Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Gregory Maddaford v Graham Gerard Coleman & Anor [2004] NSWIRComm 317 APPELLANT/CROSS-RESPONDENT: Inspector Gregory Maddaford PARTIES : FIRST RESPONDENT/CROSS-APPELLANT: Graham Gerard Coleman SECOND RESPONDENT/CROSS-APPELLANT: Brian Gerard Coleman FILE NUMBER: IRC 3054 of 2004 CORAM: Walton J Vice-President; Kavanagh J; Haylen J CATCHWORDS : Appeal from decision of Chief Industrial Magistrate - leave to appeal - guilty plea - bullying - workplace pranks - culture of initiation in the workplace - failure to supervise - prior knowledge of risk - failure to take steps to detect and prevent risk - errors of fact - failure to investigate incident of bullying - failure to properly consider objective seriousness of offence - insufficient weight given to consideration of general and specific deterrence - obvious and foreseeable risk - simple measures to prevent risk not taken - employment of young people - responsibility to protect vulnerable employees - excessive weight given to subjective factors - lack of contrition - select prosecution of directors - sentence - appeal from discretionary decision - sentence manifestly inadequate - exercise of discretion under s10 of Crimes (Sentencing Procedure) Act - double jeopardy - parity - no evidence of impecuniosity - leave to appeal granted - appeal upheld - respondents re-sentenced - costs awarded Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED : Industrial Relations Act 1996 Occupational Health and Safety Act 2000 Axer Pty Ltd v Environmental Protection Authority (unreported, Court of Criminal Appeal, Matter No. 60763 of 1992, 22 November 1993) Barber v Gundagai Shire Council (or alternatively Gundagai Council) [2002] NSWIRComm 243 Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of New South Wales (Inspector Wilson) (2000) 99 IR 159 Coulton v Holcombe (1986) 162 CLR 1 Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Limited (2001) 105 IR 348 Department of Mineral Resources (McKensey) v Kembla Coal and Coke Pty Limited (1999) 92 IR 8 Dinsdale v The Queen (2000) 202 CLR 321 Griffiths v The Queen (1997) 194 CLR 293 Haynes & Anor v CI&D Manufacturing Pty Limited (No 2) (1995) 60 IR 455 Independent Cargo & Wool Services Pty Limited v Inspector Mingare (unreported, Fisher CJ, Glynn and Peterson JJ, 10 March 1994) Inspector Barbosa v McDonalds Australia Limited [2003] NSWIRComm 196 Inspector Brian Dell v Jeffrey Fitzpatrick (2003) 121 IR 173 CASES CITED : Inspector Christopher Downie v Menzies Property Services Pty Limited [2004] NSWIRComm 259 Inspector Hanah v Wonar Pty Ltd (unreported, Fisher CJ, CT90/1214, 30 June 1992) Inspector Ian Batty v Graincorp Operations Limited [2002] NSWIRComm 49 Inspector Ian Lancaster v Burnshaw Constructions Pty Ltd [2002] NSWIRComm 319 Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Lowe v The Queen (1984) 154 CLR 606 McCarthy v Sell & Parker Pty Ltd [2000] NSWIRComm 273 Metwally v University of Wollongong (1985) 60 ALR 68 P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102 Postiglione v The Queen (1997) 189 CLR 295 Ridge Consolidated Pty Limited v WorkCover Authority of New South Wales (Inspector Mauger) (2002) 115 IR 78 Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 Signato v The Queen (1998) 194 CLR 656 Van Rooy Machinery Pty Ltd v WorkCover Authority (Insp Wolf) (2000) 97 IR 436 HEARING DATES: 10/21/2004 DATE OF JUDGMENT: 11/03/2004 APPELLANT/CROSS RESPONDENT: Mr P Hall, QC Mr D Chin of counsel SOLICITOR: Ms J Healy Phillips Fox LEGAL REPRESENTATIVES: RESPONDENTS/CROSS-APPELLANTS Mr J Pearce of counsel SOLICITOR: Mr B Edwards Nevill & Edwards JUDGMENT: - 54 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: WALTON J, Vice-President KAVANAGH J, HAYLEN J 3 November 2004 Matter No IRC 3054 of 2004 INSPECTOR GREGORY MADDAFORD v GRAHAM GERARD COLEMAN Application for leave to appeal and appeal against a decision of Chief Industrial Magistrate G A Miller given on 5 May 2004 in Matter No 20085304/03/2. Matter No IRC 3055 of 2004 INSPECTOR GREGORY MADDAFORD v BRIAN GERARD JOHN COLEMAN Application for leave to appeal and appeal against a decision of Chief Industrial Magistrate G A Miller given on 5 May 2004 in Matter No 20085291/03/2. Matter No IRC 3310 of 2004 GRAHAM GERARD COLEMAN v INSPECTOR GREGORY MADDAFORD Application for leave to appeal and appeal against a decision of Chief Industrial Magistrate G A Miller given on 5 May 2004 in Matter No 20085304/03/2. Matter No IRC 3313 of 2004 BRIAN GERARD JOHN COLEMAN v INSPECTOR GREGORY MADDAFORD Application for leave to appeal and appeal against a decision of Chief Industrial Magistrate G A Miller given on 5 May 2004 in Matter No 20085291/03/2. JUDGMENT OF THE COURT [2004] NSWIRComm 317 1 This matter concerns applications by Gregory Maddaford, as an inspector of the WorkCover Authority of New South Wales ("WorkCover") for leave to appeal pursuant to s197 of the Industrial Relations Act 1996, and if granted, appeal from a decision of Chief Industrial Magistrate Miller of 5 May 2004. Mr Brian Coleman and Mr Graham Coleman, the defendants at first instance and the respondents to WorkCover's appeals , also seek leave to appeal, and if granted appeal from the Chief Industrial Magistrate's decision. 2 The decision appealed from was a sentencing decision in which the respondents were each fined $1,000 in respect of breaches of s26 of the Occupational Health and Safety Act 2000 ("the Act"). The breaches related to an incident at a factory operated by M.A. Coleman Joinery (NSW) Pty Limited ("the Company") when Mr Dwayne Doyle, a 16 year old employee of the Company, was physically restrained by a group of other employees and subjected to a violent ordeal which can be described at best as an out-of-control workplace prank, and at worst as an assault. The respondents are, and were at the time of the incident, directors of the Company. background 3 The following is a summary of the factual background to these matters as set out in the Agreed Statement of Facts which was tendered, by consent, at first instance: (1) The Company was engaged in the timber joinery and shop fitting industry. In December 2001, Mr Brian Coleman was the Managing Director of the Company and Mr Graham Coleman was the Factory Foreman. (2) The Company conducted business at a factory in Lidcome. The factory consisted of three levels. The ground floor incorporated two offices, storage and loading areas, and two areas containing woodworking machines. On the middle level, there were workbenches and woodworking machines. The top level consisted of a polish shop and two areas containing woodworking machines, workbenches, mobile work trolleys and pallets of material and finished product. Access to all levels was via staircases. The middle and top levels are mezzanine levels, in that there is a penetration in the floor leading to the ground floor of the factory, providing fork lift access to the middle and upper levels. The penetration was fenced on three sides by fixed tubular steel guard rails, and there were removable gates on the remaining side. (3) Mr Doyle was employed by the Company to work in the factory as a labourer. Mr Doyle was 16 years old at the time of the incident. (4) On 21 December 2001, Mr Doyle was working at the factory. Also present were Mr Robert Ciacchi (storeman); Mr Alan Calistro (a contractor); Mr Michael Fraser (contractor engaged as site foreman); Mr Stephen Last; Mr Bruno Pomente; Mr Mark Ashby; Mr Branislav Prastalo; Mr Jason Gobbo; and Mr Emmanuel Manolis. The Company and its employees were preparing for a work Christmas party which was to commence at noon that day. (5) At about 10 or 11am, Mr Doyle was called to attend the top level of the factory, purportedly to assist in moving cabinets. When he arrived, he was grabbed by Messrs Pomente, Manolis, Prastalo, Gobbo and Ashby, who wrapped him from his neck to his feet in plastic wrap using a manual plastic wrapping machine. He was placed on his back on a mobile work trolley, and secured to the trolley with more plastic wrap. (6) Mr Doyle asked to be freed. Mr Gobbo placed a Stanley knife at the end of a table near Mr Doyle and said words to the effect of "if you can reach it you can cut yourself free". The trolley was pushed from side to side and spun around. (7) Mr Doyle's shoes and "bum-bag" were removed and filled with sawdust. Sawdust was thrown over Mr Doyle, and shoved down his trousers and shirt. Mr Pomente squirted wood glue into Mr Doyle's shoes, over his body and in his mouth. (8) Mr Pomente then shoved a handful of sawdust into Mr Doyle's mouth. Mr Doyle, an asthmatic, coughed and choked and was unable to breathe. Either Mr Gobbo or Mr Ashby then used a fire hose to wash the sawdust and glue out of Mr Doyle's mouth. As one of the group of men squirted glue into Mr Doyle's mouth, another squirted a fire hose into his mouth. Mr Doyle spat the mixture out of his mouth as more was pumped in. (9) The entire incident lasted approximately half an hour. Mr Fraser cut Mr Doyle free from the plastic wrap and the trolley. Mr Pomente told Mr Fraser not to do so. (10) Mr Doyle was given his Ventolin inhaler by his mother, Carmen Doyle, who was also an employee of the Company. 4 Mr Doyle claimed to have suffered respiratory and psychiatric problems as a result of the incident. Medical evidence tendered on behalf of the respondents concluded that "Mr Doyle does not suffer from a formal psychiatric disorder or stress related illness which can be reasonably or logically attributed to his employment with [the Company]. There has been no permanent psychiatric injury due to unreasonable working conditions". 5 Brian Coleman was on the premises at the time of the incident, but asserted that he did not know of or witness the incident. His evidence indicated that he spent time in the office (on the ground floor) and checking on a job (on the middle level). There was no evidence regarding Graham Coleman's whereabouts at the time of the incident. 6 Brian Coleman was later informed about the incident by Mr Paul Jackson, one of the factory labourers, who told him that an "initiation" had taken place. Brian Coleman became aware the details of the incident at about 3pm when he spoke to Mr Doyle's mother, Carmen Doyle, at the Christmas party. The Company did not immediately investigate the incident. Brian Coleman did not consider the Christmas party to be an appropriate time to address the matter. 7 The evidence indicated that Mr Doyle attended the Christmas party on the afternoon of 21 December 2001. He returned to work after the Christmas break on 11 January 2002. He ceased work on 17 January 2002, apparently without notice to the Company. On 22 January 2002, the Company notified Mr Doyle by letter that, by his absence, he had effectively abandoned his employment. His employment with the Company therefore ceased as of his last working day, being 16 January 2002. 8 Brian Coleman returned to work at the factory on 16 January 2002. WorkCover visited the factory on 12 February 2002, at which point the Company initiated its investigation. The investigation was conducted by Colleen Cooper, the respondents' sister, however the Company was unable to determine who was responsible for the incident. All employees were subsequently reprimanded at a group meeting and told that threatening and harassing behaviour would not be tolerated. No other disciplinary action was taken by the Company in relation to the incident. 9 The Company was charged under s8(1) of the Act for failing to ensure the health, safety and welfare at work of its employees, in particular, Mr Doyle. Brian and Graham Coleman, being directors of the Company, were charged under s26(1) of the Act for the Company's breach. The particulars of the breach were that the Company (and therefore Brian and Graham Coleman): (1) failed to adequately supervise its employees to ensure they took reasonable care for the health and safety of people at the premises; (2) failed to adequately train its employees to ensure they took reasonable care for the health and safety of people at the premises; (3) failed to prevent an act of premeditated violence by employees to Dwayne Doyle at the premises; and (4) failed to implement adequate policies or procedures governing violence in the workplace. 10 The Company entered a guilty plea, was convicted and fined an amount of $24,000. WorkCover submitted that "his Honour correctly assessed the nature and quality of the offence as identified in relation to the company as being 'in the serious range of matters coming before this Court'. Allowing for a discount of 20% for subjective mitigating factors, his Honour properly imposed a substantial fine upon the company." The Company did not challenge the imposition of that fine. 11 Brian and Graham Coleman initially sought to defend the charges. On the first day of hearing before the Chief Industrial Magistrate, applications were made on behalf of Brian and Graham Coleman to dismiss or permanently stay the prosecutions on the ground that other directors of the Company had not been prosecuted. Those applications were denied, at which point both Brian and Graham Coleman entered guilty pleas. 