Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Colin West v Romaly Holdings Pty Limited [2003] NSWIRComm 265 PROSECUTOR: Inspector Colin West PARTIES : DEFENDANT: Romaly Holdings Pty Limited ACN 001 094 837 FILE NUMBER: IRC 2230 of 2002 CORAM: Schmidt J CATCHWORDS : Occupational Health and Safety - prosecution under section 15(1) of the Occupational Health and Safety Act 1983 - trucking business - plea of guilty - 30 year unblemished record - falling pallet - forklift operator - risk readily foreseeable - general deterrence - specific deterrence - defendant convicted of the offence charged - penalty imposed - moiety to prosecutor - defendant to pay prosecutor's costs as agreed or assessed LEGISLATION CITED : Fines Act 1996 Occupational Health and Safety Act 1983 CASES CITED : Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Inspector Ian Lancaster v Burnshaw Constructions Pty Ltd (2002) NSWIRC 319 HEARING DATES: 07/25/2003 DATE OF JUDGMENT: 08/25/2003 PROSECUTOR: Mr DB O'Neil of counsel SOLICITORS: Carroll & O'Dea LEGAL REPRESENTATIVES: DEFENDANT: Mr MP Cahill of counsel SOLICITORS: Lander & Rogers JUDGMENT: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J DATE: 25 August 2003 Matter Number IRC 2230 of 2002 INSPECTOR COLIN WEST v ROMALY HOLDINGS PTY LIMITED Prosecution under section 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 This prosecution was brought under s15(1) of the Occupational Health and Safety Act 1983 ('the Act'). The defendant entered a plea of guilty. 2 The offence charged was: 'Romaly Holdings Pty. Ltd, an incorporated company in the state of New South Wales whose registered office is at Suite 1, 68 Clarence Street, Port Macquarie in the State of New South Wales ("hereinafter referred to as the Defendant") being an employer on 19 April 2000, at 22 Jambali Road, Port Macquarie ("the site") in the State of New South Wales. DID FAIL , contrary to Section 15(1) of the Occupational Health & Safety Act 1983 (NSW) to ensure the health, safety and welfare at work of all of the Defendant's employees and in particular, Mr John Alexander Barnes in that the Defendant failed to provide or maintain a system of work that was safe and without risk to health. The particulars of the charge are as follows:- (a) At all material times, the Defendant conducted a trucking business in the said State and used a trading name "Pearson's Transport". (b) At all material times, the Defendant employed Mr John Barnes ("Barnes") as a truck driver. In the course of the Defendant's business, truck drivers such as Barnes would be required to drive a truck, to load and unload the truck at other workplace depots such as the Brambles Australia Limited t/as as(sic) Cheps (sic) Australia ("Brambles") depot at 22 Jambali Road, Port Macquarie in the said State ("the site"). (c) As at 19 April 2000, the Defendant did not require its employed truck drivers, such as Barnes, to exclude themselves from the loading area at the site whilst their trucks were being loaded with pallets. (d) On 19 April 2000, Barnes, in the course of his employment with the Defendant attended the site in the truck. A forklift driver, John Thompson, an employee of Brambles was using a forklift to load pallets onto the rear of the truck which had been driven to the site by Barnes. In the course of this process, a pallet fell from the top of a stacked load of pallets which was being manoeuvred into position by the forklift, striking Barnes on the head. (e) Brambles, at the time of this accident, had in force a Safety Manual, Reference SM303 dated 25 July 1998. Relevantly, that manual provides as follows: "5.2.4 At no time while a truck driver is in the cabin of his truck, or unroping/roping up his load, shall a forklift operator unload/load or attempt to do so. It is recognised that tautliner drivers may need to move the curtains on their trailers during loading/unloading. Forklifts must stay well clear of the trailer while this occurs. 5.2.5 If during the process of unloading/loading a truck, the driver approaches the vehicle, the loading process shall cease until the driver is clear. If a driver consistently approaches his vehicle, or insists on remaining in the cabin, the yard foreman shall approach him/her and failing the appropriate response, report the incident/driver to the office. The office shall then contact the driver's workplace and advise them of our policy and the reason for any delay." (f) However, prior to the subject incident, Brambles did not advise the Defendant of this policy; nor did Brambles take any steps to enforce this policy with respect to the activities of the Defendant's drivers whilst present at that site. (g). In the subject accident, Barnes suffered serious injuries including three (3) fractures of the skull, total deafness in the right ear, severe hearing loss in the left ear, loss of smell, diminished sense of taste, changes in his voice due to damage to the throat, persistent dizziness and five (5) stitches in the lower left cheek resulting in a scar. (h) After the accident suffered by Barnes, Brambles introduced a policy excluding all personnel, whether employees or not, from loading areas during loading or unloading operations. 