was in use in the yard on that day. Mr Fraser was a certified forklift driver and had been so for the prior three years. [8] The forklift that was being driven by Mr Fraser at the time of the subject incident was a 1986 Toyota forklift, model no. 2FG30, with NSW registration QKS-400. The forklift weighed approximately 4680 kgs unloaded and had a load capacity of 2500 kg. [9] At about 8.30 am on 17 January 2002, Mr Farquharson drove his truck into the yard and parked it in front of the shed located on the flat section of the yard and from which the yard then commenced to slope upwards. [10] A short time later Mark Callinan, a customer of the defendant, drove his ute into the yard and parked it on the sloping section of the yard. Mr Callinan sought assistance from Mr Fraser and requested a quantity of plywood sheets. Mr Fraser then drove the forklift into a shed and loaded his forklift with 50 sheets of plywood, each sheet being 7 mm and 2.4 metres long and 1.2 metres wide. Mr Fraser then drove the loaded forklift to a position next to Mr Callinan's ute. [11] At this stage, the forklift was facing downhill. Mr Farquharson was standing about 2 metres down the slope and directly in front of the forklift, tying the load onto the tray of his truck. [12] When Mr Fraser parked the forklift, he left the tynes of the forklift about 500mm off the ground. When interviewed, Mr Fraser stated that he left the tynes off the ground to make it easier to transfer the sheets of plywood from the stack on the forklift onto the back of Mr Callinan's ute because he had been to a Back Care course and he was concerned to protect his back whilst manual handling the sheets of ply. [13] Also, when Mr Fraser left the forklift in gear, put the handbrake on and removed the key before he alighted from the vehicle. [14] After he alighted from the vehicle, Mr Fraser went around the front of the forklift and positioned himself beside the tray of Mr Callinan's ute. Mr Fraser and Mr Callinan then started sliding the sheets of ply from the stack on the tynes of the forklift onto the tray of Mr Callinan's utility. [15] Shortly after Mr Fraser and Mr Callinan had finished transferring 8 sheets of plywood from the stack on the tynes of the forklift onto the back of Mr Callinan's utility, Mr Fraser and some of the other witnesses heard a loud "clunk". Mr Fraser and the other witnesses saw the forklift start to roll down the hill towards Mr Farquharson. Mr Fraser shouted at Mr Farquharson to watch out. Mr Fraser also started to run after the forklift, but he was not quick enough to catch and mount the forklift before it struck Mr Farquharson. [16] Mr Farquharson turned around when Mr Fraser shouted at him and as he turned around the forklift struck him. Mr Farquharson was pinned between the load of the forklift and the side of the table tray on his truck. [17] Mr Fraser got back into the forklift, put the key into the igniton, and reversed the forklift. Mr Fraser also saw that the handbrake lever had returned to the fully released position. [18] Ambulance officers were called to the premises and Mr Farquharson was taken to hospital. However, the injuries sustained by Neil Gregory Farquharson were fatal and he died that evening. [19] The sloping part of the yard had a gradient ranging between 2.4 and 5.2 degrees and the gradient of the approximate position where the forklift commenced to roll down the slope was between 4.0 and 5.0 degrees. [20] At the time of the incident, the Defendant had a policy of not parking a forklift on a gradient, and this was embodied in an Occupational Health, Safety and Environment Manual that had been prepared on behalf of the Defendant. This policy was not adhered to at the premises in loading and unloading hardware and building supplies. [21] Following the incident, the system of work was changed by the Defendant, so that loading of vehicles was confined to the flat section of the yard. [22] The Defendant, BBC Hardware Limited (A.C.N. 000 003 378) has pleaded guilty to an offence under section 8(2) of the Occupational Health & Safety Act 2000 that, as an employer, persons not in its employment, in particular Neil Gregory Mr Farquharson, were not exposed to risks to their health and safety arising from the conduct of its undertaking whilst they were at its place of work. 7 As well, the prosecution tendered without objection two factual inspection reports prepared by Inspector Marshall dated 29 January and 15 February 2002 respectively. Those reports were written by Inspector Marshall following site visits to the defendant's Green Hills premises on 18 January and 8 February 2002 respectively, during which time he measured and inspected relevant aspects of the defendant's premises and inspected the forklift involved in the accident. Having said that, it should be said that with the exception of the facts contained in para [21] of the agreed facts, the prosecution does not rely on other matters referred to in those reports for the purposes of these sentencing proceedings. 8 There are also ten colour photographs taken by Inspector Marshall on 18 January 2002 depicting relevant aspects of the defendant's premises, the forklift in question as well as the truck driven by Mr Farquharson on 17 January 2002. 9 The defendant's prior conviction record is also before me. It has six identifiable prior convictions in relation to occupational health and safety over the period 1992 to 2000. With the exception of the matter before me, they are offences that have been dealt with before the Chief Industrial Magistrate. At first glance, those prior convictions raise concerns as to the defendant's commitment to workplace safety. I will have more to say about that in due course. For the moment, the prior convictions enliven s12 of the Act such that the maximum penalty for the offence now before me is $825,000. 