12 We note that charges were also laid under s20(1) of the Act against a number of Company employees who were involved in the incident. Those charges have been dealt with as follows: (1) On 8 July 2003, Mr Pomente was convicted and fined $500, and ordered to pay costs of $1,400; (2) On 14 August 2003, Mr Prastalo was convicted and received a 12 month good behaviour bond under s9 of the Crimes (Sentencing Procedure) Act 1999 and ordered to pay costs; (3) On 25 August 2003, Mr Ashby was convicted and received a 12 month good behaviour bond under s9 of the Crimes (Sentencing Procedure) Act 1999 and ordered to pay costs; (4) on 18 September 2003, Mr Manolis was convicted and received a 12 month good behaviour bond under s9 of the Crimes (Sentencing Procedure) Act 1999 and ordered to pay costs; (5) on 17 March 2004, Mr Gobbo was convicted and received a 12 month good behaviour bond under s9 of the Crimes (Sentencing Procedure) Act 1999; and (6) on 18 March 2004, Mr Last was found guilty of the offence charged and ordered to pay costs. The charge was dismissed on condition that he enter into a 12 month good behaviour bond under s10 of the Crimes (Sentencing Procedure) Act 1999. the decision appealed from 13 The Chief Industrial Magistrate made the following comments regarding the culture at the Company's workplace (at 4): The impression I gained was that a culture of initiation existed within the factory and the fact the incident lasted approximately half an hour during working hours without management intervention enforces that impression. 14 In relation to the seriousness of the breach, Chief Industrial Magistrate Miller discussed the conflicting medical evidence regarding the injuries sustained by Mr Doyle as a result of the incident before making the following findings (at 4-5): This dispute between the doctors does not diminish the seriousness of the breach. There was present a potential risk of serious injury to Dwayne Doyle from the events on this day such as suffocation. What occurred was a sustained assault for approximately half an hour upon Doyle from his fellow employees. What started out as a simple episode of bullying got out of control leading to a serious physical threat to Doyle's health and safety. As conceded by the defendants, viewed objectively this is a serious matter. A purpose of the Occupational Health and Safety Act is to eliminate risks to health and safety at the workplace. What occurred on this day is often described as an initiation. It is a polite term for bullying. A bullying culture has been known to exist in some workplaces, often seen as a bit of fun at the expense of someone else. It is a culture that needs to be stamped out. Bullying has no place in the workplace. 15 In sentencing the Company, his Honour made the following findings (at 5-6): [The Company] commenced in 1949 performing general joinery house extension work and subsequently moving into the area of club extension, commercial and general building and officer fit outs. It employs approximately 40 employees depending on demand. Despite working in the building industry, a hazardous industry, it has no previous convictions in this jurisdiction. This is an excellent record given the duration, size and nature of its undertaking. The Company had in place at the time of the incident occupational health and safety policies and programs concentrating on physical injuries. After the incident, further procedures have been developed in consultation with all factory employees especially in relation to an anti-violence/bullying/harassment, and sexual harassment policy. An occupational health and safety specialist is now employed and the company has been so successful in implementing safety policies that an audit is to be undertaken for accreditation under the WorkCover premium discount scheme. Safety policies are continually reinforced at regular factory meetings, the minutes of which are attached to employee's payslips. and later (at 6): In regard to the [Company], the maximum penalty prescribed for a breach of s8(1) is a fine of up to $550,000 for a first offender. This Court has a jurisdictional limit of $55,000. For each of the individual directors the maximum penalty provided is $55,000. The nature and quality of the breach of this section by [the Company] falls in the serious range of matters coming before this Court. There was a late plea of guilty. Subjective matters mitigate heavily in the [Company's] favour. The need for specific deterrence is negligible. In regard to general deterrence the Court must indicate to others in industry that this type of incident will not be countenanced. The community's expectation in regard to breaches of this legislation must be met. Allowing a discount of 20%, a conviction and fine of $24,000 is imposed. 16 The Chief Industrial Magistrate made the following findings in relation to Brian and Graham Coleman (at 6-7): Brian and Graham Coleman are aged 45 and 43 respectively. They are actively involved in the Company's management with Graham being responsible for the factory floor and its production. Both defendants have dependents and are actively engaged in their local community, church and charitable works. They have provided through their Company, employment opportunities to vulnerable youth, which unfortunately is likely to be affected as a result of this experience, this incident having cost the company losses in the order of $200,000. This has impacted severely on the company due to the modest profits earned by the Company in 2002 and losses sustained in 2003. Testimonials presented to the Court speak highly of the directors and their character. Both directors (as well as their brothers who are not involved in these proceedings but are directors of the corporation) accept the responsibilities of the actions of their Company. They recognise whilst they cannot undo the past they have ensured that a similar offence will not take place in the future. ... In regard to the individual directors I note particularly it is a family company and the fines to be paid by [the Company] will impact directly upon the directors and their families. Furthermore the other directors have not been charged, although on evidence it does appear that the two directors charged were more concerned in the day to day running of the factory than their brothers at the time of the incident. 17 As to the application made on behalf of Brian and Graham Coleman that the Chief Industrial Magistrate should exercise his discretion under s10 of the Crimes (Sentencing Procedure) Act, his Honour held (at 7): Although subjective factors mitigate highly in the two directors' favour and they have no prior record, I do not believe I can in all the circumstances exercise my discretion under s10 of the [ Crimes (Sentencing Procedure) Act ] in their favour. The directors are the directing mind of a corporation that has seriously failed to ensure the health and safety of an employee who on the defendants' evidence was a vulnerable person. On the evidence, Brian Coleman was told of an initiation ceremony that may take place that day but apparently did nothing to prevent it. Graham Coleman was in charge of supervision on the factory floor where the incident occurred involving employees whom he supervised. However, his level of supervision did not deter these employees from carrying out their "ceremony" on this day. 18 Brian and Graham Coleman were each convicted and fined $1,000. 19 WorkCover appealed the decision to impose penalties of $1,000 on each of Brian and Graham Coleman on the following five grounds: (1) That the exercise of his Honour's discretion in sentencing both Mr Graham Coleman and Mr Brian Coleman miscarried owing to an error of fact that his Honour incorrectly found, contrary to the evidence of Mr Ciacchi, that Brian Coleman, rather than Graham Coleman, had prior knowledge of an initiation ceremony that would take place on the day of the offence but did nothing to prevent it; (2) His Honour erred in giving undue and unreasonable weight to the circumstances of each of the respondents as a director/owner of a co-defendant company; (3) His Honour erred in failing to take account relevant matters, including: (a) the requirement for both specific and general deterrence for the offence; and (b) the maximum penalty for the offence being $55,000. (4) In any case, his Honour erred in imposing a penalty on each of the respondents that was manifestly inadequate in the circumstances. (5) Any other grounds as the Court considers appropriate. 20 Brian Coleman appealed on the grounds that the Chief Industrial Magistrate erred in the following ways: (1) finding that a culture of such behaviour (bullying) existed within the Company; (2) finding that Brian Coleman had prior knowledge that an incident would take place on the day of the offence but did nothing to prevent it; and (3) failing to exercise his discretion under s10 of the Crimes (Sentencing Procedure) Act 1999. 21 Graham Coleman appealed on the grounds that the Chief Industrial Magistrate erred in the following ways: (1) finding that a culture of such behaviour (bullying) existed within the Company; (2) finding that Graham Coleman was supervising the factory floor at the time of the incident; and (3) failing to exercise his discretion under s10 of the Crimes (Sentencing Procedure) Act 1999. 22 The issues which arise for determination on appeal are principally two-fold. Firstly, whether the Chief Industrial Magistrate erred in finding that Brian Coleman (rather than Graham Coleman) had prior knowledge of the incident, and if such an error was made, whether it materially affected the penalties imposed by the Chief Industrial Magistrate. Whilst the parties agreed that his Honour fell into error in making that finding, their contentions regarding the implications of that error were significantly divergent. According to WorkCover, the error resulted in the Chief Industrial Magistrate failing to take account of a relevant difference in culpability, which should in turn have resulted in a higher penalty being imposed on Graham Coleman. According to Brian and Graham Coleman, the error resulted in the Chief Industrial Magistrate failing to take account of a relevant factor which justified the exercise of his discretion under s10 of the Crimes (Sentencing Procedures) Act. 23 Secondly, upon the findings of facts that were properly available on the evidence whether the penalties imposed by the Chief Industrial Magistrate were, as WorkCover contended, manifestly inadequate. leave to appeal 24 WorkCover submitted that leave to appeal should be granted for four reasons: (1) the inadequacy of the sentences imposed by the Chief Industrial Magistrate raises important issues of principle concerning the determination of relative culpability between corporate and personal defendants; (2) the Chief Industrial Magistrate failed to assess culpability in a manner consistent with the principles established in decisions such as WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (2000) 99 IR 163 and Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Limited (2001) 105 IR 348; (3) even if no significant issue of principle is raised, the level of penalty imposed is a significant factor in determining whether leave to appeal should be granted: Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of New South Wales (Inspector Wilson) (2000) 99 IR 159 at [12]; and (4) leave to appeal is warranted in the present matter as it concerns the first convictions under the Act involving failures to prevent violence and bullying at the workplace. 25 WorkCover further submitted that the respondents should be refused leave to appeal, as the decision at first instance discloses no error by the Chief Industrial Magistrate in his exercise of discretion under s10 of the Crimes (Sentencing Procedure) Act. WorkCover submitted that his Honour's refusal to exercise that discretion was consistent with the well settled principle that there are limited circumstances in which that discretion may be exercised. In that regard, WorkCover cited WorkCover Authority v Waugh (1995) 59 IR 89 at 101; Van Rooy Machinery Pty Ltd v WorkCover Authority (Insp Wolf) (2000) 97 IR 436; WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 100 IR 64 at 66-69; McCarthy v Sell & Parker Pty Ltd [2000] NSWIRComm 273 at [9]; Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 at [13]; Barber v Gundagai Shire Council (or alternatively Gundagai Council) [2002] NSWIRComm 243 at [19]; Berrima Coal at [169]-[177]; and Inspector Christopher Downie v Menzies Property Services Pty Limited [2004] NSWIRComm 259 at [47]. 