Industrial Relations Commission of New South Wales in Court Session CITATION: T&M Industries Pty Limited v Inspector Wayne James [2005] NSWIRComm 476 Appellant: T&M Industries Pty Limited PARTIES: Respondent: WorkCover Authority of New South Wales FILE NUMBER(S): 6603 of 2005 CORAM: Backman J Criminal Appeal Act 1912 Fines Act 1996 LEGISLATION CITED: Industrial Relations Act 1996 Occupational Health and Safety Act 1983 Alexander & Ors v Cambridge Credit Corporation Limited (Receivers Appointed) & Anor (1985) 2 NSWLR 685 Inspector Wayne James v T&M Industries Pty Limited & Anor [2005] NSWIRComm 424 CASES CITED: Porteous & Others v Inspector McMartin [2005] NSWIRComm 122 HEARING DATES: 12/16/2005 EXTEMPORE JUDGMENT DATE: 12/16/2005 Appellant: Mr M Easton, of counsel LEGAL REPRESENTATIVES: Respondent: Mr R Reitano, of counsel Solicitor: WorkCover Authority of NSW Ms Fiona Miller JUDGMENT: - 9 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Backman J 16 December 2005 Matter No IRC 6603 of 2005 T&M Industries Pty Limited v Inspector Wayne James Appeal under s196 of the Industrial Relations Act 1996 JUDGMENT OF THE COURT [2005] NSWIRComm 476 Introduction 1 T&M Industries Pty Limited (the appellant) has appealed against a decision of Schmidt J in which her Honour imposed penalties totalling $135,000 for two offences under s 15(1) and s 16(1) of the Occupational Health & Safety Act 1983: Inspector Wayne James v T&M Industries Pty Limited & Anor [2005] NSWIRComm 424. 2 The appellant appears before the Court today making two applications, first seeking a stay pending the outcome of the appeal of the orders imposed at first instance, and secondly, seeking a temporary stay until sometime early in the New Year thereby enabling it the opportunity to adduce evidence on the stay application. 3 The proceedings before her Honour arose out of circumstances including an incident at the appellant's premises on 15 July 2000 when a 17-year old high school student, Rhys Stevenson, was severely injured when struck by a load which fell from a forklift. At the time of the incident it was Mr Stevenson's first day in the appellant's employ. He was performing duties in the place of another casual employee who was absent from work on the day. 4 Schmidt J found the offences were serious involving dangerous work and employees who were young, untrained and unsupervised in forklift operations. Another contributing factor to this finding was that the key was left in the forklift. At [35] of the sentencing remarks, her Honour said: The evidence also well demonstrated the simple steps available which would have precluded the accident, which including ensuring that keys were not left in the forklift ignition and that forklift operations were undertaken by the appropriate trained and supervised member of staff. Such steps were implemented without difficulty after the accident. It follows that all of these matters must lead to a substantial penalty. The offence involved young, untrained boys operating dangerous forklift equipment to carry heavy loads while entirely unsupervised. The risk to which they were exposed included the risk of death. Very serious injury was, in fact, sustained by Mr Stevenson. All of those matters must lead to a substantial penalty. 5 Her Honour also took into account when imposing the penalties, various subjective matters including pleas of guilty entered by the defendant apparently at a relatively late stage in the proceedings. 6 In relation to the appellant's capacity to pay a fine, her Honour made the following observations (at [37]): Attention must also be paid to the defendant's means pursuant to s6 of the Fines Act 1996. There was evidence that, while solvent, the defendant had a limited ability to meet a fine as at the date of the hearing, but this depended on cash flow and profit, of both the defendant and a related company, T&M Engineering Group Pty Limited. The other defendant, T&M (Aust) Pty Limited was thought by Mr Woodgate to be insolvent. Its position cannot, of course, impact on the penalty to be imposed on this defendant. I have taken this evidence into account in order to reduce the penalty which otherwise, would have resulted. As the authorities make clear, a defendant's financial position, while to be taken into account, cannot result in a penalty inappropriate for the offence in question. I am satisfied that the final penalty I have determined appropriately balances these various considerations. 7 The sentencing remarks also record (at [38]) that her Honour took into account the principle of totality. Grounds of appeal 8 The grounds of appeal are: (i) The penalty or sentence imposed was manifestly unjust and inordinately harsh. (ii) There was a miscarriage of justice in that the penalty was excessive. (iii) There is a need for consistency in judicial adjudication which the Full Bench as a supervisory tribunal has an obligation to ensure. (iv) Her Honour failed to give any or adequate consideration to the relevant factors on sentencing and in particular the subjective factors of the appellant as would mitigate against an injudicious or excessive penalty or fine as contained in the evidence presented to the Commission, including and in particular the financial means of the