3 The agreed statement of facts provided, relevantly: 1. At all material times the Informant was: (a) an Inspector duly appointed under Division 4 of Part 3 of the Occupational Health and Safety Act 1983 (NSW) ("the 1983 Act"); (b) taken to be appointed as an Inspector under the Occupational Health and Safety Act 2000 ("the 2000 Act") by virtue of Clause 11 of Schedule 3 to the 2000 Act; and (c) empowered under s.106 of the 2000 Act, as extended by Clause 13 of Schedule 3 to that Act to institute proceedings in the within matter. 2. At all material times the Defendant, Romaly Holdings Pty Ltd, was an incorporated company whose registered office was at Suite 1, 68 Clarence Street, Port Macquarie in the State of New South Wales ("hereinafter referred to as the Defendant") being an employer on 19 April 2000, at 22 Jambali Road, Port Macquarie ("the site") in the State of New South Wales. 3. At all material times, the Defendant conducted a trucking business in the said State and used a trading name "Pearson's Transport". 4. At all material times, the Defendant employed Mr John Barnes ("Barnes") as a truck driver. In the course of the Defendant's business, truck drivers such as Barnes would be required to drive a truck, to load and unload the truck at other workplace depots such as the depot of Brambles Australia Limited t/as as (sic) Chep Australia ("Brambles") at the site. 5. As at 19 April 2000, the Defendant did not require its employed truck drivers, such as Barnes, to exclude themselves from the loading area at the site whilst their trucks were being loaded with pallets. 6. On 19 April 2000, Barnes, in the course of his employment with the Defendant attended the site in the truck. A forklift driver, John Thompson, an employee of Brambles was using a forklift to load pallets onto the rear of the truck which had been driven to the site by Barnes. In the course of this process, a pallet fell from the top of a stacked load of pallets which was being manoeuvred into position by the forklift, striking Barnes on the head. 7. Brambles, at the time of this accident, had in force a Safety Manual, Reference SM303 dated 25 July 1998. Relevantly, that manual provides as follows: "5.2.4 At no time while a truck driver is in the cabin of his truck, or unroping/roping up his load, shall a forklift operator unload/load or attempt to do so. It is recognised that tautliner drivers may need to move the curtains on their trailers during loading/unloading. Forklifts must stay well clear of the trailer while this occurs. 5.2.5 If during the process of unloading/loading a truck, the driver approaches the vehicle, the loading process shall cease until the driver is clear. If a driver consistently approaches his vehicle, or insists on remaining in the cabin, the yard foreman shall approach him/her and failing the appropriate response, report the incident/driver to the office. The office shall then contact the driver's workplace and advise them of our policy and the reason for any delay." 8. On 30 June 1997, prior to the subject accident, Brambles wrote to the Defendant asking the Defendant to ensure that all its employees complied with any directions from Brambles' supervisors regarding occupational health and safety. On the day of the incident, Brambles failed to provide any supervision of the Defendant's employee, Mr Barnes. 9. In the subject accident, Barnes suffered serious injuries including three (3) fractures of the skull, total deafness in the right ear, severe hearing loss in the left ear, loss of smell, diminished sense of taste, changes in his voice due to damage to the throat, persistent dizziness and five (5) stitches in the lower left cheek resulting in a scar. 10. After the accident in which Barnes suffered injury, Brambles introduced a policy excluding all personnel, whether employees or not, from loading areas during loading or unloading operations. 4 No evidence was called, but a number of documents were tendered. The evidence went to the defendant's long history of operation in the long haul road transport industry; the absence of any breaches of its obligations under the Act, resulting from its proactive approach to its obligations under the Act; and a corporate re-organisation which had the result that the defendant was no longer an employer in this industry. 