26 The cross-appeals each identified the following reasons why leave to appeal should be granted: (1) the respondents' knowledge and involvement in the incident involving Mr Doyle have been misrepresented in the decision at first instance, affecting their business and reputation; (2) the appeal raises important issues in relation to the sentencing of directors; (3) the appeal raises important issues as to the proper application of s10 of the Crimes (Sentencing Procedure) Act 1999; (4) the appeal raises important issues as to whether it is in the public interest to pursue prosecution of directors when the company has been prosecuted and there is no evidence to suggest any likely default of any penalty imposed; and (5) the appeal raises important issues as to whether selected prosecution of directors should be allowed as opposed to all directors. 27 In relation to leave to appeal, the respondents submitted that the decision at first instance was based on an incorrect application of the evidence, and on that basis, leave should be granted in the cross-appeals. Further, if leave is granted in WorkCover's appeals, it should be limited to the correction of that misapplication of the evidence. In that regard, the principle in Coulton v Holcombe (1986) 162 CLR 1 should be "rigorously applied". The respondents further contended that the submissions made by WorkCover on appeal include matters which were not raised at first instance (such as submissions in relation to deterrence). 28 WorkCover submitted that the respondents have misapplied the principle in Coulton v Holcombe. The principle expressed by the High Court in that case, according to WorkCover, is that an appellate court will not ordinarily allow a party to agitate, for the first time, an entirely new issue that was not raised in the court below, and about which decisive evidence could have been adduced (see also Metwally v University of Wollongong (1985) 60 ALR 68 at 71). WorkCover submitted that that principle does not preclude a party seeking merely to elaborate upon a matter, as in the present case, that was plainly at issue before the court below. 29 We propose granting leave to appeal to both parties (although, as we will discuss later in our judgment, we consider that the cross-appeals lack merit). Accordingly, it is not necessary that we resolve any argument regarding the principle in Coulton v Holcombe, save to say that we consider that WorkCover has not advanced on appeal any matter that was not raised at first instance. 30 In accordance with established principle, we do not lightly or automatically grant leave: Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381-382). However, issues of violence and bullying in the workplace require sober and serious consideration. It is imperative, in our view, that the jurisprudence of this Court is unambiguous in its condemnation of such conduct. We are satisfied that the matters before us raise important issues of law and principle, particularly in relation to the correct approach to sentencing under the Act; they involve substantial issues as to the administration of justice; they have wider implications for the jurisprudence of the Commission. Further, it must be made abundantly clear that safeguarding health and safety in the workplace extends to protecting employees from bullying and violence from other employees. As this is the first occasion such a matter has come before this Court, and having regard to the seriousness of the breaches, we consider there is a significant public interest in leave being granted. Despite our views on the merits of the cross-appeals, we do not consider it sensible to disconnect from this discussion the issues raised by the respondents which go to the objective seriousness of the offence and the application of s10 of the Crimes (Sentencing Procedures) Act. 31 We do not consider that it necessary to engage in a lengthy discussion regarding the relevant principles to be applied in prosecutions under s26 of the Act. However, Mr P Hall, QC¸ who appeared for WorkCover with Mr D Chin of counsel, advanced three propositions which warrant mention as to why leave to appeal is necessary to clarify the operation of s26 of the Act. Firstly, it was submitted that the liability imposed on directors and managers by s26 of the Act is necessary to achieve the objects of the Act, being, amongst other things, to secure and promote the health, safety and welfare of people at work. By making directors and managers personally liable for contraventions of the Act, the legislature has sought to prevent management from hiding behind a corporate veil. Secondly, the assessment of the culpability of directors and managers (viz a viz each other and the company) requires clarification. It was WorkCover's contention that the culpability of the Company is a touchstone for determining the individual culpability of directors and managers, and that regard must therefore be had to the penalty actually imposed on the Company in sentencing the respondents. Thirdly, given that there was no appeal from the penalty imposed on the Company, we must have regard to the actual penalty imposed on the Company, even if we consider it is wrong. We agree that each of those propositions raise issues which warrant the granting of leave to appeal in the present matter. However, it is sufficient for the purposes of the appeal to note that each such contention has merit and we intend to generally adopt them for the appeal. principles on appeal 32 WorkCover submitted that the principles governing an appellate court's approach on an appeal against a sentence imposed in criminal proceedings are those set out in Profab Industries at 66-69 and WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Limited (2003) 127 IR 60 at [50]-[53]. 33 In Buggy v Weathertex it was held at [50]-[53]: In WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at 706, the Full Bench noted the division of opinion in Mayo-Ramsay v Allen Taylor but found it unnecessary to resolve the different approaches for the disposition of the appeal. However, the Full Bench referred to the principles stated by Barwick CJ in Griffiths v The Queen at 310 (which include that such appeals should be a rarity) and the principles as to Crown appeals set out in R v Allpass at 562 - 563. The meaning of manifest inadequacy of sentence was discussed in the joint judgment of Gleeson CJ and Hayne J in Dinsdale v The Queen at 325 as follows: Manifest inadequacy of sentence, like manifest excess, is a conclusion. A sentence is, or is not, unreasonable or plainly unjust; inadequacy or excess is, or is not, plainly apparent. It is a conclusion which does not depend upon attribution of identified specific error in the reasoning of the sentencing judge and which frequently does not admit of amplification except by stating the respect in which the sentence is inadequate or excessive. It may be inadequate or excessive because the wrong type of sentence has been imposed (for example, custodial rather than non-custodial) or because the sentence imposed is manifestly too long or too short. But to identify the type of error amounts to no more than a statement of the conclusion that has been reached. It is not a statement of reasons for arriving at the conclusion. It is apparent from their Honours' discussion that there is a distinction between specified material error in the sentencing judge's approach or reasoning ( House v The King errors) and error on the face of the judgment demonstrated by the sentencing judge's conclusion, such as a manifestly inadequate or excessive sentence. The identification of either type of error is sufficient to enable intervention by an appellate court. The appellate court is not required, in our view, to find an additional element of novelty, as suggested by Hungerford and Peterson JJ in Mayo-Ramsay v Allen Taylor. Clearly, however, an appellate court in a Crown appeal has an obligation to act with caution or restraint, given the principle of double jeopardy and the Court's overriding discretion not to intervene: see Kirby J's observations in Dinsdale v The Queen (2000) 202 CLR 321 at 341 - 342 and in Wong v R (2001) 185 ALR 233 at 263; see also R v Allpass at 562 - 563, the joint judgment of Brennan , Deane , Dawson and Gaudron JJ in Everett v The Queen (1994) 181 CLR 295 at 299 and Batty v Graincorp . 34 The respondents agreed that these were the relevant principles, but noted also that the Full Bench in Buggy v Weathertex went on to discuss the issue of double jeopardy in re-sentencing (at [54]-[55]): The importance of the principle of double jeopardy particularly in re-sentencing has been acknowledged and applied by this Court on numerous occasions. See, for example, Batty v Graincorp at [5], where the Full Bench dealt with a Crown appeal against inadequacy of sentence. Patton v Fletcher Construction Australia Limited (No 2) [2003] NSWIRComm 94 at [3], [8]; Bultitude v Grice (No. 2) [2002] NSWIRComm 234 at [7]; Legge v Coffey (No 3) [2002] NSWIRComm 30 at [7]; Vierow v Ridge Consolidated Pty Ltd (No 3) [2002] NSWIRComm 345 [5]; Profab [41] - [45], Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143 at [17] are examples of cases of Crown appeals against acquittal where the principle has been applied. It is well established that an appellate court in re-sentencing, or deciding whether to re-sentence an offender, should have regard to the principle of double jeopardy. The application of the principle of double jeopardy provides for an imposition of a sentence that is somewhat less than the sentence the appellate court considers should have been imposed at first instance ( R v Allpass at 562), or at the lower range of available sentences: Dinsdale v The Queen at 341; Profab Industries Pty Ltd . 35 The respondents further relied on the High Court decision in Coulton v. Holcombe in which Gibbs CJ, Wilson, Brennan, Dawson JJ held (at 7): To say that an appeal is by way of rehearing does not mean that the issues and the evidence to be considered are at large. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at trial. If it were not so, the main arena for the settlement of disputes would move from the Court of first instance to the appellate Court, tending to reduce the proceedings in the former Court to little more than a preliminary skirmish … In our opinion, no distinction is to be drawn in the application of these principles between an intermediate Court of Appeal and an ultimate Court of Appeal. Finally, in a recent decision of six justices of this Court ( University of Wollongong v. Metwally (1985) 59 ALJR 481) the Court said: "It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberate or by inadvertence he failed to put during the hearing where he had an opportunity to do so." … 36 The principles to be applied in an appeal from a sentencing decision were discussed recently in Downie v Menzies Property Services at [25]-[30]. We adopt that discussion in the present matter, which for convenience we will set out: The principles to be applied in an appeal from a sentencing decision were considered recently by the Full Bench in WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Ltd (2003) 127 IR 60. The Full Bench in that matter discussed the High Court decision in Dinsdale v The Queen (2000) 202 CLR 321, noting the observations of Gleeson CJ and Hayne J that an appeal may arise either due to the imposition of a penalty which is manifestly inadequate (or manifestly excessive), or due to error on the face of the judgment or decision. We shall turn to consider that distinction in more detail shortly, however it is suffice to say that in evaluating error in a discretionary decision on appeal, such as a sentencing decision, the principles in House v The King apply. So much is clear from the decision in Drake Personnel, extracted earlier, where the Full Bench held that an appeal under s197 of the Industrial Relations Act is governed by the principles applicable to appeals generally brought under Part 7 of Chapter 4 of the Act, which relevantly includes s191. The same principles apply to appeals under s197A of the Industrial Relations Act. Section 191(3) stipulates that the Full Bench hearing an appeal (such as that under s197A) must follow the principles applying to appeals from discretionary decisions. The principles relevant to appeals from discretionary decisions are laid down in House v The King as follows: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance . In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. The Full Bench in Profab Industries gave a useful summary of the principles relevant to prosecution appeals from sentencing decisions (at [13]-[14]): A Full Bench of the Commission in Court Session has recently considered the question of the nature of prosecution appeals in WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) v Allen Taylor & Co Limited (1999) 92 IR 392. Although the Court was divided in its decision in that matter it is unnecessary to explore or resolve the different approaches for the disposition of this appeal. All members of the Court held that the relevant principles for such appeals are those referred to by Barwick CJ in Griffiths v The Queen at 310: On my view of the proper meaning of s 5D in the context of the Criminal Appeal Act , an appeal by the Attorney-General should be a rarity, brought only to establish some matter of principle and to afford an opportunity for the Court of Criminal Appeal to perform its proper function in this respect, namely, to lay down principles for the governance and guidance of courts having the duty of sentencing convicted persons Also pertinent for the present appeal is the Court of Criminal Appeal judgment in R v Allpass (where the Court was comprised of Gleeson CJ, Hunt CJ at CL and McInerney J). The principles set out in R v Allpass at 562 - 563 are in these terms: 1. A Court of Criminal Appeal which is dealing with an appeal against sentence does not simply embark upon the task of sentencing afresh, substituting its own opinion for that of the sentencing judge, and increasing the sentence if it considers it to be inadequate, or decreasing the sentence if it considers it to be excessive. An appellate court will only interfere if it is demonstrated that the sentencing judge fell into material error of law or fact. Such error may appear in the reasons given by the sentencing judge, or the sentence itself may be manifestly excessive or inadequate, and thus disclose error. However, the facts and circumstances of individual cases are often such that sentencing judges have a substantial discretion, and the appellate court does not intervene simply upon the basis that the members of that court would have exercised their discretion differently from the judge at first instance. 