10 There are other convictions recorded in that record that predominantly go to 'trading hours', breaches arising under the then Factories, Shops and Industries Act 1962. As well, the prior occupational health and safety prosecutions relate to the corporate history of the defendant, covering its diverse corporate entities as Nock & Kirby Limited from 1906 to 1984, to Burns Philp Hardware Limited between 1984 and 1994 and from June 1994 as BBC Hardware Limited as part of Howard Smith Limited. In September 2001, the defendant was acquired by Wesfarmers Retail Pty Limited trading as Bunnings Pty Limited. 11 On behalf of the defendant, I have an affidavit of Mr Willem Pruys sworn on 30 August 2004 with two volumes of annexures tendered without objection. Mr Pruys was not required for cross examination. Mr Pruys is a Director of Bunnings Pty Limited and General Manager of Human Resources for the Bunnings group of stores. 12 As well, tendered without objection on behalf of the defendant was an extract from the statement of Mr Ken Fraser. Mr Fraser was the driver of the forklift involved in the accident concerning Mr Farquharson. In the extract of that statement, Mr Fraser confirms, in relation to instructions given to him in his training as a forklift operator, he was instructed, when parking the forklift, to lower the tynes to the ground fully tilted forward. That issue becomes relevant as it goes to the circumstances in which the accident occurred. That is, at the time the forklift rolled down the slope, the forks or tynes were not on the ground but were raised some 500mms above the ground, carrying the load of plywood that was being lifted into the utility. 13 The corporate role of Bunnings Pty Limited in relation to the defendant is set out in relevant detail in Mr Pruys' affidavit as follows: [3] BBC Hardware Limited ('BBC Hardware') is a public company wholly owned by Wesfarmers, with its registered office at Wesfarmers House, Level 11, 40 The Esplanade, Perth, Western Australia. BBC Hardware is one of the major distributors of hardware and building products, including timber in Australia. [4] BBC Hardware has had several name changes since its inception, including: · Benjamin's Building Company in 1885. · Nock & Kirby Limited between 27 November 1906 to 26 January 1984. · Burns Philp Hardware Limited between 27 January 1984 to 28 June 1994. · From 29 June 1994 the company traded as BBC Hardware Limited. [5] In about September 2001, Wesfarmers Retail Pty Ltd ('Wesfarmers Retail') a subsidiary of Wesfarmers acquired Howard Smith Limited and its subsidiaries, including BBC Hardware. [6] BBC Hardware remains registered and continues trading as a separate corporate entity. [7] However, since its acquisition by Wesfarmers Retail, BBC Hardware has been notionally incorporated into the Wesfarmers Retail national hardware and building supplies business. This business is operated under the trading name 'Bunnings'. As a consequence, the former BBC Hardware stores have been re-branded under the Bunnings name. [8] The statistics and figures contained set out below relate to the 're-branded' Bunnings business operating as a whole. [9] As at August 2004, Bunnings operates 116 warehouse stores and 95 smaller traditional stores in Australia and New Zealand. Bunnings also operates 18 Western Australia salvage discount variety stores in Western Australia. [10] Bunnings currently employs approximately 22,000 people in Australia and New Zealand. In New South Wales there are 5,283 employees. 14 Mr Pruys' affidavit also detailed the situation that existed in relation to workplace safety at the time of the acquisition of BBC Hardware by Westfield Retail Pty Limited in September 2001. On that issue, Mr Pruys stated: [17] The acquisition of BBC Hardware by Wesfarmers Retail was 'unfriendly'. [18] As a consequence, Wesfarmers Retail did not have an opportunity to conduct 'due diligence' prior to the takeover. [19] For about 12 months after the acquisition, the BBC Hardware sites continued to trade under that name. However, from about August 2002 all the former BBC Hardware sites began trading under the name 'Bunnings'. [20] The first few months following the acquisition of the business in about September 2001, the incoming management focussed on learning about the BBC Hardware business and its personnel. This was, in effect, the due diligence period that would have been undertaken had the acquisition been 'friendly'. [21] The BBC Hardware business was larger than Bunnings. Prior to the takeover, BBC Hardware employed approximately 10,000 staff and operated at some 250 locations throughout Australia and New Zealand. [22] As a consequence, at the time of acquisition, the hardware and building supplies business grew from 8000 to 18,000 personnel. [23] Part of the integration process involved incoming management meeting with all employees in the BBC Hardware support office for the purpose of reviewing their roles and to discover a 'real picture' of the business in operation. This included extensive discussions with all Senior Management, as well as other human resource personnel and operations managers, including Mr Scott Cornwell, who held the position of BBC Hardware's Health and Safety Manager prior to the takeover. [24] In particular, incoming management sought