5 The case advanced for the prosecutor by Mr O'Neil of counsel was that the factual matters relevant to assessing the objective seriousness of the offence included that the site at which the accident occurred was controlled by Brambles; the defendant did not require Mr Barnes to exclude himself from the area, while his truck was being unloaded or loaded; it failed to require the driver to be a sufficient distance away from the truck while it was being loaded or unloaded; it failed to ensure that Brambles enforced a safe system of work; or that it adequately supervised the driver while at this yard, which was quite small and crowded. 6 The detriment to safety was submitted to lie in the driver's presence in the vicinity of the truck, while it was being loaded or unloaded by a forklift; that six of the pallets being moved by the forklift fell the height from which a pallet could potentially fall. The result was a real risk of serious injury. 7 It was also submitted that the risk was readily foreseeable; simple steps which were not taken, would have avoided it, as the steps taken afterward showed. It was also relevant that there was no evidence of any immediate steps taken by the defendant to alert its other employees to the risk which had materialised. There was, however, conceded to have been close cooperation with Brambles in developing a new system for unloading trucks with forklifts, as well as other significant steps in relation to safety, which were exemplary. It was also submitted that the evidence as to the defendant's prior approach to its safety obligations showed that this had also been exemplary and indeed, at the forefront of the development of safe working practices in this industry, in relation to on road issues. The same could not be said, however, in relation to the defendant's approach to work performed at depots. The steps taken after the accident showed what should have been done by the defendant in a proactive way, beforehand. 8 It was accepted that the defendant's prior 30 year unblemished record was excellent and would be taken into account in assessing penalty. Nevertheless, it was submitted that a place remained for both specific and general deterrence to feature in the penalty imposed. While it was also accepted that account would be taken by the defendant of the steps taken after the accident, it was argued that the corporate reorganisation about which evidence had been led by the defendant could not lead to the conclusion that specific deterrence had no role to play in determination of penalty. General deterrence was also required, because the steps taken afterwards plainly showed that the defendant had moved towards compliance with its obligations under the Act, which had previously not been met. It was argued that account could not be taken of other, later steps taken in relation to safety, so as to remove the element of the penalty which would reflect general deterrence. 9 It was, however, accepted that the defendant was entitled to a 25% discount for the utilitarian value of its plea and a further discount for subjective factors. It was submitted that the defendant's financial position showed that it had net assets which plainly permitted it to meet any fine imposed. 10 The case advanced for the defendant by Mr Cahill of counsel was that the defendant was at the forefront of innovation in implementing safety improvements in this industry. Its plea accepted that it had failed to meet the absolute obligations imposed by the Act, but it would be accepted by the Court that the plea was entered in relation to the particular circumstances existing at a particular site on one day, a site which was not in the direct control of the defendant. 11 It was submitted that the defendant's prior record in this industry and the evidence of its approach to safety matters, the subject of ongoing audit since 1994, as part of the Truck Safe accreditation system, showed without doubt that it had the highest possible approach to its obligations under the Act, met at considerable and ongoing cost. The evidence as to these innovations would not be dismissed as of peripheral relevance to this charge. 12 Account would also be taken of the fact that in 1997, after an accident at the depot concerned, Brambles had required that the defendant's employees to tension straps and tautliner curtains on their trucks. All drivers were obliged to comply with the instructions of Brambles supervisors while at that depot. The applicable Brambles procedures also recognised that drivers had to move curtains on their trucks. Under the Brambles policy, forklift drivers were therefore required to stay clear of the trucks while this occurred. It was relevant that the defendant relied upon Brambles to control and supervise the forklift drivers and the defendant's employees, while they were at the depot, working in accordance with these Brambles policies. 