2. Crown appeals against sentence are relatively infrequent. The High Court has said that such appeals "should be a rarity": Griffiths v The Queen (1977) 137 CLR 293 at 310; Malvaso v The Queen (1989) 168 CLR 227 at 234; 43 A Crim R 451 at 456. One reason for this is the element of double jeopardy that is involved in such appeals. Rules designed to safeguard against double jeopardy are deeply embedded in our system of criminal justice: eg R v Dodd (1991) 56 A Crim R 451; Environment Protection Authority v Australian Iron & Steel Pty Ltd (1992) 28 NSWLR 502. Thus, for example, there is usually no right of Crown appeal against an acquittal at a trial. 3. If a Crown appeal against sentence is successful, and the appellate court re-sentences the respondent, it does so in the light of all the facts and circumstances as at the time of re-sentencing. Events which have occurred after the original sentencing may be relevant. 4. When, in response to a Crown appeal, the court decides to re-sentence an offender, it ordinarily gives recognition to the element of double jeopardy involved (in twice standing for sentence) by imposing a sentence that is somewhat less than the sentence it considers should have been imposed at first instance. 5. An appellate court has an overriding discretion which may lead it to decline to intervene, even if it comes to the conclusion that error has been shown in the original sentencing process. In this connection the conduct of the Crown at the original sentencing proceedings may be a matter of significance. 29 As earlier indicated, a Full Bench in WorkCover (Inspector Buggy) v Weathertex determined an appeal under s196 of the Act against the inadequacy of a sentence imposed at first instance. In considering the principles to apply on appeal, the Full Bench discussed the difference, identified in Dinsdale v The Queen by Gleeson CJ and Hayne J, between an error in the exercise of a discretion per se (that is, an error in the sentencing judge's reasoning) and an error on the face of the sentencing decision demonstrated, for instance, by a manifestly inadequate sentence (that is, an error in the sentencing judge's conclusion). The Full Bench held (at [50]-[53]): The meaning of manifest inadequacy of sentence was discussed in the joint judgment of Gleeson CJ and Hayne J in Dinsdale v The Queen at 325 as follows: Manifest inadequacy of sentence, like manifest excess, is a conclusion. A sentence is, or is not, unreasonable or plainly unjust; inadequacy or excess is, or is not, plainly apparent. It is a conclusion which does not depend upon attribution of identified specific error in the reasoning of the sentencing judge and which frequently does not admit of amplification except by stating the respect in which the sentence is inadequate or excessive. It may be inadequate or excessive because the wrong type of sentence has been imposed (for example, custodial rather than non-custodial) or because the sentence imposed is manifestly too long or too short. But to identify the type of error amounts to no more than a statement of the conclusion that has been reached. It is not a statement of reasons for arriving at the conclusion. It is apparent from their Honours' discussion that there is a distinction between specified material error in the sentencing judge's approach or reasoning ( House v The King errors) and error on the face of the judgment demonstrated by the sentencing judge's conclusion, such as a manifestly inadequate or excessive sentence. The identification of either type of error is sufficient to enable intervention by an appellate court. The appellate court is not required, in our view, to find an additional element of novelty, as suggested by Hungerford and Peterson JJ in Mayo-Ramsay v Allen Taylor. Clearly, however, an appellate court in a Crown appeal has an obligation to act with caution or restraint, given the principle of double jeopardy and the Court's overriding discretion not to intervene: see Kirby J's observations in Dinsdale v The Queen (2000) 202 CLR 321 at 341 - 342 and in Wong v R (2001) 185 ALR 233 at 263; see also R v Allpass at 562 - 563, the joint judgment of Brennan , Deane , Dawson and Gaudron JJ in Everett v The Queen (1994) 181 CLR 295 at 299 and Batty v Graincorp . We note that, notwithstanding the distinction identified by Gleeson CJ and Hayne J, their ultimate conclusion, and the conclusion of both the joint judgment of Gaudron and Gummow JJ and the judgment of Kirby J, is unmistakably that the principles in House v The King apply with respect to appeals against sentence. See also WorkCover Authority of New South Wales (Inspector Bultitude) v Grice Constructions Pty Limited (2002) 115 IR 59. submissions Submissions of WorkCover/appellant 37 WorkCover submitted that the decision at first instance demonstrated two fundamental errors of principle: first, the sentences imposed failed to reflect the objective seriousness of the offence; and secondly, the sentences failed to properly give effect to the principles of parity and equal justice in that the penalties did not reflect the relevant differences in the culpability of Brian and Graham Coleman. Objective seriousness of the offence 38 WorkCover submitted the purpose of s26 of the Act is to make individuals, such as the respondents, who are responsible for the management of a corporation, similarly responsible for the culpable acts and omissions of the corporation: Walco Hoist. In the present matter, both of the respondents were directors of the Company and both were directly concerned in the day-to-day management of the Company. Mr Hall submitted that Graham Coleman's culpability was greater than that of Brian Coleman by virtue of his direct supervisory responsibilities as Factory Foreman. Brian Coleman was nevertheless culpable because of his role as Managing Director, his responsibility for occupational health and safety in the workplace, and the failure to take any action immediately following the incident. It was WorkCover's submission that each of the respondents thus embodied both categories of persons brought within the compass of s26 of the Act, and that "in the absence of any mitigating objective factors in favour of the respondents arising from their roles in the management of the Company, it is submitted that the substantial disparity between the fine imposed upon the Company and those imposed upon the respondents manifests error in the imposition of inadequate penalties upon the latter". 39 It was WorkCover's contention that although the Chief Industrial Magistrate noted the seriousness of the offences, and identified the maximum penalty available, he imposed penalties on Brian and Graham Coleman which were at the extremely low end of the range, and did not correlate with the seriousness of the offences on the scale of penalty set by the Act. In that regard, WorkCover submitted that the task of the Court is to assess the relative seriousness of the offence in relation to a worst case for which the maximum penalty is provided, and having done so, to impose a penalty which approximately correlates with the relative seriousness of the offence on a scale from zero to the maximum: Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 689; Independent Cargo & Wool Services Pty Limited v Inspector Mingare (unreported, Fisher CJ, Glynn and Peterson JJ, 10 March 1994) at 4. 40 WorkCover submitted the Chief Industrial Magistrate did not have sufficient regard to general and specific deterrence in imposing penalties on Brian and Graham Coleman. As to general deterrence, reliance was placed on: (1) the significant increase in penalty which has occurred since 1996 emphasises the importance of deterrence in the sentencing process: Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [77]-[78]; WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 at 299; (2) whilst correctly determining that the offence warranted a penalty to deter others in industry from countenancing a "bullying culture", the penalties imposed do not reflect that need; (3) there is a significant public interest in deterring such conduct; and (4) The Court in WorkCover Authority of New South Wales (Inspector Farrell) v Morrison (No 2) (2002) 112 IR 312 (at 326) emphasised that: It is the "fundamental duty of this Court" to ensure that any penalty imposed is severe enough to "compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace": Fisher v Samaras Industries Pty Ltd (1996) 82 IR 382 at 388 adopted in Capral Aluminium (at par 74). 41 As to specific deterrence, WorkCover submitted that the Chief Industrial Magistrate failed to take account of the respondents' failure to take prompt and decisive disciplinary action against the perpetrators of the assault on Mr Doyle. Further, his Honour did not have regard to Brian Coleman's concession that "no one was ever dismissed over the whole incident, maybe we should have but we could not pinpoint at any point which one did what". 42 WorkCover submitted that in assessing the objective seriousness of the offence the Chief Industrial Magistrate placed insufficient weight on the gravity of the potential risk to safety flowing from the breach, being a factor relevant as a measure of the gravity of the breach and the culpability of the respondents: Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476. His Honour correctly identified that there was a potential risk of serious injury to Mr Doyle, such as suffocation, but erred in failing to impose penalties on Brian and Graham Coleman which reflected the seriousness of the offences as measured by the gravity of the potential risk to safety. 43 It was WorkCover's submission that the Chief Industrial Magistrate erred in failing to give proper weight to the respondents' failure to implement simple and feasible measures to avoid the risk to Mr Doyle's health and safety, in circumstances where there was an obvious and foreseeable risk. In the case of Graham Coleman, that risk was known. WorkCover submitted that: (1) the degree of foreseeability of the relevant risk is a significant factor to be taken into account when assessing the level of culpability ( Department of Mineral Resources (McKensey) v Kembla Coal and Coke Pty Limited (1999) 92 IR 8); (2) 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 ( Lawrenson Diecasting at 476); (3) the objective seriousness of the offence is also influenced by the availability of simple and straightforward steps to remedy the defects in the system ( WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Limited (unreported, Schmidt J, 25 February 1994) at 12.2); (4) the respondents were aware of prior reckless and dangerous behaviour by factory employees, and that Graham Coleman had been specifically warned by Mr Ciacchi of the potential incident involving Mr Doyle; and (5) simple measures such as creating and enforcing a policy prohibiting bullying in the workplace had not been taken by the respondents. 