defendant. (v) The sentence or penalty imposed was unreasonable in the circumstances of the case. (vi) Such other grounds as appear appropriate to the Commission in Court Session upon hearing the appeal. Reasons for seeking a stay 9 A stay of the orders is sought on the following bases: (i) Her Honour found that the appellant was a company that whilst solvent had a limited ability to meet a fine as at the date of hearing and that its ability to meet any fine imposed depended on its cashflow and profit and that of other corporations within the Group. (ii) The total of the penalties and fines imposed in the amount of $135,000 will place if required to be paid prior to the determination of the appeal an undue burden upon the appellant's operations and may jeopardise the continuing operation of the business. (iii) Given the objective features of the offence as found and prior to any consideration of the subjective features relevant to the appellant the penalties as imposed by her Honour are clearly excessive when viewed against comparable cases and the appeal as brought has substantial merit. (iv) No prejudice would attach to the prosecutor/the respondent should the Full Bench pending a hearing of the appeal grant a stay. (v) For and upon such other grounds and reasons as appear appropriate to the Full Commission in respect of the application for stay. 10 The general principles applicable to stays have been recently referred to by Walton J, Vice-President, in Porteous & Others v Inspector McMartin [2005] NSWIRComm 122 (at [8]). After referring to a number of decisions in this jurisdiction which have dealt with stay applications his Honour said: It is not necessary to demonstrate special or exceptional circumstances to warrant the imposition of a stay. Rather, the applicant must demonstrate an adequate reason for the stay (simply filing an appeal or seeking a stay is not sufficient) and that the balance of convenience (including fairness and the competing rights of the parties) favours the stay. In some cases it may be appropriate to consider, on a preliminary basis, the prospects for success on appeal. 11 The principles have been set out in the Court of Appeal decision of Alexander & Ors v Cambridge Credit Corporation Limited (Receivers Appointed) & Anor (1985) 2 NSWLR 685 at 694 and 695. These principles may be summarised as follows: (i) it is not necessary for an applicant bringing a stay application to make out special or exceptional circumstances. It is sufficient if the applicant demonstrates a reason for an appropriate case to warrant the exercise of discretion in his favour. (ii) the onus is on the applicant seeking a stay to demonstrate a proper basis for a stay that will be fair for all parties. (iii) the mere filing of an appeal would not of itself discharge the onus which the applicant bears. (iv) in exercising its discretion whether or not to grant a stay the Court will weigh considerations such as the balance of convenience and competing rights of the parties before it. (v) where there is a risk if a stay is granted that the applicant's assets may be disposed of, the Court may in the exercise of its discretion refuse to grant a stay. (vi) a Court may impose on an applicant as a condition of a stay where funds are available the payment of the whole or part (of a verdict) to the judgment creditor. (vii) where there is a risk that the appeal will prove abortive (or be rendered nugatory) if the appellant succeeds and the stay was not granted, this will be a substantial factor in favour of a grant of the stay. (viii) without indulging in speculation to the appellant's prospects of success the Court may nevertheless make some preliminary assessment about whether the appellant has an arguable case. Consideration 12 In the present circumstances a significant feature of the application involves the appellant's asserted difficulties to pay the penalties imposed in the amount of $135,000. The appellant argues that if the penalties are required to be paid before the determination of the appeal this will place an undue burden on its continuing operation and will impact adversely on the continuing employment of all or some of its employees. 13 The appellant also relies on the fact that no prejudice would attach to the respondent (the WorkCover Authority) should a stay or a temporary stay be granted pending the outcome of the appeal. 14 The respondent, in opposing the applications, submits that in an earlier matter involving the appellant, considerable delay of some three to four years was occasioned following the grant of a stay. On the basis that a similar delay may be occasioned in the present proceedings, the respondent contends that it will be prejudiced. 15 A further aspect of the appellant's application which appears to relate to the merits of the appeal involves the assertion that the penalties imposed are "clearly excessive when viewed against comparable cases ..." 