13 It was, nevertheless, accepted that the defendant could not divest itself of its obligations under the Act, including ensuring that its drivers were not placed at risk by the Brambles forklifts, while at the depot. The Court would not, however, take the view that the defendant had paid no attention to their safety in those respects. It was entitled to rely on Brambles enforcing the safety procedures put in place at the depot. It was also relevant that both the truck driver and forklift operator here involved were both highly experienced in the work in question. The driver was himself a qualified and experienced forklift operator. 14 It was also submitted that the evidence permitted the conclusion that the accident was an aberration, not evidence of a general failure to abide by the obligations imposed by the Act. The defendant's record after over 30 years operation demonstrated this, as did the evidence of its general and ongoing approach to safety matters. 15 The evidence showed that the defendant was a family company owned by Mr Jim Pearson Snr and his wife, with Mr Pearson the only director, who had operated the business, Jim Pearson Transport, since 1974. It had previously been operated by Mr Pearson, himself. He had commenced operations in 1954. In 1999, day to day control of the business was taken over by Mr Pearson's son, Mr Jim Pearson Jnr, after Mr Pearson Snr's election to Hastings Council. 16 It was also relevant that some nine months ago the defendant ceased operating the business, which was now operated by a company of which Mr Jim Pearson Jnr, is a shareholder and director. The defendant is no longer an employer, but owns depots and trucks which it rents to the company which now trades as Jim Pearson Transport. At the time of this offence, the defendant employed 75 employees in various positions, including long distance transport drivers. 17 It was submitted that the evidence showed that the defendant and Mr Pearson Snr had a connection with safety improvement in the long distance transport industry over many years. Given the evidence of that commitment and how it was ongoing after the accident, it was argued that the principles of both specific and general deterrence had limited application in this case. 18 As to general deterrence, it was argued that the imposition of a significant penalty for general deterrence would not promote the purposes of the Act. The circumstances showed real contrition on the part of an offender, who had a real commitment to rehabilitation. A significant penalty in those circumstances was only likely to cause other offenders to reflect that there was no real benefit to be gained from such a course and "…that one might be better off saving one's money to meet the fine rather than pursuing the purposes of the Act". 19 It was submitted that the defendant should be given the full benefit of its early plea and its assistance to the prosecutor. While it was not submitted that the defendant could not meet any fine imposed, it was submitted that the Fines Act 1996 required that regard be had to the evidence of its financial circumstances, which included that its operating profits before tax in 2001 and 2002 were $15,149 and $74,976, the latter on a turnover of in excess of $11 million. This was submitted to be indicative of the tight margins applicable in the highly competitive long haul road transport industry. Consideration 20 There is no doubt that the defendant which comes before the Court in this prosecution, has a most impressive record as to its approach to the onerous obligations which are imposed by the Act. The evidence shows that it has been at the forefront of the development of practical approaches to improving safety in this industry. The evidence also showed that the successor of the business continues to adopt that approach, at considerable cost and effort, from the upper echelons of management down. The introduction of Smart Track, which enable the current operator of the business to constantly monitor the trucks which are being driven by its employees, both as to location and speed, is undoubtedly an innovation which others in this industry would do well to emulate, to the advantage of their employees and other road users. 21 While the defendant's approach to safety and its record must properly be taken into account in this case, it cannot deflect the Court from the determination of a proper penalty for the offence to which a guilty plea was entered. Given the evidence, it cannot be doubted that the plea was properly entered. The result is that an assessment of the nature and quality of the offence in question, the principal determinant of penalty, must be undertaken. 