44 Finally, WorkCover submitted that the Chief Industrial Magistrate placed too much reliance on subjective factors. Specifically, there was no evidence that either Brian or Graham Coleman were unable to pay a significant fine; his Honour relied heavily on the fact that Brian and Graham Coleman were members of the same family and that the fine imposed on the Company would impact on that family; contrary to the principle in Walco Hoist (at [38]-[39]), the approach adopted by the Chief Industrial Magistrate was effectively to apportion culpability as between the Company and Brian and Graham Coleman. Further, any subjective features which operate in favour of Brian and Graham Coleman must be tempered by the fact that those directors failed to take appropriate steps to investigate and take disciplinary action after the incident. Parity as between Brian and Graham Coleman 45 WorkCover submitted that by virtue of s26 of the Act, Brian and Graham Coleman are "deemed to have been a party to the offence committed by the Company under s8 [of the Act] because of their complicity in such an offence". It was WorkCover's submission that the Act requires the culpability of the respondents to be assessed in discrete terms having regard to their role in the management of the Company in the context of the objective nature and gravity of the offence: Walco Hoist at [38]-[39]. Accordingly, particular weight must be placed on the respondents' roles in the management of the Company: Berrima Coal at [180]; Walco Hoist at [39]. 46 WorkCover submitted that the Chief Industrial Magistrate made a clear error of fact in his finding that Brian Coleman, not Graham Coleman, was forewarned of the "initiation ceremony" by Mr Ciacchi. 47 It was WorkCover's submission that Graham Coleman's prior knowledge of the incident, together with his direct supervisory responsibility, makes him more culpable than Brian Coleman. Brian Coleman did not have any specific forewarning that the incident would occur, and was "somewhat further removed from the day-to-day supervision of the employees compared with [Graham Coleman]". 48 WorkCover submitted that the principles of parity and equal justice requires that "like should be treated alike" but that due allowance in the imposition of penalties should be made for relevant differences in the respective culpability of co-offenders: see Lowe v The Queen (1984) 154 CLR 606 at 617-618; Postiglione v The Queen (1997) 189 CLR 295 at 301-302; Morrison (No 2) at 329. Submissions of the respondents/cross-appellants 49 Mr J Pearce of counsel appeared for the respondents. 50 In relation to s10 of the Crimes (Sentencing Procedure) Act, the respondents submitted that the misapplication of the evidence "clearly played a part in his Honour declining to exercise his discretion" under s10 of that Act. The respondents relied on Berrima Coal to support its contention that "in relation to an individual held to be culpable because of the operation of statutory provisions rather than directed action (or inaction), such [extraordinary and highly exceptional] circumstances can exist". In the respondents' submission, whilst there was evidence of harmless pranks in the workplace (such as gluing tool kits to the floor), there was no evidence of bullying in the workplace prior to the incident involving Mr Doyle, nor was there evidence of "initiation" events. The respondent contended that the single incident involving Mr Doyle was, in itself, an extraordinary and highly exceptional circumstance which warranted the exercise of discretion under s10 of the Crimes (Sentencing Procedure) Act. 51 In relation to the select prosecution of two of the four directors of the Company, the respondents submitted that s26 of the Act refers to "each" director of a company which has contravened the Act to be taken to have contravened the Act. In the present matter, WorkCover did not proceed against each director, but has penalised only two directors for the actions (or inactions) of four directors. 52 The respondents relied on the decision of Wright J in Walco Hoist at [38]-[39]: ... First the level of culpability of a personal defendant who is deemed to have committed the offence by virtue of s 50(1) cannot be greater than that of the corporation who has been convicted or otherwise assumed to be guilty for the purposes of the operation of the section. However, most pertinently for the present proceedings it must be recognised that the culpability of the personal or individual defendant may be less than that of the corporate defendant. It is not, in my view, a question of considering their relative contribution but assuming that the purpose of the provision is to make an individual who is responsible to an extent for the management of the corporation similarly responsible and culpable for the acts and omissions of the corporation. Although the relevant consideration is not whether, or to what extent, there is a level of contribution as between the corporate and individual defendants for the particular breach of safety which arose under the Act, it is nevertheless necessary when dealing with the precise gravity of the offence committed…to accept the possibility or, in many cases where the individual is not simply the alter ego of the corporation, the likelihood that the level of gravity of the offence attributable to the personal defendant may be less than that which has been found to have been committed by the corporate defendant - that is, in these proceedings the first defendant. In assessing the culpability of the second defendant, it is , in my view, important to place particular weight upon the role of the defendant in the management of the corporation and the nature of the gravity of the offence as identified in relation to the first defendant, and to make an assessment in that context of the second defendant. 53 The respondents further submitted that s26 of the Act provides as a defence the fact that a person has used all due diligence to prevent the contravention by the corporation. Whilst Brian and Graham Coleman have not sought to make such a defence, it is a matter which may be taken into account on sentencing. 54 It was the respondents' contention that when considered globally, that is, having regard to the effect of the penalties when combined with the fine of $24,000 imposed on the Company, the penalty imposed on the respondents was not manifestly inadequate: Haynes & Anor v CI&D Manufacturing Pty Limited (No 2) (1995) 60 IR 455. 55 The respondents agreed with WorkCover's submissions in relation to parity as between Brian and Graham Coleman. The respondent further submitted that the penalties imposed at first instance should be quashed and the Full Bench exercise its discretion under s10 of the Crimes (Sentencing Procedures) Act. Alternatively, that discretion should be exercised by this Full Bench at least in favour of Brian Coleman. Submissions of WorkCover in reply 56 As to the respondents' submission that a global approach, such as that taken in Haynes v CI&D Manufacturing, should be adopted WorkCover submitted that the fine in that case was apportioned equally between two related corporate defendants, unlike the present matter where the respondents were fined nominal amounts compared to the significant fine imposed on the Company. Further, the "global" approach proposed by the respondents is contrary to that applied by the court in Berrima Coal and Walco Hoist whereby s26 of the Act was held to have the purpose of making individuals who are responsible to an extent for the management of the corporation similarly responsible and culpable for the acts and omissions of the corporation. consideration 57 We turn firstly to consider the three alleged errors of fact, being the findings regarding Brian Coleman's prior knowledge of the incident; Graham Coleman's presence in the factory at the time of the incident; and the existence of a culture of bullying within the Company. Brian Coleman's prior knowledge of the incident 58 We are satisfied the Chief Industrial Magistrate in finding "On the evidence Brian Coleman was told of an initiation ceremony that may take place that day but apparently did nothing to prevent it" was in error. 59 The evidence clearly demonstrates that Graham Coleman was told of an impending incident by Mr Ciacchi. Mr Ciacchi gave the following evidence before the Chief Industrial Magistrate: Q Did you have any fears about something that was going to happen to yourself? A Something was mentioned to me that maybe because I was one of the new blokes they might turn on me sort of thing and I mentioned to Graham that if something was to happen to me that just beware that someone may get hurt because I'm not going to put up with any of that sort of misbehaviour so I was just basically looking out for myself I'd say. Q When you say Graham who do you mean? A Graham Coleman. Q When did you have this discussion with him? A Could have been maybe a day or two before, could have been the same day I'm really not sure. Q And to the best of your recollection can you tell his Worship what you actually said to Mr Coleman? A The things that I said to Graham was that I'd heard that maybe something was going to happen because I'm one of the new blokes something may happen to me and if something was to happen to me I do possess a bit of knowledge in self defence that I won't be scared to use it because I'm out to look, to defend myself and someone is either, they're going to get hurt or I'm going to get hurt so I just wanted to make him aware, make him aware of that. Q And did he say anything to you in response? A No, he just didn't really say anything he just looked at me and acknowledge it [sic] okay and yeah that was it. 60 Mr Ciacchi was not cross-examined in relation to this evidence. 61 In cross-examination, Brian Coleman obliquely challenged the veracity of Mr Ciacchi's evidence when he made the following statement: Robert Ciacchi came and made a statement [to the Company] when he did work for us and then he had a run in with the new factory foreman in the new year and then he got called back to make another statement and the second statement totally changed to the first statement. 62 No evidence was adduced as to how, if indeed at all, Mr Ciacchi's statements to his employer had changed. Brian Coleman was not cross-examined in relation to this statement. Graham Coleman did not give evidence before the Chief Industrial Magistrate, nor is there evidence before us of any interview being conducted by WorkCover with Graham Coleman. In those circumstances, Mr Ciacchi's evidence is conclusive. 63 In his recitation of the facts, his Honour incorrectly referred to Brian Coleman rather than Graham Coleman when describing Mr Ciacchi's evidence that "he [Mr Ciacchi] said he told Brian Coleman that he heard something may happen to him and said if it did he possessed knowledge of the martial arts and would defend himself and someone would get hurt. He said Brian Coleman did not reply to him". 64 It is possible that the Chief Industrial Magistrate either simply confused the respondents' names, or misheard or misunderstood the evidence. In any event, we agree that an error of fact was made. As earlier stated, the evidence demonstrates that Graham Coleman was told, prior to the incident involving Mr Doyle, that "something was going to happen" to one of the new employees. The evidence does not indicate that Graham Coleman had prior knowledge of the specific incident involving Mr Doyle. We understand that the matter attracted considerable media attention at the time, and Brian Coleman and his family were a particular focus of much of that attention as a result of the Chief Industrial Magistrate making an adverse finding against him in relation to his knowledge of the incident involving Mr Doyle. We wish to make it clear that Brian Coleman did not have prior knowledge of the incident. 65 Mr Pearce submitted the Chief Industrial Magistrate further misconstrued Mr Ciacchi's evidence as notifying Graham Coleman that another employee, other than Mr Ciacchi himself, may be at risk of being the subject of a prank or initiation. In our view, it is irrelevant whether Mr Ciacchi warned Graham Coleman that he was concerned for his own health and safety or that of another, albeit unidentified, employee. Having been told that there were rumours of a planned prank or "initiation", Graham Coleman was obliged to take immediate steps to investigate, detect and prevent any such incident taking place. This was particularly so in this case as the threat was levelled at "new blokes" which the [respondents] conceded included Mr Doyle. 66 Both WorkCover and the respondents (or at least Brian Coleman) relied on the principle of parity to submit the fine imposed on Brian Coleman should be less than that imposed on Graham Coleman, such as would reflect their different levels of prior knowledge of the incident and their different supervisory obligations. 