16 As a preliminary observation, it should be noted that in applications for a stay of proceedings, the onus is on the applicant to satisfy the Court that the stay application should be granted. Financial hardship 17 The appellant relies on financial hardship as a significant feature of its application. This is a relevant consideration in relation to the exercise of the Court's discretion in deciding whether or not to grant the stay application. In Porteous & Others v Inspector McMartin [2005] NSWIRComm 122, Walton J, Vice-President, confirmed this approach (at [17]) when his Honour observed that, "evidence of significant financial hardship may establish an adequate reason for granting a stay". 18 The appellant has adduced no evidence here today which might provide some basis for its submission that it will suffer financial hardship if the stay is not granted. According to the appellant, it has some $800,000 in net assets which it says is necessary for its continuing operation, but that a substantial portion of that amount would be deducted to meet the penalties imposed and associated costs. A figure of some $200,000 was proffered as the likely amount. The respondent disputed this amount submitting that the more realistic figure taking into account the penalties imposed ($135,000) and costs would be in the vicinity of $175,000. 19 In submissions the appellant advised the Court that if its application was declined it would make an application under the Fines Act 1996 for the fine to be paid by way of periodic payments. The respondent in its submissions relied on this as an available option, which would, it said, alleviate, if not eliminate much of the hardship about which the appellant makes complaint. Merits of the appeal 20 As regards the merits of the appeal, on a preliminary reading of the sentencing remarks, the offences were very serious, as was found by her Honour. I cannot discern from her Honour's reasons and findings any error which might determine the appeal in the appellant's favour. In addition, the penalties imposed do not appear to be so excessive as to be outside an acceptable range. Her Honour expressly took into account when imposing the penalties, the appellant's limited capacity to pay a fine. Nevertheless, her Honour, following authority, imposed penalties which in my view were not inappropriate given the nature of the offences, and other relevant matters. 21 Taking into account all these matters I have some difficulty in finding any merit in the appeal in terms of the appellant having an arguable case although, I emphasise that at this stage I am unable to express a final view as to the substantial merits of the appeal. Respondent's attitude to the applications 22 The respondent opposed both applications, submitting that the penalties were not excessive given the seriousness of the offences. The respondent also submitted that it would suffer prejudice for the reasons earlier given, namely that because of the delay in the hearing of this matter, there was a concern that ultimately it may not recover any funds. In developing this submission, the respondent informed the Court that a related corporation to the appellant, also the subject of a prosecution, appears to have been placed in either administration or liquidation, and, as a matter of record, the appellant is the subject of a further prosecution in this jurisdiction. That latter mentioned matter was also the subject of a stay pending an appeal which at present has not been finally determined. 23 The respondent also pointed out that the appellant had the capacity at any time to make an application under the Fines Act for periodic payments in lieu of the lump sum penalties imposed which would thereby alleviate any financial burden which might otherwise arise. Other matters 24 During the course of submissions a suggestion was made that if the Court were minded to grant a temporary stay until sometime in the New Year, then a condition of that stay could be a part-payment of the penalties imposed by the appellant. I allowed the appellant, represented by Mr Easton of counsel a short adjournment during which some instructions could be obtained about this. Upon resumption of the proceedings the Court was told that the appellant was prepared to make periodic payments of $3000 per month which it could commence to pay at the beginning of February 2006. 25 The respondent characterised this offer as "... out of the realms of reasonableness". 26 The appellant's offer of $3000 per month with the first payment not to commence until February 2006 I do not find particularly persuasive in its favour. 27 I have formed the view at this preliminary stage that the appellant does not appear to have an arguable case. I have in addition considered a number of factors which I have weighed in the exercise of my discretion in both applications. These factors include, in addition to whether the appellant has an arguable case, whether the appellant will suffer any hardship should the applications not be granted, whether the respondent will suffer any prejudice, and, the alternative measure available to the appellant to apply under the Fines Act for the making of periodic payments. 28 In all the circumstances I decline to grant the applications for the stay pending the outcome of the appeal and for a temporary stay. I therefore dismiss both applications. Orders 29 I make the following orders: 1. Both applications are dismissed. 2. Costs are reserved. ____________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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