22 Having regard to the evidence, it must be concluded that the risk which materialised was a serious one, readily foreseeable and identified. A policy to deal with it was in place. It was relevant that the risk of a pallet falling in the circumstances here in question, was obvious. The safety measures in place, if adhered to, would have prevented the risk arising. The deficiency in the system arose from the vigilance required of the forklift driver in the circumstances earlier described. I accept that account must be taken of the fact that it was Brambles, which had developed this policy, in order to ensure safety at its own workplace and that it was Brambles, which was responsible for ensuring adherence to the policy. That policy, however, had an obvious flaw in the attention required on the forklift operator's part, permitting the risk here in question to arise. The defendant properly accepted that this was a failure, in respect of which it, too, had obligations under the Act. 23 Why the experienced driver and forklift operator, who were here involved in the events in question, put themselves into a position where the risk materialised, was not clear on the evidence. As the defendant's plea accepted, however, it was a risk which the defendant was obliged to preclude. 24 As I have noted, I accept that it is of relevance that the system in question was one devised and imposed by Brambles. Nevertheless, as the defendant again accepted, it was an unsafe system which the defendant had accepted, contrary to the obligations which the Act imposed. 25 In devising penalty, I am satisfied that other factors identified, such as the defendant's record and the requirements imposed by the Fines Act 1996, must be taken into account. As to record, I am satisfied that this first offence, given the defendant's years of operation in a notoriously dangerous industry was, as the prospector submitted, exemplary. That was consistent with the evidence of the defendant's approach to its obligations under the Act. This must be taken into account. 26 I am also satisfied that general deterrence must feature as an element of the penalty imposed, although the need for specific deterrence, does not have a role to play. This latter conclusion flows from both the defendant's general approach to its obligations under the Act, both before and after the accident, as well as from the fact that it is no longer an employer in the industry, given the re-organisation about which evidence has been given. The former conclusion is unavoidable, given binding Full Bench authorities such as Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 and Inspector Ian Lancaster v Burnshaw Constructions Pty Ltd (2002) NSWIRC 319. 27 Forklift operations are notoriously dangerous across industry. I do not accept the submissions advanced that were general deterrence to feature here as an element of the fine imposed, the effect would be to discourage compliance with the obligations imposed by the Act by others in this industry, rather than to encourage them. I am satisfied that the materialisation of the risk here in question, plainly requires that general deterrence must feature in the penalty imposed. 28 I make it abundantly plain, however, that the evidence as to this defendant's approach to the obligations imposed upon it by the Act, has had a role to play in the determination of the fine imposed. It follows that others would do well to understand the different roles which general and specific deterrence have to play in the determination of a fine imposed for breach of the Act. 29 The maximum penalty here imposed by the Act is $550,000. I have concluded that the circumstances were such as to warrant a penalty of $60,000. I am satisfied that as to deductions, the defendant is entitled to a 25% deduction for utilitarian savings and a further 8%, for other subjective matters. I accept the prosecutor's submission that some obvious immediate steps which could have been taken by way of response to the particular risk here in question when it materialised appear not to have been taken, as the prosector submitted. 30 This risk materialised at a particular depot, where the defendant's drivers were required to place themselves in the vicinity of moving forklifts. The defendant did not immediately take the step, later taken on the evidence, to require all of its drivers to remain out of the vicinity of a forklift's operation, when a truck was being loaded or unloaded. That delay, unexplained in the evidence, cannot properly here be ignored, so as to result in the maximum available further discount of 10%. 31 The result is that the penalty of $60,000, must be reduced by 33%, resulting in a fine of $40,200. Orders 32 For all of these reasons, I convict the defendant of the offence charged and order it to pay a penalty of $40,200, with a moiety to the prosecutor. 33 The usual order as to costs is that the defendant pay the prosecutor's costs, as agreed or assessed by the Court. The parties have liberty to approach, in the event that no agreement is reached. 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