67 We adopt this submission. Whist both Brian Coleman and Graham Coleman had high levels of responsibility for the management of the Company, Graham Coleman had actual responsibility for the day-to-day supervision of the factory employees. In those circumstances, Graham Coleman's failure to take any steps to prevent the incident, given his prior knowledge of the potential risk to the health and safety of an employee arising from the proposed "initiation", increases his culpability when compared to Brian Coleman. That being said, we note that Brian Coleman's culpability is also increased, although not to the same extent, by virtue of the fact that, having been made aware of the incident on the afternoon of 21 December 2001, he failed to take any action. Indeed, apart from general acknowledgements that the incident was inappropriate, Brian Coleman has shown little contrition. 68 The application of the principle of parity requires an adjustment to be made to the respective penalties imposed on Graham and Brian Coleman to reflect Graham Coleman's higher level of culpability. We note that any such adjustment will occur in circumstances where, as earlier stated, both penalties must inevitably be increased. We further note that this was never a case in which it would be appropriate for an order to be made under s10 of the Crimes (Sentencing Procedures) Act. We will discuss the application of that section later in our judgment. Graham Coleman's presence in the factory at the time of the incident 69 Graham Coleman seeks to appeal against the finding that he was present in the factory at the time of the incident. However, it is not abundantly clear on the face of the appeal documents whether Graham Coleman is suggesting that he wasn't present in the factory, that he wasn't present on the factory floor, or that he was present but was not supervising the factory floor. 70 This aspect of the appeal may be easily disposed of. The findings made by the Chief Industrial Magistrate in this regard are limited to the following: Graham Coleman was in charge of supervision on the factory floor where the incident occurred involving employees whom he supervised. However, his level of supervision did not deter these employees from carrying out their "ceremony" on this day. 71 There is no express finding, in our view, that Graham Coleman was present in the factory or on the factory floor at the time of the incident and no error is demonstrated. In any event, we do not consider that this argument advances the matter. It was not suggested that Graham Coleman witnessed the incident and failed to act. The relevant issue in determining Graham Coleman's culpability was his failure to adequately supervise the factory employees to prevent a risk to health and safety arising from a workplace "initiation", particularly in light of his prior knowledge that "something was going to happen". Existence of a culture of bullying within the Company 72 The Chief Industrial Magistrate made the following comments in relation to the culture of bullying at the Company's workplace (at 4): The impression I gained was that a culture of initiation existed within the factory and the fact the incident lasted approximately half an hour during working hours without management intervention enforces that impression. and later (at 5): What occurred on this day is often described as an initiation. It is a polite term for bullying. A bullying culture has been known to exist in some workplaces, often seen as a bit of fun at the expense of someone else. It is a culture that needs to be stamped out. Bullying has no place in the workplace. 73 Brian Coleman gave the following evidence in cross-examination: Q You raise the issue of someone throwing a glue bottle across the factory, of course you're aware that there had been some past prank behaviour on your factory floor were you not? A As far as the incidents in the factory you'd probably find issues like a roll of tape being thrown across the factory things like that, we give verbal warnings to employees, when they're severe or trying to hurt someone we given them official warnings and - Q Sorry, have you finished? A No you're right. Q And part of the past behaviour you're familiar or you're aware of was throwing of glue bottles at each other? A No I don't know about at each other. Throwing, I know glue bottles got thrown across the shed and exploded on walls, that's all I know about. Q Can I ask you to look at question 112 in your record of interview. You were asked about your awareness of other employees being subjected to incidents of bullying, you say no? A Yes. Q But that you've experienced in the past employees throwing glue bottles at each other, do you see that? A It is saying here that they have verbally, physically abused, throwing glue bottles and hitting brick walls is not them being physically abused. Q But you say that you were aware that they had been throwing them at each other, do you see that? A We're talking about one incident. Q I see - A Right, one incident. At the same time they used to roll up masking tape and use it as a cricket ball at the work Christmas party. 74 Brian Coleman's evidence clearly demonstrates that there was a history of workplace pranks, some of which were dangerous (such as employees throwing glue bottles against walls and at each other). Whilst Brian Coleman did not consider that there had been any pranks which were of a "serious nature", he gave evidence that the Company would issue official warnings in cases of "severe" incidents. Brian Coleman considered the incident involving Mr Doyle was a prank that "got completely out of control". Given Brian Coleman's acknowledgement that there was a history of pranks in the Company's workplace, and his characterisation of the "initiation" of Mr Doyle as an out-of-control prank, there are grounds, in our view, to find that there was, in fact, a culture of initiation at the Company's workplace. 75 However, we agree with WorkCover that the "impression" obtained by Chief Industrial Magistrate Miller of a "culture of initiation" within the factory was merely incidental to the essential facts made out on the evidence that were sufficient to establish the respondents' culpability. We are satisfied that his Honour's impression of the Company's workplace culture did not ultimately affect his decision. The conclusions reached by the Chief Industrial Magistrate were concerned with the occurrence of the specific incident involving Mr Doyle. There was no suggestion in his Honour's findings that the respondents' breaches of the Act were aggravated by the existence of a culture of initiation. . Irrespective of whether there was a culture of initiation, it was relevant in the present matter that there was a known history of workplace pranks which, in our view, revealed a potential risk to health and safety. We are not willing to simply dismiss such conduct as harmless pranks or workplace high-jinks. Having fun at the expense of another person is bullying. We do not propose disturbing his Honour's decision on this ground. 76 Having determined the various questions of fact raised, we turn to consider WorkCover's appeals. We do so having regard to the corrections we have made to those facts in the preceding passages. WorkCover appeals 77 It is well established that the true measure of penalty is the nature and quality of the offence. The primary factor when determining sentence is the objective seriousness of the offence. Whilst subjective factors may mitigate the seriousness of the offence, consideration of such factors must be secondary to a consideration of the nature and quality of the offence: Lawrenson Diecasting; Capral Aluminium; Ridge Consolidated Pty Limited v WorkCover Authority of New South Wales (Inspector Mauger) (2002) 115 IR 78; WorkCover Authority of New South Wales (Inspector Patton) v Fletcher Constructions Australia Limited [2002] NSWIRComm 316. 78 Having regard to those well established principles, we are satisfied that the Chief Industrial Magistrate fell into appealable error by failing to give sufficient weight to the objective seriousness of the offence and placing too much weight on subjective elements. Not only does the decision demonstrate identifiable appealable error in his Honour's failure to give sufficient weight to a material consideration, the sentences imposed by the Chief Industrial Magistrate on both Brian and Graham Coleman were so manifestly inadequate, even having regard to the adjustment we have proposed to reflect their respective levels of culpability, that appellate intervention is warranted: Dinsdale v The Queen (2000) 202 CLR 321. 79 In our view, in determining the objective seriousness of the offences of Brian and Graham Coleman, the Chief Industrial Magistrate Miller failed to have sufficient regard to the need for deterrence (both general and specific), the foreseeability of the risk, and the failure to implement simple and feasible measures to avoid the risk to health and safety. 80 Firstly, the Chief Industrial Magistrate underrated the importance of general deterrence in determining the level of penalty. The Court in WorkCover Authority v Schrader held at [69]-[70]: The purpose of the Act is well known and often referred to in judgments of this Court. In my view, it is important, when considering notions of general deterrence, that the Court be cognisant of the fact that the Act is for the benefit of the public generally and particularly employees at work. The goal is the prevention, deterrence and punishment of breaches of health and safety requirements. The notion of general deterrence is well understood. However, in my view, and in accordance with what was stated by the Full Court in Capral Aluminium (at [72] - [74]), in cases such as this, it should be reiterated that "one of the main purposes of punishment, ... is to protect the public from the commission of such crimes by making it clear to the offender and to other persons with similar impulses that, if they yield to them, they will meet with severe punishment" (emphasis added): R v Rushby [1977] 1 NSWLR 594 at 597 per Street CJ citing R. v Radich [1954] NZLR 86 at 87 (adopted by this Court in Capral Aluminium at [72]). Further, I would note that it has been described as "the fundamental duty of this Court" to ensure that any penalty imposed is severe enough to "compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace": Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 adopted in Capral Aluminium (at [74]). See also the Full Bench decisions in Inspector Ian Lancaster v Burnshaw Constructions Pty Ltd [2002] NSWIRComm 319. 81 In relation to the Company, the Chief Industrial Magistrate stated that with "regard to general deterrence the Court must indicate to others in industry that this type of incident will not be countenanced. The community's expectation in regard to breaches of this legislation must be met." His Honour went on to impose a substantial fine on the Company. However, the Chief Industrial Magistrate made no such comment in relation to general deterrence when determining the sentence to be imposed on the respondents. It is not to the point that the Company is a family business, or that the fine imposed on the Company may impact on the respondents personally (although we have seen no evidence to that effect, and as we will discuss later, such an approach is wrong in principle). The same considerations of general deterrence apply when sentencing individuals prosecuted under s26 of the Act. In our view, given that workplace bullying is usually a clandestine activity, there is a significant potential for employers to either deny its existence or ignore its occurrence. In those circumstances, there is a need for this Court to impose sentences which compel attention to occupational health and safety. Accordingly, issues of general deterrence are significant in the determination of penalty in the present matter. 82 The Full Bench in Capral Aluminium commented as to the purpose of deterrence in relation to offences that are difficult to detect (at [80]): Finally, in relation to the question of deterrence, we should draw attention to the line of authority which emphasises that deterrence should be a matter of significant weight in the sentencing process where the relevant offences are difficult to detect. See, for example, R v Pantano (1990) 49 A Crim R 328 at 330 and R v Omer (unreported, Victorian Court of Appeal, 15 February 1996 at 7) where Winneke P cited with apparent approval the judgment of the Victorian Court of Criminal Appeal in R v McGown (unreported, 4 December 1985). Our present, albeit preliminary view, is that this is a consideration relevant to the sentencing for serious breaches of the Act. The experience of this Court indicates that prosecutions for offences occur only where an accident of some significance, or serious injuries, and usually both, have occurred. It follows that there are many offences which occur which are not accompanied by such serious consequences and therefore may escape detection. This is a matter which may need to be considered in future decisions of this Court where questions of deterrence are raised. 