to ascertain whether there were occupational health and safety policies and procedures in place within BBC Hardware and the degree to which they were implemented. Throughout this process we were advised that BBC Hardware had in place both occupational health and safety policies and procedures. Incoming management were also told that BBC Hardware, as an organisation, had a high level of compliance with respect to the implementation of its health and safety procedures. (Annexuere B). [25] During this process, incoming management were also shown documented memoranda that indicated a high level of compliance, as well as a strategic approach to ongoing risk management. (Annexure C). [26] However, as a consequence of the size of the business acquired and the number of individual sites, it was not possible for incoming management to visit and assess every BBC Hardware location prior to 17 January 2002, the date of the subject incident. Therefore, as part of the initial review process, the managers of all BBC Hardware sites were instructed to review their sites and make recommendations for improvement to health and safety in their worksites. [27] As the review process progressed, it became evident to incoming management that the previous owners of the business had not spent sufficient funds on the proper implementation of health and safety to create safe working environments. Incoming management resolved upon a two stage approach to its findings: (a) First, as a short term response, incoming management decided to induct BBC Hardware into the Bunnings' health and safety system; and (b) Secondly, to undertake a total review of the group's approach to health and safety. 15 The tragic circumstances of Mr Farquharson's accident was, on any view, entirely foreseeable and easily avoidable. It would not be overstating the situation to say that commonsense, let alone sound occupational health and safety policy, would be all that was required to conclude that a 4680 kilogram forklift with a heavy load, parked on a slope pointing downhill, with the tynes off the ground, in gear and with only a handbrake to hold it, was a very real risk of doing exactly what it did on 17 January 2002. That is, roll downhill and into whatever was in its path. The defendant knew that. It had a policy specifically prohibiting the parking of forklifts on a gradient and, as I have earlier referred to, it had instructed its employees that when parking a forklift, to lower the tynes to the ground fully tilted forward. 16 That factual background renders this offence an objectively serious one. I say that having regard to the decision of the Full Bench in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464. That decision establishes the well settled principle going to the objective seriousness of an offence for the purposes of the Act. At para [476] the Court said: It will be a serious offence when 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. 17 It is also relevant to the objective seriousness of an offence to consider if there were readily and easily available remediation steps which could have been undertaken by the defendant before the accident to prevent the injury occurring. To put it another way, one should have regard to remediation or the extent of remediation that is done post the accident, as an indication of the extent to which foreseeability of injury was readily identifiable. 18 The circumstances relating to the accident leading to Mr Farquharson's death did not require more than an adherence to the defendant's already existing policy which was not to park forklifts on a gradient. It was a simple enough policy and one perfectly capable of being adhered to. 19 Following the accident, apart from reinforcing the existing policy, the defendant's system of work was altered so that the loading of vehicles was confined to the flat section of the yard. This was also a policy perfectly capable of being implemented prior to the accident. 20 As well, as Mr Pruys deposed, the integration of the defendant into the occupational health and safety policies and strategies of Bunnings as part of the Wesfarmers Group of companies, saw the adoption of a Traffic Management Plan in the operation of worksites such as that at Green Hills. As Mr Pruys stated: Traffic Management constitutes a large part of the BSAFE Occupational Health and Safety Manual. The traffic management plan incorporates designated unloading bays, forklift exclusions zones, signage and pedestrian line marking. It has been designed for each store to manage the movement of trucks, forklifts and pedestrians in our yard and drive through areas. 21 In passing, it should be noted that the premises at Green Hills where the accident happened involving Mr Farquharson no longer operates as part of the defendant's business. 22 In addition to the above, Mr Pruys details the steps taken by Wesfarmers and Bunnings management from the time of the acquisition of the defendant in September 2001, to introduce a comprehensive occupational health and safety policy and culture into the defendant's business and workplace operations. 23 Overall, Mr Pruys' affidavit is an impressive account backed up by the documentary information annexed. I am satisfied the defendant is now part of a corporation that has taken its occupational health and safety obligations to heart with a genuine commitment to its policies by taking practical and innovative steps designed to ensure their implementation at the workplace. 