83 We have little doubt that bullying is, unfortunately, prevalent in many workplaces. The nature of bullying is such that it is usually covert and not disclosed by either the offender or the victim. It is not surprising, therefore, that breaches of the Act relating to bullying and violence in the workplace would fall within the category of breaches that are difficult to detect and are rarely reported. Having regard to the comments of the Full Bench in Capral Aluminium and having regard also to the seriousness of the respondents' breach, we find issues of deterrence must loom large in our consideration as to penalty. 84 Secondly, the Chief Industrial Magistrate failed to give sufficient weight to specific deterrence, which is a matter "which would normally be given weight of some substance in the sentencing process": Capral Aluminium at [74]. Chief Industrial Magistrate Miller held that "[the respondents] recognise whilst they cannot undo the past they have ensured that a similar offence will not take place in the future" and that "the need for specific deterrence is negligible". We do not agree. 85 The evidence demonstrates that the Company has introduced procedures in relation to an anti-violence/bullying/harassment and sexual harassment policy, and has employed an occupational health and safety specialist. However, the Company took no steps to investigate the incident until after it was contacted by the WorkCover Authority of New South Wales. No employee was dismissed or disciplined as a result of the incident, other than to receive a general reprimand at a group meeting. 86 Employers must adopt an approach to safety that is proactive, not reactive: Ridge Consolidated v Meagher; Profab at [37]; WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 at 85; Patton v Fletcher Constructions (at [43]). But for the present prosecutions, there is nothing to indicate that either the Company or the respondents had been or would be on the offensive that is, proactive, in an endeavour to detect and eliminate risks to health and safety at the workplace relating to bullying and violence. Despite the commendable steps taken by the Company after the incident, we are satisfied that the need for specific deterrence must play a significant role in the determination of penalty. 87 Thirdly, the foreseeability of the risk is relevant to the objective seriousness of the offence. In Capral Aluminium a Full Bench held (at [81]-[82]): The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice-President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 27: Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432, the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence: see Camilleri's Stock Feeds (32 NSWLR at 700); James Moore v Vibro-Pile (Aust) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at 17) and Work Cover Authority of New South Wales (Inspector Kelsey) v University of Sydney (unreported, Hill J, CT95/1280, 12 April 1997 at 16). The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. 88 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: Inspector Hanah v Wonar Pty Ltd (unreported, Fisher CJ, CT90/1214, 30 June 1992) at 9; Lawrenson Diecasting at 476. 89 In the present case, the risk that an employee may be subjected to violence or bullying in the flimsy guise of a workplace "initiation" was not only foreseeable, but was foreseen (at least by Graham Coleman). In Inspector Barbosa v McDonalds Australia Limited [2003] NSWIRComm 196, the Court addressed the issue of risks that are not only foreseeable, but are foreseen (at [109]): It is well settled that the existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature (see Capral Aluminium (2000) 99 IR 29 at [81] - [82]). The fact that the risk to safety as particularised in a given prosecution has actually been foreseen by a defendant will, in my view, have the effect of further aggravating the nature and seriousness of an offence under the Act. This observation must, of course, be tempered by a recognition of all the circumstances of the particular case. 90 We note also the decision in Axer Pty Ltd v Environmental Protection Authority (unreported, Court of Criminal Appeal, Matter No. 60763 of 1992, 22 November 1993), in which the Court of Criminal Appeal was required to determine whether a fine imposed under the Environmental Offences and Penalties Act 1989 was too severe. Badgery-Parker J, with whom Finlay J agreed, held that pollution occurring as the unforeseen consequence of the defendant's conduct, even though such a consequence may be foreseeable, involves a lesser level of criminality. In our view, the corollary must also be true, that is, that conduct which has a foreseen consequence involves a higher level of criminality or culpability. 91 We have commented earlier that Brian Coleman had knowledge of previous workplace pranks. In our view, the risk that an incident, such as that involving Mr Doyle, may occur was clearly foreseeable by Brian Coleman. In the case of Graham Coleman, his knowledge of the potential "initiation" of a new employee on 21 December 2001 rendered that risk not only foreseeable, but foreseen. No policies or procedures were in place to prevent workplace pranks, bullying, "initiations" or violence. The fact that those policies and procedures were implemented following WorkCover prosecutions relating to the incident involving Mr Doyle demonstrates that those were feasible and appropriate measures which could have been taken to prevent the assault on Mr Doyle. 92 In his consideration of the subjective factors which may mitigate the seriousness of the offence, the Chief Industrial Magistrate had regard to the respondents' character, their family responsibilities, their church and charitable work, their local community activities and their good prior record. He considered that "subjective factors mitigate highly in [the respondents'] favour". His Honour further stated that "both directors accept the responsibilities of the actions of their company". We accept Mr Pearce's submission that there were significant subjective considerations in the present matter, however those considerations are overstated. 93 Further, the evidence demonstrates an absence of contrition by either Brian or Graham Coleman. Rather than showing concern or contrition, the respondents' response to the incident was to issue Mr Doyle with an official warning for failing to attend work and to then terminate his employment. Brian Coleman's evidence demonstrated that, not only did he deny that the incident occurred in the manner claimed by Mr Doyle, but also raised issues as to whether Mr Doyle had suffered any "formal" psychiatric injury. The respondents' lack of contrition is further demonstrated by the fact that they both entered a late plea of guilty only after they unsuccessfully sought to pursue a technical defence to the prosecutions. 94 Whilst we acknowledge that subjective factors, such as the respondents' prior record, may be relevant when determining sentence, they must be considered secondary to the objective seriousness of the offence. In that context, given the objective seriousness of the offences, the nominal fines imposed on Brian and Graham Coleman indicate that excessive weight has been placed on subjective considerations. 95 One further matter warrants comment. The respondents made a particular point of emphasising their role in the community, and as employers of young people. A statement made by Brian Coleman included the following: As part of the Company's operations, we would from time to time take on junior staff. The company had a policy of trying to assist young people who were having difficulties. 96 The Company and the respondents are to be applauded for their commitment to building and supporting their local community. However, we wish to highlight the responsibilities that are associated with the employment of young people, who are for the most part industrially inexperienced and particularly vulnerable. The Company should be acutely alert to those responsibilities, given that the young people it employs are, to use Brian Coleman's term, "troubled teenagers". Brian Coleman's evidence was that "As part of the Company's operations, we would from time to time take on junior staff. The Company had a policy of trying to assist young people who were having difficulties... [Mr Doyle] was employed at the request of his mother after discussions suggested that he had left school prior to finishing any final exams. His mother thought that the Company could employ [Mr Doyle] in an attempt to assist him establish some direction in his life". Clearly Mr Doyle was a vulnerable young person, not only because of his age, but because he was in need of constructive support and guidance., We note and adopt in this regard what was said by the court in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another (2000) 95 IR 383 (at [230]): ... the existence of a risk to safety in a business which engages a large number of young, inexperienced and vulnerable workers, ... must enhance the seriousness of the offence. 97 We are satisfied that error is clearly demonstrated in the Chief Industrial Magistrate's decision by virtue of insufficient weight being given to the objective seriousness of the offence. In particular, his Honour underrated the need for deterrence (both general and specific), the foreseeability of the risk, and the fact that measures were not taken to minimise that risk despite those measures being available and feasible, and at the same time gave too much consideration to subjective factors such as the respondents' good character and prior record. We consider that the objective seriousness of the matter is such that the penalties imposed at first instance against the directors were manifestly inadequate. 98 We turn then to consider two matters raised in the cross-appeals: firstly, the question of the select prosecution of two of the four directors of the Company; and secondly, the respondents' contentions regarding s10 of the Crimes (Sentencing Procedure) Act. Select prosecution of two directors 99 It is the role of WorkCover to determine who is prosecuted for breaches of the Act. It is not appropriate that we have regard to the potential liability of other parties, including other directors of the Company, in sentencing the respondents. The Court considered the question as to whether it was required to ensure parity between offenders, whether prosecuted or not, in Inspector Ankucic v McDonald's. There it was held (at 437): The absence of a prosecution of another entity merely serves to emphasise the unfairness that may be occasioned to a defendant in the assessment of the objective seriousness of an offence if a proper assessment of their contribution to an accident is not undertaken. and later: Embarking upon an inquiry as to whether prosecutions should have been commenced or continued against various entities, or whether those prosecutions may have been successful, would involve the Court conducting a procedure which would be, as WorkCover submitted, tantamount to conducting a trial of the other entities. In any event, the Court would, if it adopted the contentions of approach by the defendants, be required to make unqualified adverse findings concerning an entity which had no opportunity to answer the allegations made against it. 100 We adopt this approach here and find no error in the Chief Industrial Magistrates decision in this respect. Exercise of discretion under s10 of the Crimes (Sentencing Procedure) Act 101 Section 10 of the Crimes (Sentencing Procedure) Act is in the following terms: 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years, (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. (2) An order referred to in subsection (1) (b) may be made if the court is satisfied: (a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or (b) that it is expedient to release the person on a good behaviour bond. (2A) An order referred to in subsection (1) (c) may be made if the court is satisfied that it would reduce the likelihood of the person committing further offences by promoting the treatment or rehabilitation of the person. (2B) Subsection (1) (c) is subject to Part 8C. (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. (4) An order under this section has the same effect as a conviction: (a) for the purposes of any law with respect to the revesting or restoring of stolen property, and (b) for the purpose of enabling a court to give directions for compensation under Part 4 of the Victims Compensation Act 1996; (c) for the purpose of enabling a court to give orders with respect to the restitution or delivery of property or the payment of money in connection with the restitution or delivery of property. (5) A person with respect to whom an order under this section is made has the same right to appeal on the ground that the person is not guilty of the offence as the person would have had if the person had been convicted of the offence. 102 A Full Bench of this Court recently considered the principles relevant to the application of s10 of the Crimes (Sentencing Procedure) Act in Downie v Menzies Property Services. There it was held (at [45]-[47]): There is abundant, clear authority for the proposition that s10 of the Crimes (Sentencing Procedure) Act, like its predecessor s556A of the Crimes Act , will be available only in rare, limited circumstances in proceedings under the Occupational Health and Safety Act (see, for instance, Riley v Australian Grader Hire and McCarthy v Sell & Parker. ) The principles relevant to the application of s10 of the Crimes (Sentencing Procedure) Act were considered in Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd & Anor (2001) 105 IR 348 (at [169]-[177]): The application of the former equivalent of s10 of the Crimes (Sentencing Procedure) Act 1999, that is, s556A of the Crimes Act 1900, was recently and comprehensively considered in WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700. In that decision, the Full Bench of the Commission in Court Session pointed out the clear and long standing authority which established the rarity of situations in which such an ameliorative provision was available to a defendant under the Act. The Full Bench stated (at 26): Nevertheless, in occupational health and safety offences before this Court the exercise of the discretion under s 556A (cf s 10 of the Crimes (Sentencing Procedure) Act 1999) must be considered as extraordinary and highly exceptional. When a defendant seeks its exercise cogent reasons must, in our view, be provided by the defendant for such exercise and also by the judge acceding to that submission. The obligation is increased rather then diminished in a situation, such as the present, where the exercise of the discretion is not sought by the defendant but raised by the Court. It should be noted that the Full Bench in Profab followed the judgment of the former Industrial Court in WorkCover Authority of NSW v Waugh (1995) 59 IR 89 at 101 wherein it was stated that the discretion available under s556A would be rarely available in significant offences against the legislation. Further, in a recent discussion of s10 of the Crimes (Sentencing Procedure) Act 1999, the Full Bench of the Commission in Court Session reiterated that the exercise of such a discretion is saved for extraordinary and highly exceptional circumstances (see Australian Grader Hire ). I shall apply the principles stated in Profab and Australian Grader Hire in this matter. In Waugh, the former Industrial Court had noted that the company and the personal defendant had a prior good character. However, this seemed to be due to good fortune rather than good conduct. The Court approached the question of s556A in quashing the decision at first instance as follows (at 101): We consider that in serious cases where, as found by her Honour, the risk of injury from an accident was not one difficult to foresee, where the breach could and did result in serious consequences to the health of the injured man, where the risk of injury was preventable and where a safety fence with an isolation device was installed without difficulty after a second inspection, the operation of s556A of the Crimes Act to such proceedings would seldom be appropriate. If such an application is pressed but opposed it should normally be supported by evidence subject to cross-examination rather than the untested assertions made from the bar table. This approach was applied by Hungerford J in WorkCover Authority of New South Wales v Neaves [1996] NSWIRComm 58. His Honour rejected an application under s556A of the Crimes Act 1900 because the detriment to safety there occasioned by the employee had been foreseeable and the work practice involved was known to be dangerous and resulted in serious injury. His Honour found that the risk could have been prevented. In applying the foregoing authorities to an application for the exercise of the Court's discretion under s10 of the Crimes (Sentencing Procedure) Act , it is important, however, to bear in mind that each matter requiring consideration under s10 of that Act needs to be considered in the light of its own particular circumstances: WorkCover Authority of New South Wales (Inspector Robins) v Ecolab Pty Ltd (1999) 90 IR 413 at 430. We consider the statements of principle in Profab Industries, summarised in Department of Mineral Resources v Berrima Coal and affirmed in Riley v Australian Grader Hire , as to the application of s10 of the Crimes (Sentencing Procedure) Act are correct and we apply those principles in the present matter. 103 We similarly adopt those statements of principle in the matter presently before us. 104 Mr Pearce conceded, correctly in our view, that if the respondents were unsuccessful in their respective cross-appeals in relation to the findings of fact they challenged, then there would be no proper basis for the exercise of discretion under s10 of the Crimes (Sentencing Procedures) Act. As earlier stated, we have not found in favour of the respondents in relation to their challenges to the Chief Industrial Magistrates' factual findings. 105 In any event, we agree with the Chief Industrial Magistrate that the breach of the Act by the Company, and by Brian and Graham Coleman, was a serious one. In those circumstances, and given also our finding that the fines of $1,000 imposed on Brian and Graham Coleman represent manifestly inadequate penalties, it is unfathomable, in our view, that the incident involving Mr Doyle could fall into the category of "extraordinary and highly exceptional circumstances" such that the exercise of s10 of the Crimes (Sentencing Procedure) Act could be contemplated, let alone warranted. Penalty 106 What, then, is an appropriate level of penalty? 107 We are conscious of the need to adopt a conservative approach to a review of penalty due to the potential for double jeopardy. The relevant principles are set out in Buggy v Weathertex at [53], extracted earlier. See also Downie v Menzies at [95]-[96], Inspector Ian Batty v Graincorp Operations Limited [2002] NSWIRComm 49 at [4]; WorkCover Authority of New South Wales (Inspector Mansell) v Jian Chen and Obing Pty Limited trading as Old But New [2004] NSWIRComm 247 at [16] and [17]. 108 We are conscious of the need to have regard to the financial position of the respondents in appropriate cases. In that regard, the relevant authorities were discussed in WorkCover v Schrader 84 at [83] to [86]: 83 The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at [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 (1999) 92 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200 - 201. 84 This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at [81] - [82]): ... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at p339); WorkCover Authority of New South Wales (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at p333; and Profab Industries (49 NSWLR at p714, 100 IR at p76). However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at pp209 - 210, Wright J, President observed : "... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. ... ... When viewed in the context of the statutory mandate in s15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ..." 85 I would reiterate what the Court stated in WorkCover Authority of NSW (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 (at 476): Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see Rahme (1989) 43 A Crim R 81 at 86 (See also Inspector William Hopkins v Michael Wherritt trading as M J Wherritt Concrete Pumping Services [2002] NSWIRComm16 at [59] - [60]). 86 Having regard to the aforementioned authorities regarding the relevance of the financial means of a defendant, I shall significantly reduce the amount of fine which would have otherwise been ordered to be paid by the defendant due to the defendant's limited means and impecuniosity. See also Inspector Brian Dell v Jeffrey Fitzpatrick (2003) 121 IR 173 at [14]. 109 However, in our view, this is not an appropriate case to allow a discount for financial reasons. In the present matter, evidence was presented as to the "modest profits" earned by the Company in 2002 and losses sustained in 2003. The Chief Industrial Magistrate held that "in regard to the individual directors I note particularly it is a family company and the fine to be paid by the [Company] will impact directly upon the directors and their families". We do not consider that approach to be a correct application of principle: See WorkCover v Jian Chen. The financial statements of the Company do not demonstrate impecuniosity, nor is their evidence before us that the Company's financial position is determinative of the respondents' financial means. No evidence was provided regarding the respondents' impecuniosity. Further, there was no evidence to suggest that a more substantial fine would impose an undue burden on the respondents, and no oral submissions were made in that regard. 110 Of fundamental importance to the administration of justice is a consideration of parity when determining sentence: Griffiths v The Queen (1997) 194 CLR 293 at 326-327; Signato v The Queen (1998) 194 CLR 656 at 670; Capral Aluminium at [62] - [65]; Inspector Ankucic v McDonalds at 434; P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102. 111 The principle of parity was described in the joint judgment of Dawson and Gaudron JJ in Postiglione v The Queen (at 301-302) as follows: The parity principle upon which the argument in this Court was mainly based is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated. On some occasions, different sentences may indicate that one or other of them is infected with error. Ordinarily, correction of the error will result in their being a due proportion between the sentences and there will then be equal justice. However, the parity principle, as identified and expounded in Lowe v The Queen , recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to "a justifiable sense of grievance". If there is, the sentence in issue should be reduced, notwithstanding that it is otherwise appropriate and within the permissible range of sentencing options. Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality. 112 As earlier discussed, we consider that Graham Coleman's level of culpability, having regard to the fact that he was directly responsible for the supervision of employees, was higher than that of Brian Coleman. 113 The fine imposed on the Company was a significant one. By comparison, the fines imposed on the respondents were nominal. We agree with Chief Industrial Magistrate Miller that "the directors are the directing mind of a corporation that has seriously failed to ensure the health and safety of an employee who on the [respondents'] evidence was a vulnerable person". WorkCover submitted that the substantial disparity between the fine imposed on the Company and those imposed on Brian and Graham Coleman is itself a manifestation of error. Whilst we do not consider that is a matter which we are required to resolve, we have some reservations regarding the approach proposed by WorkCover. 114 Mr Pearce submitted that, in determining the penalties imposed on the respondents, the Chief Industrial Magistrate implicitly had regard to the modest penalties imposed on the Company employees who were convicted of charges relating to their involvement in the incident. By comparison, therefore, the nominal penalties imposed on the respondents were appropriate. That submission is inventive, but it is wrong. 115 The maximum penalty for each of the offences was $55,000. We have had regard to the maximum penalty, the penalty imposed on the Company and the issue of parity, equal justice and double jeopardy. We have also had regard to the objective seriousness of the offence, as well as subjective factors which mitigate the seriousness of the offence as earlier discussed by us in this judgment. We propose setting aside the penalties imposed by the Chief Industrial Magistrate on the respondents and in lieu thereof imposing a penalty of $9,000 on Brian Coleman and $12,000 on Graham Coleman. orders 116 We make the following orders: (1) Leave to appeal is granted. (2) The appeals in Matter Nos IRC 3054 and 3055 are upheld. (3) The orders made by Chief Industrial Magistrate Miller of 5 May 2004 in Plaint No 20085304/03/2 and Plaint No 20085291/03/2 are set aside. (4) In lieu thereof: (a) a penalty of $9,000 is imposed on Brian Gerard John Coleman; (b) a penalty of $12,000 is imposed on Graham Gerard Coleman; and (c) a moiety of the above fines are payable to the WorkCover Authority of New South Wales. (5) The appeals in Matter Nos IRC 3310 and 3313 of 2004 are dismissed. (6) The respondents are to pay the appellant's costs as agreed or assessed. 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