24 In relation to occupational health and safety at the workplace, there are occasions when employers produce significant amounts of documentary material pointing to extensive occupational health and safety policy and procedure manuals as evidence of their commitment to that issue at the workplace. As experience has shown, the development of sound occupational health and safety policies is but one step in the process of ensuring a workplace free of risks to safety. The important step after the development of such policies and procedures is to ensure that they are adhered to in the workplace by appropriate attention to instruction, training and supervision as well, on a proactive basis, of ongoing reinforcement as to the importance of adhering to safe work practices. The evidence before me, as contained in Mr Pruys' affidavit and annexures, gives every indication of an employer who understands the importance in occupational health and safety of translating policies into safe workplace practices for its employees. It is to be hoped that will continue. 25 The evidence of Mr Pruys certainly points to a new safety dynamic in the defendant's workplaces. It is clear that Bunnings and Wesfarmers have made a commitment to incorporate into the defendant's worksites a workplace culture with emphasis on induction, training and ongoing supervision as well as reappraisal of those polices on an ongoing basis. It is to be hoped that that culture will ensure that, in its new corporate entity, the defendant will not continue with its tendency, as its prior convictions would suggest, to lapse into offending behaviour. 26 On that issue, regard must be had to general and specific deterrence. That much is evident from the decisions given by the Full Bench of this Court in Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 99 IR 29 particular at paras [74] and [77]. In para [74] the Full Court says in relation to general and specific deterrence, that: We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Limited accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process. 27 There is no dispute that I must have regard to both general and specific deterrence in the matter before me. 28 While the defendant has undergone a corporate metamorphosis into Bunnings and a new corporate culture, it nevertheless continues to operate in the business of hardware and building supplies on a large scale with a significant number of retail outlets in New South Wales and across Australia. Adherence to occupational health and safety is an ongoing obligation. I consider specific deterrence is a relevant factor to be taken into account in the sentence determination before me but I also take into account the new and positive corporate culture that is now in place. The test for the defendant will be to maintain that. 29 The plea has been entered at the earliest opportunity and the prosecution acknowledges that the defendant is entitled to a discount on that basis in accordance with the principles laid out in R v Thompson, R v Houlton (2000) 49 NSWLR 383. I assess that discount at twenty five percent. 30 I have before me a Victim's Impact Statement prepared on behalf of Mr Farquharson's family by his father, Mr Stanley Farquharson. That statement is properly received by me in accordance with s28(3) of the Crimes (Sentencing Procedure) Act 1999. Mr Farquharson's statement is made on his own behalf as well as his wife and Mr Farquharson's siblings. 31 While brief, the statement highlights the factors that have undoubtedly overwhelmed the Farquharson family following the tragic and avoidable circumstances of their son's death. No parent ever expects to bury a child. When that happens the loss is immense. As Mr Farquharson stated: A void has been created that cannot be filled. 32 No words of this Court can ease the suffering that the Farquharson family have undoubtedly had to deal with. If nothing else, their Statement brings a human dimension to workplace accidents that are all too often only considered from the perspective of technical workplace-centred considerations going to safety factors that were or were not present at the time of the accident. 33 In receiving the Statement as I do, I consider that it highlights features that go to the objective seriousness of the offence about which I have already commented and considered. 34 There are subjective factors which I may properly take into account. The defendant has fully cooperated with WorkCover in its investigations into this matter and I am satisfied have done all that they could have done to assist in the investigations into it. I believe that the defendant is genuinely regretful as to the circumstances of this accident and there is no doubt, on the evidence before me, both in relation to occupational health and safety and more widely, they have a reputation as good corporate citizens. I say that particularly with regard to the new company that I have to consider in the context of this defendant's offences, that being Bunnings Limited. 35 Taking all those features into account, I determine a further discount on penalty of ten per cent. Taking into account all the matters that I have referred to, I determine a notional penalty in this matter of $240,000. In applying the discounts I have determined, I determine a final penalty of $156,000. Accordingly I make the following orders: · The defendant is convicted of the offence as charged. · I impose a penalty in this matter of $156,000. · I allocate a moiety to the prosecution on the usual terms. · Costs to the prosecutor as agreed or assessed in accordance with the Rules of the Court. 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.